Guyana’s Banking Regulations Under Scrutiny as Country Works to Strengthen Financial Systems

The Bank of Guyana plays a crucial role in implementing monetary policy and overseeing the operations of Guyana’s six commercial banks, as well as other domestic financial institutions. However, concerns have been raised about the regulation of local currency traders, known as “cambios,” who provide currency exchange services but operate in a loosely regulated environment that may be prone to money laundering.

Regulatory Framework

The Financial Institutions Act No.1 of 1995 provides the regulatory framework for banking and other financial business in Guyana. This act outlines requirements for licensing, paid-up capital, restrictions on activities, supervision, and provisions for insolvency. However, in 2013, the Caribbean Financial Action Task Force (CFATF) advised Guyana to take action to protect its financial systems from anti-money laundering and terrorist financing threats.

FATF Recommendations

Guyana was subsequently referred to the global Financial Action Task Force (FATF), but after addressing deficiencies identified in the Core and Key Recommendations, the country successfully exited the FATF International Cooperation Review Group in 2016. While Guyana has removed from FATF’s watch list and has the necessary legislation in place to curb money laundering and counter terrorist financing, implementation remains a challenge.

Modernizing Financial Systems

In an effort to modernize its financial systems, Guyana passed a Financial Institutions Bill in July 2018, which includes a framework for electronic money transfers. The bill aims to promote foreign investment and manage oil revenues by adding financial transparency. The Central Bank is also implementing Real-Time Gross Settlement, allowing for real-time money transactions that could increase transparency and reduce money laundering and corruption.

Challenges Ahead

Despite progress, concerns about the country’s banking regulations remain, with the need for continued efforts to strengthen its financial systems and protect against potential threats.

Key Takeaways:

• Guyana’s banking regulations are under scrutiny due to concerns about the regulation of local currency traders (cambios)
• The Financial Institutions Act No.1 of 1995 provides the regulatory framework for banking and other financial business in Guyana
• Guyana has addressed deficiencies identified by FATF, but implementation remains a challenge
• Modernization efforts include electronic money transfers and Real-Time Gross Settlement
• Continued efforts are needed to strengthen Guyana’s financial systems and protect against potential threats.