Apr 22, 2018 News
By Kiana Wilburg
Chartered Accountant and Attorney-at-Law, Christopher Ram, insists that as part of its stewardship, the Bank of Guyana should publish its findings and concerns about the banks it regulates. In fact, the lawyer stated that citizens have a right to know this information.
He made this and other comments in wake of an article that was carried by Kaieteur News recently. That news item highlighted the fact that Central Bank has never produced a report about the suspicious behaviour of banks operating here.
Many readers are unaware of the strategy and regulatory failures, governance and control issues, and instances of financial misconduct and political interference in the banking sector.
Ram believes that a change in this regard is certainly needed and would definitely aid in improving Guyana’s international reputation.
The Chartered Accountant said, “Anything that helps Guyana to strengthen regulation will ultimately enhance its international credit rating, lower borrowing costs and increase our reputation as a responsible player in the regional financial architecture. The report on the behaviour and culture of banks here would indeed work to our benefit. It would be welcomed.”
Ram asserted, “Also, all citizens have a right to know these things. I am not sure about Central Bank’s legal obligation to produce such a report however; I do believe that Central Bank should be reporting, as part of its stewardship, its findings and concerns about the entities it regulates.”
He added, “But this is also required of the Financial Intelligence Unit (FIU). What is that institution doing about these things as well? We need to know and they also have to be held accountable.”
CENTRAL BANK’S PERSPECTIVE
Kaieteur News was able to confirm with Central Bank Governor, Dr. Gobind Ganga who is currently in Washington D.C, that the institution has never produced a report on the conduct of banks here.
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.
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 behavioral reviews of their local banks for more than five years, all in an effort to identify those with a high behavioral risk profile. (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 behavioral audits of local banks in the face of scandals on errant lending practices. (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 behavioral trends of its members. It has produced several reports in this regard. (https://www.centralbank.go.ke/reports/bank-supervision-and-banking-sector-reports/)
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