Minister of Finance Dr Ashni Singh and three leading local businessmen have stated that the Guyana’s financial sector is solid and its financial institutions well regulated.
These statements were made during a panel discussion titled ‘Discussion on Guyana’s Financial Sector’, which was televised on NCN Channel 11 on Sunday. The other panellists were Chairman of the Private Sector Commission Captain Gerry Gouveia, Chairman of Demerara Bank and Demerara Distillers Limited Yesu Persaud and Chairman of Citizens Bank and Banks DIH Clifford Reis.
During the discussion, Singh stated that Guyana has some of the most modern financial sector legislation in the Caribbean which has served the country well. He and the other panellists agreed that the country has proper and adequate regulatory bodies in place and said that the Bank of Guyana (BoG) was doing an effective job.
In connection with the current woes facing Clico (Guyana), the panel also came to the defence of Commissioner of Insurance Maria van Beek. Singh said that as regulator, the commissioner had a duty to act in the best interest of the institution and its policyholders. He said that ever since van Beek recognized the shortcomings with Clico (Guyana), she worked with it towards getting that situation remedied. He also said that the commissioner is relatively new to the post and had to work within the confines of relatively new legislation.
Reis mentioned that for years, Guyana did not have anyone functioning in the post of commissioner of insurance and the very fact that there currently was one, was a positive for the country.
Persaud also came out in support of van Beek and opined that she was doing an excellent job given the limited resources she had. He called for increased staff to work along with the commissioner, which he stated would enhance the effectiveness of the Office of the Commissioner of Insurance. He stated that the BoG was adequately staffed and suggested that was one of the main reasons why it was effective as a regulatory body.
Meanwhile Persaud also expressed concern about over persons who would enter the Guyana and sell policies without adhering to the local structure. He said serious efforts have to be made to counteract such practices because there were not productive and could have severe negative consequences.
He also stated that there needed to be a co-ordinated effort by Caricom member states if there was going to be even further significant strides in the region’s financial sector.
Reis, on the other hand, called for greater education of the public, and stated that more information provided to depositors and other customers would better convince them about the safety of their investments.
He said the local banking sector was strong and said it will continue to be carefully managed. He said that while banking systems were always exposed to some form of risk careful monitoring is always done to minimize this exposure.
While acknowledging the strength of the local financial sector, Gouveia stated that members of the private sector were concerned about the future of Clico (Guyana) particularly as it related to the policies of the customers. He also expressed concern about the $6 billion investment that the National Insurance Scheme (NIS) had in the local insurance company and said that it needed to be clear what would be done to ensure that all the money invested was recovered.
Last Friday, Stabroek News had incorrectly reported that the President had said that, if the NIS were to lose its investment of $6 billion, the government would not be bound to provide the lost sum of money and that the NIS would have to raise the money by increasing its rates or through other means. Jagdeo, at that time, was in fact referring to if there were financial shortfalls at the NIS, such as might be indicated by an actuarial review. The President stated that in such a scenario, the NIS would normally be required to reverse this deficit either by increasing its investment returns or raising its contribution rates.