New fiscal laws
– urges caution, consideration for commercial banks
The series of financial bills that were brought to the floor of the National Assembly by the Government has raised concerns in the parliamentary Opposition camp, as worry mounts that increased requirements can drive up the costs of doing business.
The PPP is expressing worry over the power accruing to the central bank through legislation
At a press conference on Monday, Opposition Leader Bharrat Jagdeo expressed worry that these new laws were laying the groundwork for some banks to fold. Here he cited the bad debt portfolios of certain banks.
“When you look at the fineprint of those laws, it gives the central bank greater powers that could harm some of the interests of the commercial banks. Even the deposit insurance scheme the Government wants to put in place, it is now going to assess the banks on a biennial basis, a sum based on the reserve holding that they will have to pay into that fund.
“So, now the commercial banks will have a new cost, which could push up interest rates for some people like us, because they have to pay for an insurance scheme. So deposits that are remunerated, they’ll have to push up interest rates. We have to be cautious,” Jagdeo urged.
At the last sitting of the National Assembly, Government had brought several bills, including a National Payments System Bill, to the floor. The Bill contains provisions for persons to use “electronic money” through SIM cards and software accepted as a means of payment. There are also provisions for presenting cheques in electronic form.
And then there are the penalties, which range from a fine of $500,000 and two years’ imprisonment when convicted as an individual to a fine of $2 million as a body corporate. Part 12, Section 51 speaks to various offences and penalties designed to keep the payment system running smoothly.
The penalties apply to Sections Seven and Eight (attaining a licence before providing payment system or service). The Act states that banks, as direct participants in the system, do not have to acquire a licence. The same applies for money transfer service providers. However, Section Three (a) adds that they must comply with all other requirements of the Act.
The penalties also apply to Section 13, which prohibits transferring licences, as well as Section 23. Section 23 mandates compliance with the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) laws.
In Section 32, operators are also prohibited from outsourcing their services without the bank. In Section 33, they also have to seek approval in order to use agents. And then there are those who refuse to comply with any order issued by the Bank of Guyana as an administrative measure.
According to Section 50 (4), “a person who fails to comply with an order issued, pay a fine imposed or otherwise comply with administrative measures taken by the Bank in accordance with this section commits an offence and is liable on summary conviction as specified in Section 51.”
