Latest update March 29th, 2024 12:59 AM
Jul 28, 2018 News
Efforts to modernize and strengthen Guyana’s financial sector have been boosted by US$35M Development Policy Credit from the World Bank.
The signing ceremony for this loan took place yesterday morning between Finance Minister, Winston Jordan, and the World Bank’s Senior Country Director, Pierre Nadji.
The World Bank official in his brief remarks, said that the loan was prepared for the government in record to time to support the budget of the government, help stabilize the financial sector and prepare the grounds for sound fiscal management.
He said that the loan is one of two, which the World Bank hopes to hand over to the government soon. Nadji also reminded that the government passed amendments to several financial bills. He opined that these were done in the right time for the agreement. The World Bank official said, “I hope to do more to help the Guyanese people reduce the challenges of poverty.”
Minister Jordan was also in high praise of the loan, which will support the country’s financial sector. He noted that the World Bank has made available to the government, over US$90M, which will be accessed over the next two to three years. He said that the US$35M loan is part of that resource envelope.
Jordan also made it clear that this money will go towards supporting Guyana’s balance of payment. He said, too, that the moneys from the World Bank will complement the passage of four bills which were passed in the National Assembly so that the financial architecture of the country can be modernized.
The Bills, which were passed include The National Payment System Bill, Bank of Guyana (Amendment) Bill, Deposit Insurance Bill, and the Financial Institutions (Amendment) Bill.
NATIONAL PAYMENT SYSTEM BILL
This Bill seeks to introduce legislation for the establishment, regulation and oversight of a National Payments System for Guyana and for matters connected therewith.
It provides for the establishment of the National Payments System Council and it sets out the general powers and duties of the National Payments System Council. It also lays out the operational role of the Bank in relation to the National Payments System Council.
The Bill also paves the way for the licensing of payment service providers and systems operators.
With this document, the Bank of Guyana is given the power to impose individual conditions for the operation of systems and the provision of services, ask for information, and agree with the individual operator or payments service provider on limitations in the activity or specific protective measures or impose sanctions and withdraw the relevant licence.
BANK OF GUYANA (AMENDMENT) BILL
This Bill seeks to amend the Bank of Guyana Act by explicitly giving it the power to provide temporary liquidity assistance to deposit taking financial institutions. The document outlines that this is an integral measure, which is employed in maintaining the stability of the system.
DEPOSIT INSURANCE BILL 2018
This Bill seeks to establish a Deposit Insurance Scheme and to lay out a regime governing its core elements – the Deposit Insurance Corporation and the Deposit Insurance Fund.
Given that deposit insurance is one of the components of the financial sector safety net, alongside supervision, resolution, and emergency liquidity assistance, this Bill seeks to address the inherent instability of maturity transformation in the banking sector.
This is in relation to the financing of long-term assets through the issuance of demand or short-dated deposits, which makes banks vulnerable to depositor runs and to contagion from less sound institutions.
The Bill notes that the advent of deposit insurance has proven to prevent major banking crises in the world over and plays a central role in maintaining financial stability.
FINANCIAL INSTITUTIONS BILL
The Financial Institutions (Amendment) Bill 2018 seeks to amend four sections of the Act while repealing another four sections.
It notes that the inadequacies of the existing bank insolvency regime do not distinguish between corporate failures and banking failures, as both are subject to a form of commercial insolvency law and in a number of respects; the commercial insolvency law model is ill-suited to deal with the failure of banks.
It states that the corporate insolvency model uses judicial instead of administrative proceedings with all the attendant delays.
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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