Financial Crime World

Guyana’s Financial Institutions Face Tough Compliance Requirements

The Bank of Guyana has recently introduced new regulations aimed at ensuring that financial institutions operating in the country comply with stringent requirements. The Financial Institutions Regulations 1996, which came into effect on March 29, 1996, outline the rules governing the operations of licensed financial institutions.

Non-Depository Financial Institutions

  • Prohibited from accepting deposits or borrowing funds from more than 20 individuals, excluding:
    • Licensed financial institutions
    • Multilateral lending agencies
    • Parent companies
    • Subsidiaries
    • Affiliated companies
    • Controlling shareholders
    • Directors
    • Officers
    • Officials
  • Must specify their principal financial business in their application and make no major changes without prior approval from the Bank.
  • Required to comply with minimum capital requirements and licensing guidelines set by the Bank.

Foreign Companies

  • Must have a minimum assigned capital for their branches or subsidiaries of at least the amount specified by the Bank.

Depository Financial Institutions

  • Prohibited from engaging in trust business without prior written approval from the Bank.
  • Non-depository financial institutions require special permission to conduct trust business, which involves separate organizational, administrative, and functional structures.

Trust Agreements

  • Must be made in writing and contain no features or provisions that render them as deposits or borrowings of funds.
  • Schemes for collective investment of funds held in trust or fiduciary capacity must be submitted to the Bank for evaluation 60 days prior to offering.

Licensed Financial Institutions

  • Authorized to engage in trust business must maintain separate books and records on trust and similar fiduciary accounts, which are distinct from their other business activities.

Conclusion

The introduction of these regulations is expected to enhance transparency and stability in Guyana’s financial sector. The Bank of Guyana has emphasized the importance of compliance with these requirements to ensure that financial institutions operate in a responsible and sustainable manner.