PM Marape welcomes Teachers Savings and Loans Society as a commercial bank

by PNG Business News - December 30, 2022

Photo: PM Marape

Prime Minister Hon. James Marape has welcomed the decision by Bank of Papua New Guinea (BPNG) to issue a provisional license to the Teacher’s Savings and Loans Society (TISA) to set up a fully-fledged commercial banking operation in PNG.

“We would like a local bank with share offering to ordinary Papua New Guineans, mothers and fathers and to our grassroot population to be set up as soon as possible,” he said.

“We need truly Papua New Guinean banks which are owned by our people and are committed to better serve our people.

“I await with keen eagerness to see the Teachers Savings and Loan Society formally obtaining a full banking license to commence operations subject to it meeting all the prudential requirements of the BPNG.”

PM Marape said the National Development Bank (NDB) Group was also working on a proposal to obtain a commercial banking license from BPNG.

“However, they will have to meet the prudential requirements of BPNG to do so, and that could well mean they must partner a major commercial bank to give confidence to BPNG that they will run independently of Government and any adverse political influence,” he said.

“The success of BSP is a good shining example of the success of public-private partnership in the banking sector and we cannot go wrong if NDB follows the same model.

“I also want to see ordinary Papua New Guineans buy shares in the establishment of such commercial banks.”

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The Minister for state enterprises, William duma has announced the approval that there will be a new commercial bank to be established in the country next year, He stated this when responding to the NCD Governor, Powes Parkop regarding banking related issues in the country in parliament recently. Minister Duma stated that the Marape-Rosso Government has decided to apply for and establish another commercial bank in the country; he explained that when taking into consideration and comparison with other countries such as Fiji and that they have more than 8 commercial banks. “In a country of more than 10 million people we need more commercial banks because if you consider current commercial banks like Westpac and ANZ, they have not been quite keen in expanding their presence and services to other parts of the country”, Minister Duma said. “We must be considerate of our people and take into account that we have a lot of people in remote areas and such it is incumbent upon us as leaders to establish another commercial bank”. “Major commercial banks such as BSP have not been able to provide the services that our people need, many of our people are unbanked due to BSP’s conduct in charging and setting a lot of fees”. Minister Duma said. Minister Duma further said that it is the responsibility of the National Government to set another commercial bank in the country. “I can announce that cabinet has already approved in principle for a new commercial bank to be established and be called The National Banking Corporation”, Minister Duma announced. Minister Duma concluded that under the leadership of our Prime Minister all necessary requirements have been completed and we are now 85 per cent through in reaching that goal, and before the end of next year this country should have a fully fledged commercial bank.


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Following the government's Budget 2023 proposal to hike corporation tax from 30% to 45%, Kina Bank is abandoning all of its plans to grow by opening additional offices nationally. Greg Pawson, the chief executive of Kina, stated that the bank was against any rise in corporate tax on the banking industry. “To put into perspective, it is an additional tax of K40 million for Kina based on our 2023 forecast. That is a 50 per cent increase and K40 million that we will now be forced to not invest in future growth. The additional tax is a disincentive for us to invest and grow,” he said. “The unintended consequences of such a move will be detrimental to the banking sector in Papua New Guinea (PNG) which is already structurally imbalanced,” Pawson added. Pawson also announced the suspension of its small-to-medium business and home loan concession interest rate programs. “We will be forced to reassess our capital expenditure programmes and likely cut investment,” he said. “Crazy stuff and typical of recent policy developments, it will be the average Papua New Guineans who will be impacted.” The first bank to respond adversely to Treasurer Ian Ling-Budget Stuckey's 2023 is Kina. The tax hike is anticipated to cause commercial banks to boost interest rates and fees, making PNG the second-highest tax system in the world. Ling-Stuckey announced the beginning of this tax during a business budget breakfast in Port Moresby. “This is expected to raise K240 million (for the Government) to fund vital core services. We will consult the banking industry in the first half of next year, and consider if a different type of tax, such as an additional profits tax, may be more appropriate from 2024 onwards, while still raising the required revenues,” he said. According to Ling-Stuckey, taxing banks was a good idea. “Government needs to continue to raise revenue. We might introduce some new taxes to the sector (banking), that might in the best place to afford paying tax,” he said.   Reference: Esila, Peter. The National (1 December 2022). “Kina shelves expansion plans”. 

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