Republic Bank should help advance plastic money

Dec 01, 2019 Features / Columnists, My Column

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When the Central Bank intervened to prevent Scotiabank from selling its shares in Guyana to Republic Bank, some people were of the view that there was too much intervention into private business. There are people who believe that private business should remain private.
There is the view that the public has no need to be involved in whatever the private business does. I do not agree, because in the final analysis the public would be affected, sometimes in ways that are unimaginable.
The Central Bank concluded that with the acquisition of Scotiabank, Republic Bank would have controlled more than fifty percent of the banking market. That in itself means nothing to the ordinary man, until he realizes that Republic Bank would then be able to control interest rates.
It would have meant that people seeking to borrow would have been asked to pay interest rates higher than normal. And the other banking institutions would have followed.
Then there would have been the foreign exchange rates. Again Republic Bank would have dictated this, to the extent that goods would cost more. In fact, everything would have become expensive, at a time when workers are complaining that their pay simply cannot suffice.
It cannot escape notice that Republic Bank is the largest banking institution in Guyana. When it acquired the Guyana National Co-operative Bank it got a sizeable share of the banking market. A look at the balance sheet would show how powerful this bank is. And it does not take criticisms lightly.
Of course, the bank has had its internal problems that impacted some customers. People had money withdrawn from their account without their knowledge. Some found that people did shopping overseas with their account.
To its credit, where such cases arise, the bank makes restitution, although a few months ago some people were left on a limb for a while.
Today Republic Bank is in the news again. Given its size, its woes could not escape notice. And coming at this time, the problem has exacerbated. Many entities pay salaries through Republic Bank, so each month, hundreds of workers go there for their pay.
These past few weeks, collecting their pay has been a nightmare. The bank was revamping its system, but along the way it has encountered problems. To make matters worse, these problems are occurring at this time of the year when Guyanese go all out to enjoy the Christmas holidays.
There are long lines at the bank. It would seem that if someone wants to access pay, that person must take a day off from work, because the lines are long. People talk of seeing long lines stretching outside the bank for at least a block.
I am not aware of the extent of the revamp, but I wonder whether it could have been done in stages, perhaps with people working outside normal banking hours. This is the first time I know of a bank actually affecting its customers in such a manner.
It would seem that Guyana is destined to have these problems. The development of the oil sector couldn’t happen at a worse time. I am certain Republic Bank is playing an integral role in moving money. It is perhaps the only bank that can effect money transfers to foreign banks.
This situation reawakens the issue of getting rid of the scope of using paper money. People with credit cards and debit cards are finding out that they are in a better position to access their money. They can pay accounts.
Unfortunately, not too many business places have points of sale. Chequing is a problem, because a person must be known and respected for his cheques to be accepted by some businesses.
I happen to visit some major businesses in the United States, and a look at their cash registers reveals a paucity of cash. When criminals attack those establishments they manage to cart of a relatively small amount of cash.
Plastic money would reduce the extent of robberies on the streets. Of course, there have been reports of people being abducted and made to withdraw money from their accounts. Republic Bank has a limit of $90,000 per day for transactions.
The good thing is that there are cameras at the automated teller machines, so the identity of people attempting robberies will be revealed. In Guyana there has not been such robberies. At least I am not aware of any.
One stumbling block seems to be the inability or the refusal of the commercial banks to make using credit cards or debit cards use standard, across the board.
Recently, some Republic Bank customers found that they could use the ATMs set up by the Guyana Bank for Trade and Industry. The problem is that the charges are so different. This needs to be standardized so that no individual is penalized for banking with one bank or the other.
Some businesses try to avoid this form of business because they would all be exposed to the Guyana Revenue Authority. They simply want to avoid taxes although they expect a lot from the state. But this will allow the authorities to trace the movement of money in the system. Money laundering would be managed.
Many people are finding it convenient to use the mobile money system to pay certain bills. The lines are being avoided. Of course there is a charge.
I would hope that as soon as Republic Bank solves its problems, it may wish to take the leadership role in harmonizing the money market, especially at the level of points of sale.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper)

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