The prudent manager of the banking sector is the Central Bank of Guyana. It was established in 1998 as an independent institution.
The Central Bank of Guyana is constantly looking for ways and means to protect itself from infiltration and criminals of all sorts. As such, it is often strengthening the laws it is governed by.
According to the Central Bank Governor, Dr. Gobind Ganga, the framework which provides the parameters for the exercise of the powers and execution of the functions of the Bank of Guyana has been expanded beyond its two main pieces of legislation being the Bank of Guyana Act and the Financial Institutions Act.
He said that the widening of the legislative framework arose from the enactment of the Anti- Money Laundering and Countering the Financing of Terrorism Act No. 13 of 2009, the Insurance Supplementary (Provisions) Act No. 16 of 2009 and the Money Transfer Agencies (Licensing) Act No. 20 of 2009.
Dr. Ganga said it is important to note that the Bank of Guyana Act No.19 of 1998 establishes the Central Bank as an autonomous institution.
According to the Act, the principal objective of the Bank is states that “Within the context of the economic policy of the Government, the Bank shall be guided in all its actions by the objective of fostering domestic price stability through the promotion of stable credit and exchange conditions, as well as sound financial intermediation conducive to the growth of the economy of Guyana.”
This Act also includes provisions governing the administration of the Bank, relations between the Bank and licensed financial institutions and the Bank and the Government. It also places the exclusive responsibility for supervision and regulation of licensed financial institutions on the Bank and tasks it with the responsibility of oversight of the payment system.
As for the Financial Institutions Act 1995 which came into operation on the May 29, 1995, this was created the framework for the regulation of the business of banking and other financial business in Guyana.
This Act consists of nine parts which includes requirements related to licensing of financial institutions, paid up capital, restrictions on banking and financial activities, supervision of licensed financial institutions and provisions for insolvency and winding up.
The Financial Institutions Act remained substantially unchanged since its enactment in 1995 until November 2004 when amendments were made by way of modification of some sections of the Act and the inclusion of new emergency provisions dealing with temporary control.
The 2004 amendments sought to provide for the prevention of the abuse of financial institutions by insiders, enhance corporate governance and strengthen the powers of the Bank to deal with problematic licensed financial institutions.
The Central Bank is also responsible for the licensing and supervision of dealers in foreign currency (cambios). Cambios are licensed to buy and sell foreign currencies. Regulation is conducted in accordance with the Dealers in Foreign Currency (Licensing) Act 1989. The Act originally gave the Minister of Finance the power to grant licences, renewable annually. In 1995 the Act was amended, transferring to the Bank of Guyana in consultation with the Minister full responsibility for administering the Act.
The Central Bank is also guided by the Insurance (Supplementary Provisions) Act 2009 and the Money Transfer Agencies (Licensing) Act 2009. One of the most important Acts, as cited by the Central Bank Governor is the Anti- Money Laundering and Countering The Financing of Terrorism Act 2009 which repeals and replaces the Money Laundering Prevention Act of 2000.
This law seeks to provide for the prevention of money laundering, combating the financing of terrorism and the civil forfeiture of criminal assets.