“Gov’t can withdraw at any time” – Urling slams PSC position on $60B

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Clinton Urling
Clinton Urling
Clinton Urling

[www.inewsguyana.com] – Former President of the Georgetown Chamber of Commerce and Industry (GCCI), Clinton Urling says the Private Sector Commission (PSC) should not asked the government not to withdraw funds from commercial banks.

The PSC in a statement on Tuesday August 04, warned against the withdrawal of the funds, stating that it could have some dangerous ramifications for Guyana’s economy.

“The PSC is concerned that the current situation can lead to a high level of non-performing loans and is extremely concerned about the intended removal of over $60 billion in Government funds that are deposited at the Commercial Banks. There is an increased level of defaulting loans being recorded in some sectors of the Economy,” a release stated.

However, Urling, in a statement on Wednesday, said that the PSC cited no proper reasons for its position hence it can be inferred “that what the PSC seems to be saying is that our commercial banks are dependent on government deposits to maintain their successful operations.”

“If government deposits into a commercial bank, it is the same as any private individual or company doing so: they can withdraw their deposits at any time. Commercial Banks must cater for this reality at all times. Moreover, the Central Bank caters for this through the application of a statutory reserve requirement (a percentage of transaction deposits and other liabilities) for commercial banks,” said the Former GCCI President.

He however admitted that the economy is at a troublesome and worrying place currently but there is no reason why the PSC would advise against government withdrawing its own money from the highly profitable commercial banks.

“Worst-case scenario, government can act as a lender of last resort, through the central bank, to the commercial banks if those banks face any threat of bankruptcy as a result of the large withdrawal.If the $60 billion figure is accurate, it then raises another question of the opportunity cost of government leaving all that liquidity dormant. This money could have been invested into many different development programmes generating higher financial and social returns,” Urling pointed out.

“The more that money is out there, it means the private sector would have increased opportunities to access more available cash in the economy, thus improving their bottom-line. If the $60 billion stays dormant in commercial banks, I don’t see how that helps anyone but the rich banks,” said Urling.

6 COMMENTS

  1. Did you ask your Peepeepee for any trail,,,wake up jack,,the 23 yrs of crime by your PPP, its trails leading to florida,queens and can you trail the 120 million from jenn, 100million from ash,and how about trailing the vehicles and all the land sold for nothing,,

  2. With 8 years of successful growth, they new administration should not be worried about a Fall in the economy unless they are causing it. If they remove the $60B and their is a down turn on the economy. They government could become the culprit.

  3. Thank you Urling for your contribution , I was thinking why such comment from the PSC they need to generate new and innovative ways of keeping their customers, also where have to be a time when consumers spending will drop. the PSC needs to go into retreat and come up the new and possible ways of operating. There is a glut on the market and still the PSC does not think that it is possible to lower prices,so things will have to look that way. China is a good example.

  4. People, listen to what he is saying, put party favor aside. What he said is accurate. Commercial banks should not be depending on government fun to generate income.

  5. Urling soup ent selling since he joined up with the PPP/C . Now he trying to curry favour with the coalition . I’ll bet Urling will soon openly declare his support for the coalition. The issue here is not whether the Govt. can or cannot withdraw .The issue is whether it is prudent to do so at this time . What would the repercussions be on the economy in the circumstances we have presently found ourselves in . These bankers know fully well what they are talking about. Go for it Urling , it is possible for you to succeed .

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