Following complaints from pensioners and parents of minor savers of unnecessary hassle in conducting transactions, the Bank of Guyana (BoG) is working with banks to ease red tape without breaking any of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) laws.
“The Bank of Guyana is working with banks to make it easier, to have some kind of standardized procedure to follow that would bring an ease to this but most importantly, in keeping with AML legislation and so on,” a source close to the process told Stabroek News.
Only recently the New Building Society was singled out by a parent after she was flagged when she went to the bank to conduct a small transaction for her child.
“My eight-year-old son and I, his mother, have a bank account at the New Building Society (NBS). Just after his birth it was opened to deposit all his monetary gifts he got from grandparents and friends for special occasions. Recently I was told by a teller that I have to provide proof as to where I got this money from along with other documents,” the parent explained.
“Why do they need all these unnecessary documents for a child’s account which has way below $100,000?”she questioned.
Stabroek News visited Republic Bank (Guyana) Ltd, the Guyana Bank for Trade and Industry and Scotia Bank, which all have special savings plans for minors in their respective Right Start, Early Savers and Primary accounts to find out about the process of opening the accounts. These accounts have incentivized features not attached to regular savings as not only is their interest higher but the account holder is eligible for bursary and other rewards offered by the respective banks such as discounts from select stores and birthday cards.
All had similar requirements that parents would need to provide a birth certificate of the child and in the case of guardians, legal documented proof of guardianship. The caregiver also has to present the child on the day of the opening of the account. The legal caregiver must have two forms of their own identification, show proof of address by way of mail received not later than six months prior, their Taxpayer Identification Number (TIN) and a valid recent pay slip of proof of income.
The banks were asked if a stay at home mother or housewife wanted to open an account and had no proof of income what happens, since in most cases it is the mothers who pursue early savings security for their offspring.
At Republic Bank the teller would only say that “once there is satisfactory proof of income and that the person is indeed a housewife, there should not be a problem.” He was quick to point out that the deposits have to fit within a certain amount but did not explain in detail what was meant by a “certain amount”.
The Guyana Bank for Trade and Industry boasted that their Early Savers opening was “very simple” and keeps within “all lawful and mandatory regulations established by the country.” Its teller said that parents must show where the child’s deposits are coming from only if they exceed “exorbitant amounts” or “very frequent small amounts that over a short period accumulate to exorbitant sums.”
The New Building Society would not speak to the reporter about the complaints or about opening an account for a child. A teller referred to a supervisor and after several minutes came back to say that the bank would only consider answers to questions if they were was sent by email and he gave a networkworksgy email and left. Emails to the said address did not go through.
This newspaper understands that the complaint by the parent about the New Building Society’s procedures adds to many lodged from customers at banks across the country. Officials says that those complaints from parents and pensioners, make up a large percent of all customer grievances received about the hassles endured during executing small transactions at local banks across the country.
It is for this reason that the Bank of Guyana said that it decided to step in and work with the banks to address the issue.
“You do not want the pensioner to have to go through all of that to collect their small piece which they are entitled to, every month. So we have to find a way to make it easier for them,” one official said.
“We understand that they must follow the law but you don’t have to make it burdensome to the elderly and parents. So we are working with them and they are working along to see how we address this in a systematic way,” the official added.
However, the official was quick to stress that at the same time banks must have mechanisms to safeguard themselves. “We are looking at ways to make it easy but at the same time you cannot have a person with a set income banking $100,000 or things like that every week for a child. The Bank has to regulate and have a system that red-flags suspicious transactions. All of these things we are looking at and I hope soon it gets easier but again in keeping with the AML/CFT,” the official said.
“Some of the banks put their own policies but it makes it harder for the pensioner so we have to work with them. We all can understand why you would not want the elderly having to go through that long list every month or every other month. I have to tell you again that you have to look out for suspicious transactions,” they added.
One banking official said that it is “hard on the banks too because the ordinary persons are not very inclined to banking with all the requirements but we have to comply.”
GBTI says that it maintains a robust AML/CFT compliance programme which is guided by policies and procedures which have been sanctioned by its Board of Directors.
“This compliance programme has been developed to conform with all AML/CFT legislation of Guyana (as amended) specifically: The Anti-Money Laundering and Countering the Financing of Terrorism Act of Guyana 2009; The Anti-Money Laundering and Countering the Financing of Terrorism Regulations 2010; Supervision Guide-line No. 13 on Anti-Money Laundering and Countering the Financing of Terrorism issued by the Central Bank of Guyana; and The Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Act 2015,” its policy on AML/CTF states.
Republic Bank has a similar brochure that explains to customers the requirements and obligations in keeping with this country’s AML/CFT laws.
“You are required to provide information on your identity, source of wealth, source of funds, nature of business/employment, proof of address and other information that may be deemed necessary,” Republic Bank states.
Guyana’s AML/CFT law states that financial institutions must monitor and report suspicious accounts.
“Reporting entities shall pay special attention to- (a) all complex, unusual large business transactions, unusual patterns of transactions, whether completed or not, that have no apparent economic or lawful purpose and inconsistent with the profiles of the persons carrying out such transactions; (b) business relations and transactions with persons in jurisdictions that do not have adequate systems in place to prevent or deter money laundering or terrorist financing; and (c) electronic funds transfer that do not contain complete originator information.”
“In relation to subsection (1), a reporting entity shall-(a) verify the background and purpose of the transactions or business relations and record its findings in writing; and (b) upon request, shall make available such findings to the Financial Intelligence Unit . A reporting entity shall monitor its business relationships and the transactions undertaken throughout the course of the relationship to ensure that its obligations under section 15 are met and that the transactions conducted are consistent with the information that the reporting entity has of its customer, of the customer’s business and risk profile and source of funds, where necessary,” it adds.