In the wake of complaints from persons that certain local banks are still applying late fee charges on loans, as well as Automated Teller Machine (ATM) fees, Finance Minister Dr Ashni Singh has said that the banking relief measures should still be in effect since they were extended by Government.
In an exclusive interview with this publication, the Finance Minister noted that these measures, intended to ease the financial burden on citizens in light of the COVID-19 pandemic, were extended.
“When we came into office, we implemented a number of relief measures. These included relief measures implemented through the central bank, to cushion the impact of COVID on the private sector and households. To the best of my knowledge, those measures are still in place and should be complied with,” the minister explained, while adding that he will look into the issue.
In a communique sent to the various commercial banks in Guyana last year December, Governor of the Bank of Guyana, Dr Gobind Ganga, had indicated that all COVID-19 measures that were agreed to in August 2020 would have been extended until June 30, 2021.
“The Bank of Guyana continues to monitor the developments surrounding the COVID-19 pandemic, its impact on households and the business sector, and is prepared to take all necessary steps to protect the safety and soundness of the finance system,” Dr Ganga had detailed in the missive.
Back in August, President Dr Irfaan Ali had announced a series of measures agreed upon with the local banking sector to ease the burden on citizens. These included the waiver of ATM fees, lowered interest rates and an extension of the moratorium on loan payments.
This means that customers with mortgages and other loans would be spared the financial burden of servicing those loans during the pandemic. In addition, their loans would not be classified as non-performing, ensuring that they do not default.
“Commercial banks agreed to offer general concessional reductions of interest rates of one per cent and up to two per cent on customer loans below $10 million until December 30, 2020. The existing lending rate ranges between 6.5 per cent and 16 per cent. Some commercial banks have agreed to apply special treatment to the interest accrued during the moratorium period,” the President had explained.
“Commercial banks have agreed to waive all bank charges, including ATM and Merchant Bank charges, to encourage more out-of-bank transactions as well as…transactions by senior citizens,” he noted, adding that these measures will not impact the soundness of the banking sector.
The Head of State had also announced that the Bank of Guyana would relax certain requirements that would allow banks to cushion their losses and increase liquidity by $9.4 billion. These requirements are set out in the 13 guidelines that the BoG uses to regulate financial institutions.
He pointed out that the Bank of Guyana would relax sections 14 and 15 of the Supervision Guideline Number Five until December 2020.
“Additionally, a waiver is being given to section 13 of Supervision Guideline Number Five. The relaxation of stringent statutory measures is intended to result in direct benefits for customers to banks, by giving the financial institutions the ability to operate with more flexibility.”
Section 13 states that, “the hardcore of an overdraft facility shall be converted into a term loan, which specifies a fixed repayment programme.