Central Bank to probe civil complaints against financial institutions

The powers of the Bank of Guyana are expected to be enhanced very soon as the Government is gearing to bring into force, the Financial Consumer Protection legislation. When enacted, it will provide for a grievance mechanism to be established and for the Bank to receive and investigate civil complaints against financial institutions. According to Finance Minister, Winston Jordan, the draft legislation will be up for consultations this year. Jordan said that this move is all part and parcel of promoting financial sector stability. Throughout 2017, the Finance Minister said that Bank of Guyana continued to develop systems to improve Government’s ability to monitor and maintain the stability of the financial sector. He said that central to this has been the drafting of amendments to the Financial Institutions Act (1995), to address the findings of the 2016 International Monetary Fund (IMF) and World Bank Financial Sector Assessment Programme (FSAP) of Guyana. He said that these amendments aim to address risks by enhancing the supervisory capacity of the Bank of Guyana and enforcing monitoring, prevention, and correction measures. Jordan noted, too, that this exercise benefitted from technical assistance, which also enabled the drafting of Financial Consumer Protection legislation. Also critical to financial sector stability is the continued enhancement of the Risk-Based Supervisory (RBS) framework of the Bank of Guyana, to adapt to changing supervisory methodology and best practices. Jordan in his budget 2018 speech said that the current framework has been in existence for over a decade. In 2017, he said that there were efforts to revise this framework to give a more structured, but flexible, approach to supervision, risk assessment and mitigation, in order to ensure that an adequate level of protection is afforded to all stakeholders. The Finance Minister said that the revised framework is expected to be implemented this year. Additionally, Jordan said that in 2017, Bank of Guyana completed a draft of the stress testing guidelines to be used by the banking system. This year, he said that consultations will be held with commercial banks to finalise these guidelines, which are intended to outline procedures to be followed when conducting stress tests.

The Finance Minister said that these tests are currently conducted by the Bank of Guyana using a top-down approach, which allows for an assessment of the resilience of the banking sector as a whole.

(Kaieteur News)