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No $60B being withdrawn from commercial banks, funds are from semi-autonomous agencies accounts

Last Updated on Wednesday, 5 August 2015, 20:58 by GxMedia

Ministry of Finance

by Zena Henry

Minister of Finance Winston Jordan has clarified that there is no GUY$60b of state money being withdrawn from commercial banks. He expressed surprise when questioned on the issue Wednesday July 5.

The minister said he saw the figure come up in the media as floated by the Private Sector Commission (PSC), but has “no idea” where the business organisation got it from.

Jordan did not have the actual figure to be withdrawn from the banks and asked for a later check. He indicated however that that money is part of the same funds the government, then in opposition was arguing were being placed in accounts outside of the Consolidated Fund, by the former administration.

Jordan said the monies to be withdrawn are “public sector deposits” made into commercial banks by semi-autonomous bodies such as the Guyana Geology and Mines Commission (GGMC) and the Guyana Forestry Commission (GFC) among others.

“We have said time and time again that these funds belong in the Consolidated Fund,” Jordan explained. He said those semi-autonomous bodies cannot put the state’s money into interest bearing accounts and government then pays interest on its own money.”

The PSC claimed in a statement days ago that withdrawing the alleged GUY$60b would aid in the already slow economy and seriously affect business activities. It was mentioned too that banks may be concerned about the removal of government’s money since it will reflect on their income; while at the same time having negative record on government’s expenditure.

However should the need arise and the commercial banks need assistance for investment lending, Jordan highlighted steps they can take with the Central Bank. He insisted however that the money placed in commercial banks by these state agencies under the last government must be placed into the Consolidated Fund.

During Cabinet’s press briefing today, Minister of Governance Raphael Trotman said that the PSC, “Should accept that it is not always the case that government keeps that amount of money in other parts of the world in commercial banks.”

Apart from that, he mentioned the excess liquidity that this extra money could be contributing to. “They themselves (PSC) will admit that there is excess liquidity; that people are not borrowing, there is a lot of money just lying in banks.”

He said however that it is a matter for the Finance Ministry to come up with a healthy compromise between banks and government if necessary. It was asked whether the PSC proposed sum of money was all government’s money stashed in commercial banks, but Trotman said that would be a question for the former administration’s Finance Minister.