Photo credit: Peoples Micro Bank
According to State Enterprises Minister William Duma, the Government has allowed the Peoples Micro Bank Limited to become a full-fledged commercial bank.
“This means the bank and Kumul Consolidated Holdings (KCH) can now implement venture into retail banking and commercialisation of its operations,” he said.
“The commercialisation will result in the creation of a new commercial bank, to be known as the National Banking Corporation of PNG Limited or NBC.
“There is a need for more commercial banks in Papua New Guinea (PNG) to raise competition in the retail banking sector and to service our people.
“This will encourage improved and affordable banking services since an estimated 80 per cent of the population still do not use any banking facility,” he added.
The commercialization process, according to Duma, might take up to two years, and a K96 million fund has been put aside to assist in the development of "something valuable for the nation."
The Treasury and National Planning Departments will cover the costs. He explained that the Bank of PNG's approval for the NBC license requires the completion of several due diligence and licensing criteria set out in the legislation governing commercial bank activities.
“To kick start the transformation, KCH and the National Development Bank (NDB) will provide commercial support through its advisory team to implement and execute the commercialisation and National Planning Department’s SOE reform programme.
“After a successful application for a banking licence, NDB will transfer its various branches to the bank to give NBC the reach to provide banking and financial services for rural Papua New Guineans.
“The Government recognises that due to the scaling down of operations by Westpac Bank and the ANZ Bank, the Papua New Guineans have not been able to receive efficient and competitive banking services.
“The proposed commercialization is planned to extend over two years to 2023 with phase one focused on the recruitment of key executives, critical upgrades to core banking system assets, property and buildings.
“Phase 2 will commence later this year.” Duma said the bank would provide 131 new jobs within the first five years, and more than 100 jobs over the following five years.
“The strategy is to negotiate with prospective joint venture partners within three to five years after obtaining a banking licence, to enable the bank to sell down a minimum 51 per cent of the bank to attract the right partners to develop and upskill the bank.
“In the longer term, we envisage new shares to be issued to allow citizens and institutional shareholders to invest and become shareholders in the new bank.”
Reference: The National (9 May 2022). “Government approves new bank”.
