Banking in Guyana follows the country's tumultuous economics history, from formal introduction under British rule, the socialist-oriented nationalization of banks at independence, to IMF sponsored open-market initiatives. The banking industry faces increased pressure to meet global standards domestically, as well as attract international investors, and serve the large number of diaspora that remain economically tied to the country.
Early domestic economics relied predominantly on bartering and an enslaved workforce. [1] Formal banking services for the colonial Europeans was done in Europe and maintained from abroad. [2] Among the slave and laboring classes, financing was made through informal banking systems and cooperatives, [3] which still function as a means for financing to this day. [4] [5] The first domestic financial institution was Savings Bank, founded in 1828 for the benefit of slaves who earned money from side jobs and eventually evolved into the Post Office Savings Bank. [2]
Colonial Bank was chartered in 1836 by a consortium of merchants and private bankers in London. British Guiana Bank was also chartered that same year.
British Guiana Bank became Royal Bank of Canada in 1913. In 1925 Colonial Bank merged with two other British banks to become Barclays Bank (Dominion, Colonial and Overseas).
Guyana's independence from Britain in 1966 had a significant impact on the economy and banking industry. At the time of independence, the banking and financial sector was quite underdeveloped, serving an agriculture-heavy economy that had been tightly regulated by the Colonial Authority. [6] In 1970, the People's National Congress government established the Guyana National Co-operative Bank (GNCB) as a development bank to serve rural and communities. GAIBANK was formed in 1973 as a development bank for agriculture and later merged into GNCB. [7]
In 1984, major foreign banks were nationalized: RBC became National Bank of Industry and Commerce (NBIC), Chase Manhattan Bank became Republic Bank, and Barclays changed to Guyana Bank for Trade and Industry Ltd. (GBTI). Republic Bank was later merged with GBTI. [2] Bank of Baroda and Bank of Nova Scotia opened offices in Guyana after independence and remained foreign-owned during this time.
A parallel economy developed to deal with various economic problems, but was also a major source of inflation and currency instability. According to economist Clive Y. Thomas, the parallel economy of this time was "one-half to roughly the same size as the official economy". A lucrative activity of the black market was trading foreign exchange, which undermined the government's attempts to maintain an over-valued, fixed exchange rate. At one point, the exchange rate for US$1 was G$60 on the black market, compared to the official rate of G$33. [8]
By 1988, the country was deep in recession and had amassed a debt of $500 million. [9]
IMF Economic Recovery Programme initiated broad economic change to the country, shifting from the socialist policies to those of free markets, which led to a rise in GDP in the 90's. [10] The majority of the banking industry was government owned, so new policies were set in place to privatize the industry. The cambio system was initiated to legalize the black market for foreign currency. [11] As of 2020 there are 19 such companies registered with the central bank. [12]
In 1991 the government started selling shares of GBTI, and by 1994 it was entirely privately owned. [2] Republic Bank, headquartered in Trinidad and Tobago, purchased the majority of shares of NBIC to become Republic Bank (Guyana) after recovering rights to the name from GTBI.
In 1994, two new banks were licensed, Citizen's Bank (a Jamaican bank) and Demerara Bank. Demerara Bank was the first private sector indigenous bank, founded by Dr. Yesu Persaud and Mr. Kads Khan a former member of Parliament. [2]
Also in 1994, GBTI introduced the first ATM in Guyana. [13]
The economic growth Guyana had enjoyed began to slow in 1998 due to factors including undeveloped capital markets, limited access to credit, and high emigration of educated individuals leading to brain-drain. [10] These issues as well as previous waves of large-scale emigration have contributed to remittances making up a large portion of the country's GDP. Even though remittances are often critiqued for doing little to improve economies of the recipient country, banks in Guyana use remittances as an opportunity for financial deepening by requiring opening of a savings account before disbursement. [14]
The International Monetary Fund instituted Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) policies, which instigated an exodus of correspondent banks from the Caribbean. [15] Threatened by heavy fines for non-compliance, foreign banks started cutting ties to smaller Caribbean banks, impacting money transfers and currency exchange in the region.
Republic Bank acquired Scotiabank in 2019, which increased Republic Bank's share of Guyana's assets and deposits to 51%. [16]
Bank of Baroda announced plans to sell off their Guyana operations, but reversed their decision, possibly due to the discovery of off-shore oil as motivation to stay in the country. [17]
In 2020, Citibank showed interest in starting a presence in Guyana. [18]
Bank of Guyana is the central banking authority of the country. It is the sole entity responsible for printing money in Guyana, but prior to its formation in 1965, bank notes were printed by commercial banks as well as the government. Plans for a National Payment System have been devised with the World Bank that will modernize interbank communications. [19] [20]
A central bank, reserve bank, national bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base. Many central banks also have supervisory or regulatory powers to ensure the stability of commercial banks in their jurisdiction, to prevent bank runs, and in some cases also to enforce policies on financial consumer protection and against bank fraud, money laundering, or terrorism financing. Central banks play a crucial role in macroeconomic forecasting, which is essential for guiding monetary policy decisions, especially during times of economic turbulence.
The economy of Nauru is tiny, based on a population in 2019 of only 11,550 people. The economy has historically been based on phosphate mining. With primary phosphate reserves exhausted by the end of the 2010s, Nauru has sought to diversify its sources of income. In 2020, Nauru's main sources of income were the sale of fishing rights in Nauru's territorial waters, and revenue from the Regional Processing Centre.
The economy of Nicaragua is focused primarily on the agricultural sector. Nicaragua itself is the least developed country in Central America, and the second least developed in the Americas by nominal GDP, behind only Haiti. In recent years, under the administrations of Daniel Ortega, the Nicaraguan economy has expanded somewhat, following the Great Recession, when the country's economy actually contracted by 1.5%, due to decreased export demand in the American and Central American markets, lower commodity prices for key agricultural exports, and low remittance growth. The economy saw 4.5% growth in 2010 thanks to a recovery in export demand and growth in its tourism industry. Nicaragua's economy continues to post growth, with preliminary indicators showing the Nicaraguan economy growing an additional 5% in 2011. Consumer Price inflation have also curtailed since 2008, when Nicaragua's inflation rate hovered at 19.82%. In 2009 and 2010, the country posted lower inflation rates, 3.68% and 5.45%, respectively. Remittances are a major source of income, equivalent to 15% of the country's GDP, which originate primarily from Costa Rica, the United States, and European Union member states. Approximately one million Nicaraguans contribute to the remittance sector of the economy.
The economy of Guyana is one of the fastest growing economies in the world, with a gross domestic product (GDP) growth of 19.9% in 2021. In 2024, Guyana had a per capita gross domestic product of Int$80,137 and an average GDP growth of 4.2% over the previous decade. Guyana's economy was transformed in 2015 with the discovery of an offshore oil field in the country's waters about 190 km from Georgetown, making the first commercial-grade crude oil draw in December 2019, sending it abroad for refining.
A reserve currency is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international transactions, international investments and all aspects of the global economy. It is often considered a hard currency or safe-haven currency.
Currency substitution is the use of a foreign currency in parallel to or instead of a domestic currency.
The global financial system is the worldwide framework of legal agreements, institutions, and both formal and informal economic action that together facilitate international flows of financial capital for purposes of investment and trade financing. Since emerging in the late 19th century during the first modern wave of economic globalization, its evolution is marked by the establishment of central banks, multilateral treaties, and intergovernmental organizations aimed at improving the transparency, regulation, and effectiveness of international markets. In the late 1800s, world migration and communication technology facilitated unprecedented growth in international trade and investment. At the onset of World War I, trade contracted as foreign exchange markets became paralyzed by money market illiquidity. Countries sought to defend against external shocks with protectionist policies and trade virtually halted by 1933, worsening the effects of the global Great Depression until a series of reciprocal trade agreements slowly reduced tariffs worldwide. Efforts to revamp the international monetary system after World War II improved exchange rate stability, fostering record growth in global finance.
The 1997 Asian financial crisis was a period of financial crisis that gripped much of East and Southeast Asia during the late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1999 was rapid, and worries of a meltdown quickly subsided.
Financial services are economic services tied to finance provided by financial institutions. Financial services encompass a broad range of service sector activities, especially as concerns financial management and consumer finance.
The foreign exchange market is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world, followed by the credit market.
The economy of Africa consists of the trade, industry, agriculture, and human resources of the continent. As of 2019, approximately 1.3 billion people were living in 53 countries in Africa. Africa is a resource-rich continent. Recent growth has been due to growth in sales, commodities, services, and manufacturing. West Africa, East Africa, Central Africa and Southern Africa in particular, are expected to reach a combined GDP of $29 trillion by 2050.
The Bank of Korea is the central bank of South Korea and issuer of South Korean won. It was established on 12 June 1950 in Seoul, South Korea.
International economics is concerned with the effects upon economic activity from international differences in productive resources and consumer preferences and the international institutions that affect them. It seeks to explain the patterns and consequences of transactions and interactions between the inhabitants of different countries, including trade, investment and transaction.
The 'Economy of the Caribbean' is varied, but depends heavily on natural resources, agriculture and travel and tourism.
A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes with international aid as one of the largest financial inflows to developing countries. Workers' remittances are a significant part of international capital flows, especially with regard to labor-exporting countries.
The Bank of Guyana (BoG) is the central bank of Guyana. It was established in 1965 in advance of the country's independence in 1966. Dr. Gobind Ganga has been the governor of BoG since December 2014.
The Central Bank of the Islamic Republic of Iran, also known as Bank Markazi, was established under the Iranian Banking and Monetary Act in 1960, it serves as the banker to the Iranian government and has the exclusive right of issuing banknote and coinage. CBI is tasked with maintaining the value of Iranian rial and supervision of banks and credit institutions. It acts as custodian of the National Jewels, as well as foreign exchange and gold reserves of Iran. It is also a founding member of the Asian Clearing Union, controls gold and capital flows overseas, represents Iran in the International Monetary Fund (IMF) and internationally concludes payment agreements between Iran and other countries.
The Bank of Mozambique is the central bank of Mozambique. The bank does not function as a commercial bank, and has the responsibility of governing the monetary policies of the country. The president of the Republic appoints the governor. The bank is situated in the capital, Maputo, and has two branches, one in Beira and one in Nampula. The Bank of Mozambique is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.
The history of banking in China includes the business of dealing with money and credit transactions in China.
Republic Bank (Guyana) Limited was formed in 1836 as the British Guiana Bank, which was the first commercial bank in British Guiana, now Guyana. As of 2024 it has 12 branches and 52 Automated Teller Machines (ATMs).
{{cite web}}
: CS1 maint: unfit URL (link){{cite web}}
: CS1 maint: multiple names: authors list (link){{cite journal}}
: Cite journal requires |journal=
(help)