Local banks plug more money laundering loopholes

May 29, 2017 News

Local commercial banks are determined to play their role in improving the financial integrity and image of the nation. As such, Kaieteur News understands that banks have already taken steps to tighten up on their anti-money laundering frameworks as well as their compliance with the local laws and regulations.
In the case of the Guyana Bank for Trade and Industry (GBTI) for example, moves were made to continue to strengthen its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) programme during 2016.
According to GBTI’s CEO, John Tracey, the move to strengthen the bank’s framework is to ensure compliance with international and local laws and regulations.
Some of the achievements in this regard for GBTI include; training for board and senior management and staff of the bank; continued updates to AML/CFT policies and procedures and the implementation of a screening platform for all international payment transactions.
Furthermore, GBTI like other local banks continued its participation in community business workshops where attendees were updated on the Bank’s AML/CFT regime and given the opportunity to ask questions.
Additionally, local banks had expressed their appreciation of some of the steps taken by the authorities of the day to strengthen Guyana’s banking system. They however noted concern about the negative impact and perceptions some of these new systems can have on small and large customers alike.
Specifically speaking to this point was 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 said 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 to $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.

GBTI CEO, John Tracey

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 to record levels; costs that in the main have not been previously passed on to customers.
Stoby said, “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.
“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.

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