The Ministry of Labour’s new Chief Co-operatives Develop-ment Officer, Clive Nurse, says he is looking at all of the reported breaches by the National Co-operative Credit Union (NCCU) Limited and others.

Nurse, who some weeks ago succeeded Lillian Miller, says, “We are looking at the whole situation and we need some time to try and have it corrected.” Since his assumption of office, he has to deal with three problematic credit unions, namely Paradise Co-op, the Guyana Public Service Co-op Credit Union and the NCCU.

The NCCU, established in March of this year, has been soliciting deposits from the public at large, holding itself out to provide deposit insurance and interest rates between 4-8%.

However, credit unions are supposed to have a common bond, binding members together such as employment related and all Guyanese would not qualify as having a common bond for membership of a credit union. Hence, the mere solicitation of public deposits would be in breach of the NCCU’s core membership. Nurse says the ministry recognised this issue to be a problem and is looking at it to determine what class of members will determine the common bond of the credit union.

Additionally, the NCCU’s own rules only allow a maximum of 6% interest per annum on deposits as does the Co-operative Societies Act and these conflict with the public offer of 4-8% interest on deposits.

And what has most recently surfaced is that the NCCU has been acting as a discount broker for rice farmers, cashing their post-dated cheques at a three per cent discount. The NCCU says it has been extending loans to its members and has used the post-dated cheques as collateral. While this practice has been in effect for some months, the NCCU’s rules do not permit it to make loans to members with less than six months membership.

The NCCU was only formed in March and hence the six months would have expired in September, making its loans or discount brokering for rice farmers against its own rules.

And nowhere in its rules are post-dated cheques or cheques listed as accepted forms of collateral for loans nor is cashing of cheques permitted.

Nurse says he is also concerned about these reported breaches and is getting down to dealing with them. He could not provide a time-frame within which this would be done but assures that work will be ongoing until the matters are resolved.

Critics have argued that the NCCU has used the Co-operative Societies Act as a means of a backdoor entry into the banking sector as the Financial Institutions Act (FIA) exempts credit unions and co-operative societies from its purview.

Meanwhile, in an advertisement in yesterday’s Sunday Stabroek, the Guyana Public Service Co-op Credit Union (GPSCCU) says it plans to hold an Annual General Meeting (AGM) early next year. In the notice signed by Secretary E. Hardy, the GPSCCU says that management is fully aware that the last time an AGM was held was 1998/1999 when the accounts for 1994 were presented. “The accounts for the years 1995-1999 have been finalised and audited and the accounts for 2000 are in the process of being audited”. The GPSCCU added that it intends to have the accounts for 2001 completed and audited before December of this year to allow for the holding of the AGM when the accounts for 1995-2001 would be tabled. The notice said that all dividends for these years would be paid next year.

“Although management is not making excuses and is willing to take blame for this lapse, it is felt that some explanation must be given, to at least in some way, absolve us”, the GPSCCU said. It cited staffing problems, the changing of chief executive officers thrice between 1997 and 2001 and again this year as being partly responsible for the delay.

It also adverted to the need to beef up staff this year both in quality and quantity. The notice said that the court matter brought by Miller had also worked against the holding of an AGM and a request to hold one in 2002 was turned down because of the court matter.

The GPSCCU has been embroiled in controversy for a number of years over the state of its accounts. (Gitanjali Singh)