IN November 2018,the Bank of Nova Scotia trading under the name of Scotia Bank, announced that it was selling its branches in Anguilla, Antigua, Dominica, Grenada, St Kitts and Nevis, St Lucia, Sint Maarten and St Vincent and the Grenadines to Republic Bank Financial Holdings(RBFH).

This announcement was unexpected and even the branches of Republic Bank were unaware of the transaction and at the Annual General Meeting of the Guyana branch, the management could give no further information than what had been carried in the media. It, therefore, seemed that the deal was done at the highest levels between RBFH and Scotia Bank.

In Guyana, there was surprise at the suddenness of the announcement and the aura of secrecy surrounding the deal and there was immediate public opposition to it. Led by the consumer community, there was strong opposition to the deal, since it would result in Republic Bank moving into a monopolistic position to control credit and bank charges and eliminate whatever competition remained in the banking system, Republic Bank at the moment holds 35.5 per cent of the banking system’s assets and 36.5 percent of deposits and with Scotia’s assets and deposits, it would have been a monopoly. The customers of Scotia did their banking business there because it was an international institution and had no wish to join Republic Bank.

As indicated above, the Guyana Consumers Association opposed the sale and the Consumer Concerns column carried two or three articles on how a monopoly could negatively affect the interests of consumers. The association did some lobbying and for instance, approached the Consumer and Competition Commission to throw their weight against the sale. It was felt that if Scotia must sell, they should sell to the indigenous banks or a consortium of them.

In any case, the Bank of Guyana did not permit the sale since, in the words of Dr Gobind Ganga, the Governor, “[takeover] would lead to systemic issues which would have affected the health of the financial system here. . .”

After many months of silence, Scotia has said that it will not be selling its local branch. This decision could well have been prompted by the fact that Guyana has now become an oil-producing country with great financial and economic prospects. This is evidenced by the number of financial institutions that have been approaching the Ministry of Finance to enter the Guyana market including the great American multi-national Citibank.

Now that the Scotia issue has been settled, the Ministry of Finance, the Bank of Guyana, the political parties and the citizenry should turn their attention to resolving the following banking issues:

(i) Bringing the savings and lending rates of interest closer. At the moment, the savings rate is one percent while the lending rate is 12 per cent to 15 per cent .

(ii) Bank charges should be reviewed to bring them in consonance with the lower charges that obtain elsewhere

(iii) loans should be granted more easily. (iv)The Guyana diaspora send their relatives hundreds of millions of dollars each year, but the cost of transfer is at least 10 per cent, In other parts of the world, such remittances cost four per cent or even less.