Central Bank ‘very concerned’ at CL Financial woes

-monitoring closely

Deputy Governor, Dr. Gobind Ganga says that the Central Bank is “very much concerned” at the financial crisis which erupted within the CL Financial Group, confirming that it is tracking every bit of information being provided on the issue as it develops.

“…anything to do with the financial sector we follow and we are concerned about this issue and are following all information that is being provided so as to assess what impact if any it would have on the financial sector here”, Dr. Ganga said yesterday.

Lawrence Williams
Lawrence Williams

The Bank of Guyana through its Governor, Lawrence Williams and his deputy, Dr. Ganga, went on record yesterday saying that the takeover in Trinidad of some CL Financial subsidiaries has no impact on the financial sector here except for Republic Bank (Guyana) shareholding. But, the Central Bank said it has received word and is assured that there is not likely to be any direct implications on the operations of Republic Bank (Guyana). The Trinidad Government will now be the majority shareholder in Republic Bank (Guyana’s) Trinidad parent company.

Dr. Ganga declared that Republic Bank (Guyana) is a highly liquid and sound bank, which has received a clean bill of health from the Central Bank, reiterating that the current CL Financial problems will not affect the conduct of financial business with Republic Bank (Guyana).

The Central Bank considered it an opportune time to announce the launch of its financial literacy programme yesterday, but emphasized that there was no nexus between what is happening globally in the economic and financial environment, in addition to the more recent financial problems facing CL Financial. However, it stated that financial literacy is essential in times of economic and financial insecurity.

Williams indicated that the Central Bank was able to discern the need for such advice among the local populace, noting that it recognized as much from its continued surveillance of the financial sector, as well as from queries and complaints received from individuals.

He stated that there is an overwhelming need for educating the populace on the financial matters that impact their lives daily.

Gobind Ganga
Gobind Ganga

As part of its new literacy campaign the bank will drive home the significance of how to use money and make informed financial decisions, Williams said.

By enhancing the lives of Guyanese with greater economic security, he said, that this will translate into greater national wealth with higher economic growth and development.

The programme is to be officially launched during the second half of the year and will target everyone. Williams called it a mammoth undertaking while pointing out that it will also be costly. However, he said the Central Bank will partner with key stakeholders from various sectors within the country such as the commercial banks; trust companies; consumer groups and the Ministry of Finance.

The programme objectives include helping persons to be aware of and avoid schemes aimed at defrauding them of their savings; helping people to make wise investment, savings and borrowing decisions.

With close to $25,000 in counterfeit bills in circulation in the country, a critical part of the literacy campaign would be training people on how to detect the fake bills. Williams said that the bank had already initiated awareness programmes by conducting sessions and workshops in city areas and outside Georgetown with residents on various issues including the value of a cash-less society.

Deputy Governor of the bank, Dr. Ganga told reporters that the bank is aware of the informal economy and the presence of dirty money in use. However, he said that the Central Bank is not privy to information on any of the relationships the commercial banks have with their clients and is also not in a position to quantify how much of that money is in the system. Dr. Ganga was at the time responding to a question.

Meanwhile, Williams disclosed that the Central Bank is about to undertake currency reform, but stressed that no decision can be made without the necessary consultations being conducted.

He said that the focus of the reform programme would be on formulating an appropriate currency structure, adding that the bank is also expected to address the issue of whether to keep the $5 and $1 dollar coins in circulation.