Apr 20, 2018 News
By Kiana Wilburg
Not a single year goes by without numerous reports being made public on the lawlessness, trends and culture of corruption that is entrenched within various government institutions in Guyana.
But how much is actually known about the behaviour of banks operating here?
Do you know, for example, which banks have been more prone to financial misconduct in the last five years and what Central Bank has done in this regard?
Many readers would be left wondering about this “unknown,” since Bank of Guyana has never produced a report that speaks to the strategy and regulatory failures, governance and control issues, and instances of financial misconduct and political interference in the banking sector.
This was confirmed yesterday during an interview with Central Bank governor, Dr. Gobind Ganga, who is currently in Washington D.C.
Kaieteur News informed the Central Bank head that there are several countries in which the Central Bank has made efforts to carry out assessments on the behaviour and culture of banks and produced the findings in a detailed report. He was asked to say if Bank of Guyana has ever done something similar.
Dr. Ganga said, “No. We would have done a report on the financial sector…and so that was done by the International Monetary Fund (IMF) and the World Bank in 2015/2016. We are implementing the recommendations as you would have seen. There were recommendations with the National Payment System, deposit insurance, consumer protection etc. We are working on all of that.”
Dr. Ganga also acknowledged that while Guyana has not undertaken to produce a report on the behaviour of banks here, there are several Central Banks around the world which have done assessments and produced reports.
He said, “With us, we are trying to put legislative systems in place to make our financial system more efficient and more effective.”
Pressed to say if Bank of Guyana is even desirous of conducting an assessment of the behaviour of banks in Guyana, Dr. Ganga said “Well, let me say this, we would have done various pieces of that with respect to why they are charging different fees. We did surveys on correspondent banking and the effects of different technologies. We would have done it, I suppose, in a segmented way.”
Even though Ganga said this would have been done in a “segmented” way, there is not a single report on the findings Central Bank made on the matters, he outlined.
Central Banks in several countries around the world have moved in the direction of conducting audits on the behaviour of banks.
According to the Bank of England, for example, there is a need to conduct such audits to guard against inappropriate behaviour in the banking sector. In fact, the Bank of England has been undertaking in-depth behavioural reviews of their local banks for more than five years, all in an effort to identify those with a high behavioral risk profile. Link can be accessed online: (https://www.libf.ac.uk/news-and-insights/news/detail/2016/04/06/behavioural-risk-and-banking-the-dutch-central-bank-approach)
The Central Banks of nations like Ireland were also quick to undertake behavioural audits of local banks in the face of scandals on errant lending practices. Related link: (https://www.irishtimes.com/business/financial-services/central-bank-to-assess-culture-and-behaviour-in-banks-from-april-1.3383228)
The African nation of Kenya is very stern when it comes to the management of its banking sector while managing the behavioural trends of its members. It has produced several reports in this regard. See: (https://www.centralbank.go.ke/reports/bank-supervision-and-banking-sector-reports/)
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