GEORGETOWN, Guyana, July 15, (CMC) –Governor of the Bank of Guyana (BoG), Dr. Gobind Ganga, said, today, a European bank has been identified to fill the void in the local financial system, following the announcement of a pullout by Bank of America.
In an interview with the Guyana-based Demerara Waves Online News, Ganga said all of the necessary due diligence measures between the parties have been completed.
Ganga did not name the European bank, but said it would commence servicing indigenous banks from next month.
Demerara Waves Online News said it has been reliably informed that the European bank is the United Kingdom-based Crown Agents Bank, which serves small and medium-sized companies.
Last week, Ganga said that the Bank of America had indicated that it would be severing ties with local banks here, as early as next month.
However Ganga said the pull out may not have any implications for the country as other banks from North America and Europe have already expressed an interest in filling the void.
“If the void is filled, then there will not be any implications,” said Ganga, noting that only a few of the indigenous banks are affected and the reasons for severing ties were few.
“There are a number of factors, one would be that they are talking about de-risking, another factor would be the high level of liquidity, they want to concentrate more on larger customers. So there are a number of factors,” he said then.
Ganga told Demerara Waves that the entrance of a new banking relationship for indigenous banks, should not affect customers in relation to the fees paid for services provided.
“I don’t think it’s going to be more than what we are paying now…banks are different though, banks are different, we are hoping things won’t be more expensive in terms of transaction fees.”
The BoG Governor said that as a result of the upgraded financial regimes across the world, banking customers generally were subjected to “more paperwork.”
Ganga said the European bank that will replace Bank of America will also have to adhere to various regulatory regimes and, as such, not much is expected to change.
Caribbean Community (CARICOM) leaders at their summit here, last week, vowed to continue their lobbying efforts to get the banks to reverse their decision to shut down their correspondent banking relations with their counterparts in the region.