Home News National Payment System Bill passed after contentious debate
– Opposition worries about excessive BoG powers, weak ICT sector
Much contention attended the National Payment System Bill when it was introduced to the National Assembly for a second reading, and eventually passed on Friday. Before that could happen, several Opposition Members of Parliament expressed worry over several sections.
At first, Opposition Parliamentarian Juan Edghill noted the potential of the bill, which was initiated by the former Government. In fact, he questioned why Business Minister Dominic Gaskin did not speak on provisions in the bill; provisions that would allow non-traditional sectors to do business on a wider scale.
“When I read the bill, I thought about how good this is for us in terms of bringing about the necessary convenience in doing business, paying bills, settling issues… this bill provides a great opportunity for Guyana. The community that makes its hammocks in the Rupununi can now advertise on the web, can sell and receive payments in this modern architecture. The person in the Pomeroon selling coconut water can sell their product. This bill provides access to markets way beyond…Guyana,” Edghill said.
“While I’m speaking about the good of the bill, there is still some worry,” he continued. “And I hope that the Minister of Finance will address the fact that a sugar worker getting a pension will no longer get that pension paid (in) cash, but will be forced to open a bank account. And what is even more troubling (is that) they are told which bank to go to,” Edghill declared.
Pointing to Section 4 (2) of the bill, where the Bank of Guyana is cited as both a regulator and a participant, Edghill, former Minister within the Ministry of Finance, also pointed out Clause Six of the bill, and suggested that the National Regulator should have consumer representatives to ensure the interests of consumers are safeguarded.
“So the Bank of Guyana is the regulator, which is excellent and needed to manage the system. But the bank then moves from being a regulator to an operator. We need a regulator; there will be excessive tariffs, there will be inadequate services and quality assurance… But why would the bank want to be an operator? The Bank of Guyana will be regulating itself; and that, as it relates to competition, creates some concern,” Edghill forewarned.
He also expressed concern over Clause 18 (2) of the bill, which allows the regulator to enter the premises of someone suspected of operating without a licence and carry out searches, as he urged the inclusion of stipulations that such searches can only be carried out after a warrant has been obtained.
During his presentation, Finance Minister Winston Jordan was adamant that thorough consultations had been carried out with relevant stakeholders. He explained that a World Bank team had “met with various departments of the Bank of Guyana, two commercial banks, the Guyana Securities Council, the Guyana Post Office, Global Money Guyana, the Accountant General’s Office and the National Insurance Scheme.”
In stressing the need for the bill, Jordan noted that there have been dire consequences attending the continued use of cash payments and physical interactions…including heightened criminal activities. Then he cited the changes the bill would bring to the financial landscape.
Jordan had also cited examples of other jurisdictions, for instance in Jamaica, where he noted that the Bank of Jamaica has oversight of the payment system there. This includes ensuring financial institutions adhere to the rules and regulations.
Jordan noted that a National Payment System Act was also implemented in Belize with technical assistance from the World Bank.
But Edghill, in his presentation, had something to say about this. Edghill noted the importance of being cognizant of the local context.
Meanwhile, Opposition Member of Parliament Nigel Dharamlall had harsh words for the environment in which the bill is being introduced — such as the crime situation.
Dharamlall raised a number of considerations, including how Government would ensure the participation of hinterland residents in the national payment system. Those persons, he noted, will be hampered by both location and ineffective ICT facilities.
Minister within the Ministry of Finance, Jaipaul Sharma, defended the bill in his presentation. For instance, Sharma noted, the Central Bank cannot revoke licences in a “willy-nilly” manner, but persons with grievances would instead be given time to defend their licences.
Upon his return to close the debate, Jordan made it clear he is not afraid that sugar workers would not be able to use a bank account, or even open one. According to Jordan, there is always a resistance to change when modernity and reform is at stake. He recalled that there was once resistance to implementing ATM machines, but this is now widespread.
Besides urging that the general public be educated about the new system, none of the Opposition entreaties found sympathetic ears on the Government side. The bill was eventually passed without any amendment.
A National Payment System (NPS) is an infrastructure that provides the economy with information communication technology (ICT) options for processing payments resulting from the many different types of economic transactions that take place daily. In other word, this includes e-payments, credit cards, and wire transfers.
The Bank of Guyana (BoG) was tasked with leading the development and implementation of a strategic approach to advance the development of Guyana’s NPS, by establishing the parameters to guide policy and set priorities.