Less hassle for low-income persons to open bank accounts

Last Updated on Friday, 6 January 2023, 10:43 by Denis Chabrol

Left to right: Finance Minister Dr Ashni Singh, Prime Minister Mark Phillips, Vice President Bharrat Jagdeo and President Irfaan Ali.

Guyanese are now expected to face less hassle while opening small bank accounts and withdrawing and depositing GY$500,000  or less, officials said on Thursday.

Vice President Bharrat Jagdeo said “poor people”, with GY$500,000 or less could walk in “without all of these fancy forms (to) fill up.” He said account holders could also withdraw monies without informing the bank about the intended use.

Before the change, Mr Jagdeo said it was too burdensome on ordinary low income persons to open a bank account and do certain transactions. “It’s causing disintermediation here. People are scared of going in the banks,” he said.

The disclosure was made during an pre-National Budget consultation between top business executives, and President Irfaan Alim, Prime Minister Mark Phillips, Mr. Jagdeo and Finance Minister Dr Ashni Singh.

The Bank of Guyana is expected to issue  a circular to commercial banks outlining the new rules governing bank small, medium and large bank accounts.

The Managing Director of Citizens Bank, Eton Chester asked that the definition of a  low income or low-risk persons be extended beyond government employees and officers of statutory and regulatory bodies. “The private sector bodies are excluded from there,” he said.

Governor of the Bank of Guyana, Dr Gobind Ganga said commercial banks were being informed, a formal circular would be dispatched to them and also published in the Official Gazette.

He explained that low-income persons would be able to open bank accounts without providing proof of income or an address but they would have to sign an attestation and give the bank. Dr Ganga said banks would be required to to conduct their due diligence on the information that has been provided.

“You can’t keep people out because they are doing these really low-risk types of transactions,” he said.

Reflecting on concerns that were raised about conducting some types of business at commercial banks, the Managing Director of Citizens Bank said the financial institutions were not to be blamed for the requirements. “I heard about the difficulty with establishing accounts relationship with the commercial banks and it is said that it is the commercial banks… But the commercial banks are only following the instructions of the Central Bank,” he said.

President Ali noted that opening a bank account in “sophisticated markets” could take 20 minutes in contrast to “imposed” hurdles that could take as much as two weeks.