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Withdrawal of millions from Commercial Banks…Gov’t. removing deposits of semi-autonomous agencies not Public Corporations – Finance Minister
– Commercial banks have $56B parked and doing nothing
By: Kiana Wilburg
Finance Minister, Winston Jordan disclosed on Friday that government will only be removing the deposits made by semi-autonomous agencies at the Commercial Banks and not agencies established under the Public Corporations Act.
He said that government will be removing the deposits in a phased manner.
Jordan noted however that even if government were to remove this money from the commercial banks all at once, the banks can easily replace that as “they have $56B parked at the Bank of Guyana doing nothing.”
He made this comment during a press conference which was held at the Ministry of Finance. There, the Minister sought to address the concerns among members of the Banking Association and the Private Sector Commission (PSC), given government’s decision to no longer allow its monies to be held in commercial banks.
These concerns were indicated to the media on Wednesday via a statement by the Commission.
Jordan said that during a meeting with the Banking Association, he explained that government would be moving to have the funds held by agencies such as the Guyana Geology and Mines Commission (GGMC) and the Guyana Forestry Commission (GFC) placed into the Consolidated Fund. These semi-autonomous agencies, among others, have been collecting monies on behalf of the state and have held them in accounts in some commercial banks.
Finance Minister, Winston Jordan
The Finance Minister emphasized that he made it clear to the association that these monies would not be moved until the forensic audits into these agencies have concluded.
Jordan had said that this sentiment was also communicated to the Chairman of the Guyana Manufacturing and Services Association (GMSA) Norman McLean. He said, however, that McLean expressed some reservations about the decision, and opined that should the administration go forward with such a decision, then it would lead to some problems for the commercial banks.
“I told him that it is government’s money and it makes no sense having it in the commercial banks when it really belongs in the Consolidated Fund. The Fund is in overdraft and putting the monies where they belong will help to reduce some of these deficits,” Jordan said.
The Finance Minister emphasized that government is not thinking of withdrawing public sector deposits.
He explained, “In fact, we are not withdrawing deposits from any commercial entity established under the Public Corporations Act so it has nothing to do with GuySuCo or the Guyana Rice Development Board. These are all corporations under the said Act .We are targeting semi autonomous agencies.”
Jordan said that in the past, some agencies such as GGMC were placed under Ministers but were later separated and collected enough monies to conduct their businesses. He reminded that such agencies also collected monies on behalf of the state and as a result, government has millions of dollars lying outside the Consolidated Fund.
The Finance Minister said that to date, GGMC has accumulated deposits amounting to $22B from overseeing the mining sector. He said that while these monies are lying outside, government is running a deficit. He said that for 2013, government has a deficit of $27B, for 2014 it increased to $36B and for 2015 it is about the same figure.
He added, “If the money is put into the Consolidated Fund, instead of running a deficit of $30B annually, it will just run $2B because it would be significantly reduced…”
The Finance Minister stressed that government will not back off from removing the monies from the commercial banks.
Jordan said, “If you want to bring back transparency and accountability to this country then we must start cleaning up, we must start following the law.”
He explained that there would be a review of the accounts of various agencies to ascertain whether it would be in their interest to hold some of the funds or if all should be transferred to the Consolidated Fund.
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