Bank of PNG

Strict banking process, less accounts

East Sepik Governor, Allan Bird, recently outlined in a Parliament sitting that ordinary citizens are “harshly dealt with by the banking system” when it comes to depositing large sums of money. He drew attention to the cash-based informal sector, where 80 percent of Papua New Guineans operate in.

Bakani agreed with Bird’s sentiments, saying: “If the commercial banks know the profile of the company, and if they’re producing documents to justify the deposits they’re making, they shouldn’t be asking more questions.”

New 50t Coin Released

The fifty toea coin has been used over the years as a commemorative coin to mark special and significant events in the country. This new 50 toea coin will remain as a standard circulating coin in the event that the commemorative coins currently in circulation are depleted.

The 50 toea coin retains the dimensions and most design elements of the existing 50 toea coin except for the reverse side, which depicts the Birdwing Butterfly (Ornithoptera Paradisea). This new design was originally used on the one toea coin that was demonetized in 2012.

Central Bank Governor pays tribute to Sir Michael

Central Bank Governor Loi Bakani in his condolence message to the founding father of the nation said PNG owes him much for what it is today – a vibrant, progressive democratic nation of diverse cultures, traditions and tribes.

“Sir Michael joins an elite group of leaders who led their countries into independence and nationhood – forging a national identity, building national institutions and developing alliances across local and international borders.

Sir Michael’s achievements are unique and will be unmatched by anyone in PNG.

CTSL announces 6.5% crediting rate

This follows an impressive cash flow reversal for the fund after the CTSL Boards removal mid 2019.

The announcement was made by Statutory Manager, Sitiveni Weleilakeba, CEO Charlie Gilichibi, and PNGDF Commander, Major General Gilbert Toropo.

The announcement comes off the back of a turbulent year in which the entire CTSL Board except PNGDF Chief of Staff, Capt. Philip Poleware, were suspended by the Bank of PNG in July 2019.

The Central Bank was of the view that the then Board did not perform in accordance with the Central Bank regulations and expectations.

BSP Reduces Indicator Lending Rate

BSP’s lending products that are linked to its ILR will reduce by 1% from 1 April, 2020, and other products such as its variable rate, Home Loan will reduce by 1% to 5.5%.

In a statement on March 31st, BSP CEO Robin Fleming said: “Our fixed rate loan products are treated slightly different to the variable rate. Our First Home Owner Housing Loan will remain at 4.00% pa fixed. New Personal Loans and New Smart Business Loans/SME Loans will have a 1% reduction in interest rate which in the case of Personal Loans will be 26%.”

BPNG directs FX priority for COVID-19

The Bank of PNG will also make foreign currency available directly to the National Department of Health of urgent COVID-19 relocated purchases abroad.

This is among several monetary policy measure responses by the Central Bank to the impact of COVID-19.

Another key measure is the reduction of the Kina Facility Rate (KFR) from 5 percent to 3 percent which will push interest rates down.

Commercial Banks have been directed by the Central Bank to reduce their respective Indicator Lending rates (ILR).

Loans societies urged to have governance framework

Assistant Governor to the Bank of PNG, Ellison Pidik, said this recently when issuing 16 licensing certificates to Savings & Loans Society companies.

It was a milestones event as it was the first time in history that the Central Bank issued a high number of licences.

As part of the reforms under the new Savings and Loan Societies Act 2015, all existing societies are required to incorporate as a company and be issued a new licence to continue operating.

BPNG to launch Retail Electronic Payments System

According to BPNG, the system will deliver efficiency, security and convenience in the National Payments System.

“The REPS will enable entry for financial institutions into the National Payments System (NPS) to offer plastic card and mobile payment services to their customers,” says BPNG.

“This will result in more people and businesses having access to financial services throughout the country, especially outside the main centres.

Bank pioneers new technology

This is a digital software solution that allows all of the banks in PNG to connect to one another through the central bank.

Greg Pawson, Chief Executive Officer of Kina Bank, said: “The new switch is a game-changer for banking in PNG. It will lead to additional customer choice because it removes barriers to entry for smaller financial institutions who offer their own cards or EFTPOS and ATM services.”

Gaps in financial consumer protection

The finding follows a review by the Bank of PNG and the International Finance Corporation (IFC), into financial services available to people in PNG, including financial consumer protection laws, financial service institutions and practices in PNG.

This had led to consultations between BPNG, IFC and financial institutions on the fair and equitable treatment of consumers who take out loans and access other financial services.