Latest update April 7th, 2025 6:08 AM
GBTI concerned about negative impact of new financial systems
– says compliance has become more costly
By Kiana Wilburg
Local banks are welcoming of some of the steps taken by the authorities of the day to strengthen Guyana’s banking system. They are, however, concerned about the negative impact and perceptions some of these new systems
GBTI Chairman, Robin Stoby, S.C.
can have on small and large customers alike.
Specifically speaking to this point was Guyana Bank for Trade and Industry (GBTI) Chairman, Robin Stoby, S.C.
In his recent report, Stoby noted that Government passed amendments to several pieces of legislation during 2016. These included changes to the Credit Reporting Act and the Anti-Money Laundering and Countering the Financing of Terrorism Act (AML/CFT). The Chairman opined that these will have a serious impact on the operations of commercial banks.
In this regard, Stoby said that amendments to the AML/CFT Act prescribe fines between $5M and $15M, including imprisonment for breaches of the Act by bank employees.
It also prescribes ongoing training for employees to better detect suspicious transactions and the adoption by banks of methods for dealing with specific issues regarding originators of wire transfers.
Amendments to the Credit Report Act prescribe that, as part of credit risk evaluation, a Credit Report must be obtained from the Credit Bureau before granting facilities to customers.
Stoby also pointed out that among the amendments to the Income Tax Act is the controversial provision granting authorization for the Guyana Revenue Authority (GRA) to demand that financial institutions remit funds from the bank accounts held by taxpayers who have outstanding tax arrears to the GRA, as these arrears are designated as debts to the State.
The GBTI Chairman stated that banks, over the years, have been faced with amendments to the financial and business legislation and new regulations that have been pushing up operational and compliance costs at record levels; costs that in the main have not been previously passed on to customers.
“Compliance has not only become more costly, but requires an increasing number of changes to our banking software to facilitate reporting to a larger number of regulatory bodies,” Stoby said.
The GBTI Chairman continued, “Banks are now called upon to undertake such varied tasks as monitoring the activities of customers, systematically collecting and sharing information regarding certain customer transactions with law enforcement authorities and ensuring that our products and services meet a range of new standards.”
He added, “We are concerned that the negative impact and perceptions of these new systems on small and large customers alike fall primarily at the feet of bankers and not at the doorstep of the regulatory agencies from where they emanate, and we believe that this is an area that the banks in Guyana need to engage the Government in meaningful discussions, so as to seek to maintain a proper balance in the financial system of Guyana.”
That aside, Stoby said that GBTI welcomes the pronouncements by Government in terms of favouring a form of agency banking. Agency banking is a model where accessible “agents” (individuals) process customer transactions on behalf of banking institutions.
GBTI says that it stands ready to offer its views as part of the consultations, since it believes that this service aids in improving participation in the mainstream financial industry by retail businesses and individuals.
According to Stoby, the Bank also applauds the steps taken by the Bank of Guyana for the modernization of the National Payment System through the use of electronic payments. He said that the bank has actually joined with the other banks in adopting new cheque standards and implementing cheque scanners in its operations, which has halved the clearing time previously required to confirm cheques between banks.
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