BoG recommends local banks reduce interest rates, defer loan payments

COVID-19

Bank of Guyana (BoG) Governor, Dr Gobind Ganga has recommended that the Guyana Association of Bankers Inc, through its membership, reduce interest rates on loans and credit cards to customers to help deal with COVID-19 and the likely economic and financial fallout that may result.

In a letter to Guyana Association of Bankers Inc Chairman Richard Isava, the Governor said that the BoG strongly encouraged banks/financial institutions to offer relief to affected individual and commercial customers. Dr Ganga added that among these measures should be deferred loan payments to assist customers in good standing; deferred loan payments by companies to assist with their liquidity requirements; waived or reduced fees/penalties for transactions with Automated Teller Machines (ATMs); Point of Sales (POS); Electronic Funds Transfer (EFT); debit cards; loan processing; late payments on loans; etc, and encouraging customers to reduce in-person transactions by using e-banking, ATMs, POS, telephone, etc.

As relief to the banking institutions, Dr Ganga added in the letter that in view of COVID-19, the BoG as the supervisory authority would allow banks to renegotiate credit facilities; grant a three-month moratorium to classify affected accounts as non-performing; ensure the foreign market continues to function to satisfy legitimate needs as well as ensure compliance with Circular No 5 of 2017 on Bank Cambio Operation, and continue with an accommodative monetary stance to promote sustained growth and development of the economy.
He added that the BoG noted that the financial system was safe and sound, and reiterated the critical role banks played in the economy. “The BoG will continue to monitor COVID-19 and the evolving economic conditions and may consider other measures, if necessary,” the letter noted.

Republic Bank
Meanwhile, Republic Bank on Monday announced a reduction in overdraft interest rate; moratorium on personal and mortgage loans for up to six months (will be available upon request); debt restructuring will be considered on a case-by-case basis; temporary increase of overdraft and credit card limits on a case-by-case basis and automatic waivers for the next six months on credit card late fees and over limit fees effective March 23, 2020; late fees on loan payments; penalties for early withdrawal of Certificates of Deposit and disposable commercial depository wallet fee.
Last week, Scotiabank (Guyana) announced that customers could have their loan payments deferred up to six months (first for a period of three months, with the possibility of extension for a further three months). This suspension covers loan repayments in regard to mortgages, auto loans, personal loans, credit cards, and lines of credit. The bank, in a release, has said that for its retail customers, payments for secured and unsecured loans may be deferred for up to six months. Debt consolidation and Fixed Payment Plans would be available for customers requiring long-term financial assistance.
Guyana Bank for Trade and Industry (GBTI) has also indicated that from today, Tuesday, March 24, the withdrawal limit at its ATMs has been increased to $150,000.
Hundreds of thousands of persons around the world, including Guyanese, have been affected by the outbreak of COVID-19. In Guyana, five cases have been recorded. One person has since died.