A New Bank for Solomon Islands by March 2014

Rick Hou. Photo. Solomon Star
SOLOMON Islands will soon have another bank operating in the country as early as March next year – 2014.

This came after the Central Bank of Solomon Islands (CBSI) announced yesterday that it has granted an interim banking license to Pan Oceanic Bank Limited (POB) from Sri Lanka last month.

CBSI in a statement yesterday to confirm the announcement said the interim license was granted on the 5th September 2013.

“This license is to carry out banking business in Solomon Islands.”

The granting of the license meant this bank would be the fourth to operate in the country providing financial services once full approval is given.

“POB is a domestically incorporated financial institution and will be the fourth commercial bank to offer banking services to the public in Solomon Islands by 2014.”

CBSI explained that under the conditions of an interim license, POB is not allowed to provide any banking business to the public in Solomon Islands until it meets certain conditions as set out in interim license, before the full banking license is granted to the bank.

CBSI said that it is so far pleased with the progress POB is making towards meeting these conditions under the interim license.

The Solomon Star understands the granting of the new bank was made possible following the passing of the Financial Institutions (Amendment) Bill 2013 in Parliament, July this year which was brought by the minister of finance and treasury Rick Hou.

The Bill permits CBSI to issue an interim license to any orgnisation who wish to carry out limited banking service.

Under the new Bill an applicant can carry out limited banking service for a period of 6- 12 months while the Central Bank considers their application under the Act.

Minister Hou told Parliament at that time, under the current legislation, once an application for a banking license is received, the Central Bank must consider a range of factors.

The Central Bank also considers governance and prudential arrangements around the proposed banking business.

He stressed once these factors are considered, a full license is either granted or rejected.

Minister Hou during his speech in Parliament said this Bill should provide better opportunity to those of our entrepreneurs who are keen to invest in banking business.

In a statement last night following the announcement by Central Bank, the management of the bank is set to begin its operational setup soon with the aim of creating a new era for banking with good governance and a sustainable front in the island nation.

The statement said the management of the bank has put in place all the necessary structures to open its doors to Solomon Islanders from March 2014.

“Solomon Islands is urgently in need of a financial institution that takes the shape of a development bank and with the operational capabilities of a commercial bank - a bank with the ambition to “perform a pivotal role in enhancing the economic growth of Solomon Islands,” said Nihal Kekulawala the nominated chief executive officer (CEO) of the newly licensed commercial bank of Solomon Islands. 

Pan Oceanic Bank is supported by DFCC BANK a specialised bank in Sri Lanka which is facilitating the establishment of Correspondent Banking relationships and through its subsidiary Synapsys Limited facilitating the sale of Software Licensing for an ICT Platform for the bank.

“POB will service all sectors and business operations because the bank’s very own design is focused around Solomon Islands dynamics and future expectations. We are purely driven by the overall needs of Solomon Islands and at no time will be deviating to cater external pressures” he added.     

Mr Kekulawala said “Pan Oceanic bank   promises to change the way banking is done when it formally begins operations”.

According to the CEO, the bank is poised to make a difference by introducing all level of banking services and other financial facilities for the benefit of Solomon Islands.

Financial institutions that are operating within a country’s economic system play a pivotal role in executing these ambitions.

“The basic reasoning behind these requirements are that the economy of the country is as good as its operating financial institutions,” Mr Kekulawala added.

“The Pan Oceanic Bank is underpinned by a determination to ‘unlock’ Solomon Islands’ economic potential and developed with strong risk frameworks to ensure good governance and attain above-line profitability from its initiation.

“Any country that is thriving to unlock its economic potential requires the support of an imbedded financial system that can carry the growth of the country forward and a system that is ready and willing to venture out to support upcoming sectors of the country,” he said.

With the target date set, the consultancy team of Global Management Consultants Ltd. (GMC) (http://www.globalmc.lk/) in Colombo Sri Lanka is working tirelessly to procure all required systems and establish the processes that are required to make a good start.

The statement said GMC is a specialized consultancy firm formed to cater to the pacific region. It is an associate company of EML Consultants Ltd and Development Concepts Ltd, Sri Lanka which are working on development projects across Asia.

“GMC, through these associate companies, has the capability to provide innovative solutions and alternatives to many developing countries and development sectors such as banking and finance, infrastructure, water and sanitation, tourism, fisheries, mining and environmental management that are highly relevant to the pacific region.

“Stamped with a sustainable competitive advantage through local insights, POB has been strengthened by a wealth of industry experience and supported by a global network of banking and finance professionals to ensure profitability and a strong balance sheet.”

Mr Jayaraj Chandrasekera, a director of GMC who was instrumental in developing POB to this stage said, “Solomon Islands has written a new chapter in its development towards economic sustainability with the addition of this bank to its financial systems.”

The bank’s statement further highlighted the Pan Oceanic Bank will be supported by one of the state of the art core banking platforms, the MBanx system which has the capability to take on any large bank operating platforms.

“The MBanx system will not only empower POB to efficiently deliver all levels of commercial banking services, but also help to develop the bank into a mainstream bank with the capability to deliver multi-branch propositions to Solomon Islands with services such as mobile banking and fully-fledged agency models, eventually servicing the whole of Solomon Islands with its very own bank.”

The consultancy team of Global Management Consultants Ltd. (GMC) in Colombo, Sri Lanka has worked for nearly 12 months to develop the new commercial bank in to the licensing stage.

“All developed countries in the world continuously receive the support of financial institutions that have been working towards the economic development and visionary thinkers to further develop sectors to diversify the distribution of sectarian contribution to the national Gross Domestic Product of a specific country,” explained Mr. Avanthi Jayathilake, a director of GMC.

“Usually an establishment of a bank takes nearly 12 months. This extends to operating systems, international banking relationships, finalising policies and procedures and recruitment of the right team to ensure the smooth operation of a bank.

“Even with all these efforts been concentrated, a commercial banking operation will still have initial operational issues for six to twelve months. This is very normal and it is up to the management of the bank, with the support of the in-country telecommunication providers, to get it right eventually,” said Mr Jayathilake.

He said:   “We are confidently trying to cut short this lengthy process with the association of DFCC Bank.

“POB has been strengthened by a wealth of industry experience and supported by a global network of banking and finance professionals to ensure profitability and a strong balance sheet,” he said adding that the bank, when in operation, will be a “world class” Solomon Islander committed to economic, social and environmental sustainability and the strength of the nation.

Explaining POB’s sustainable value proposition Mr Chandrasekera said that the bank will focus on strengthening the country’s economic development with a business model specifically designed for the country.

“It will demonstrate high professional and ethical standards and commit to continuously develop the skills and knowledge of the staff to meet the highest professional standards. While according priority to valued customers, both local and foreign, POB will endeavour to service customers so they consider POB the most valued bank in the Pacific region.” 

He noted that the bank will work with the CBSI and abide by the operating guidelines and regulations of the country and ensure that it always adopt international best practices in terms of governance and risk management.

“The POB will always engage in ethical business sectors and ensure our business is well managed and sustainable giving the highest return to investors and best value for our customers,” he added.

POB in the statement last night said it will especially focus on favourably participating at projects and initiatives that will help increase the natural capital of Solomon Islands.

“It is formed on the foundation that the natural resources of a country is part of it’s heritage and should be used in a sustainable manner for the best benefit of current and future generations of Solomon Islands whilst skillfully utilising them to develop economic benefit for the country.

“Hence, Pan Oceanic Bank will be looking favourably to support the efforts of the Government of Solomon Islands to solicit funds for its long term sustainable projects in development of various sectors, such as the financial sector, commodities, mining, water supply, sanitation, fisheries, tourism and forestry.”

The Bank added it strongly believes the management and the use of natural resource capital of Solomon Islands should be according to the priorities set by its national leaders and will take every step to be guided by the country’s  sustainable development agenda whilst promoting world’s best practices for the areas specified to ensure further growth and good governance.

“Solomon Islands is a small Island nation that require rapid economic growth to ensure it captures and delivers on the vast diversified asset base the country possesses. For that reason Pan Oceanic Bank will facilitate sound economic interaction between people, resource owners, commercial sector, government and the investors of Solomon Islands.”

By Moffat Mamu | Solomon Star 

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