Guyana Regulates Financial Institutions: Deposit Taking and Control

Georgetown, Guyana - The Government of Guyana has taken significant steps to regulate financial institutions in the country, with a focus on deposit taking and control. A recent amendment to the Financial Institutions Act aims to ensure the stability and transparency of Guyana’s financial sector.

Minimum Capital Requirements

Financial institutions are now required to maintain a minimum capital base as a percentage of their total assets, contingencies, and off-balance sheet commitments. This requirement is designed to ensure that institutions have sufficient funds to meet their obligations in times of financial stress. The Bank of Guyana will also have the power to vary these limits, but only after providing at least 30 days’ notice and ensuring that any changes do not decrease the minimum dollar levels specified in the Act.

Licensing and Control

The amendment prohibits anyone other than a licensed financial institution from using words such as “bank”, “financial institution”, “savings”, and “loan” or their derivatives in their name or description. This is designed to prevent unauthorized entities from misleadingly representing themselves as financial institutions.

Additionally, the Bank of Guyana will have stricter controls over the acquisition of control of licensed financial institutions. Anyone seeking to acquire control of such an institution must submit an application to the Bank, which will consider factors such as the applicant’s background, experience, and integrity, as well as the financial condition and capitalization of the institution being acquired.

Advertising Regulations

The amendment also includes provisions for the regulation of advertising by financial institutions. Licensed financial institutions are prohibited from making false or misleading representations about their business activities. Similarly, they are required to use the word “bank” or one of its derivatives in their title or description.

Consequences of Non-Compliance

Offenders who contravene these regulations face fines of up to $100,000 per day for every day the offense continues.

Impact and Outlook

The move is seen as a step towards increasing transparency and stability in Guyana’s financial sector. This amendment demonstrates the Government’s commitment to regulating and monitoring the activities of financial institutions to ensure the protection of depositors and the overall stability of the economy.