No Deposits Allowed: Financial Institutions Must Comply
In a move to strengthen financial regulations, the Bank of Guyana has introduced new measures aimed at preventing unauthorized deposits and ensuring the stability of the country’s financial sector.
No Unauthorized Use of Banking or Financial Terms
Under the new rules, no person other than licensed financial institutions is permitted to use words like “bank”, “financial institution”, “savings” and “loan” or their derivatives in any language, or any other word indicating banking or financial business. This applies to businesses operating in Guyana and includes:
- Advertising
- Publicity
- Any representation made to indicate that they are carrying on banking or financial business
Accurate Business Descriptions
The Bank has also specified that licensed financial institutions must not describe their business in a manner that is false, misleading, or inaccurately represents the services they offer.
New Capital Requirements for Financial Institutions
Licensed financial institutions must maintain a minimum capital base, which may be risk-weighted to reflect the creditor risks of assets and classes of assets. The Bank has the power to vary these limits, provided that it does not decrease them below the minimum levels specified.
Control of Licensed Financial Institutions
No person can acquire control of a licensed financial institution without prior written approval from the Bank. Applicants must submit detailed information about:
- Their identity
- Business background
- Plans for the acquired institution
The Bank will investigate applicants to determine whether they are fit and proper to acquire control of a licensed financial institution. The decision-making process must be completed within 90 days, unless further investigation is needed.
Consequences of Non-Compliance
Violations of these regulations may result in fines of up to $100,000 per day.
Aim of the Regulations
These new measures aim to promote transparency, stability, and integrity in Guyana’s financial sector, ensuring the protection of depositors and potential depositors.