President of the Guyana, Dr. Mohamed Irfaan Ali, on Wednesday, announced that in light of economic constraints caused by the COVID-19 pandemic, he has consulted with the Governor of the Bank of Guyana (BOG) on the way forward.
The Governor further consulted with the Guyana Bankers Association, which yielded several relaxations.
“The Bank of Guyana will extend the moratorium to December 2020. To allow banks to further defer customers payments to the end of December 2020, to cope with the low revenue generation needs, to meet operational needs,” President Ali said.
The deference will result in loans not being classified as non-performing and will not require loan loss provisioning. The Bank of Guyana will further waive Section 13 and relax Sections 14 and 15 of the Supervision Guidelines until December 2020.
“Additionally, a waiver is being given to section 13 of Supervision Guideline: number 5. The relation of stringent statutory measures is intended to result in direct benefit to customers of banks, by giving the financial institutions the ability to operate with more flexibility,” the Head of States outlined.
He noted that the Bank of Guyana will reduce liquidity requirements in two areas.
The reducing of the reserve requirements from 12% to 10%, the lowering of liquids asset requirements for demand and deposit from 25% to 20%; and saving and timed deposit from 10 to 15%.
“These measures will result in overall increased liquidity in the financial sector. The reduction in reserve requirement will result in the injection of $9.4Billion, and the reduction in the liquid asset requirement will immediately release an estimated $23.3Billion in the economy.”