Speech by Mr. Loi M Bakani, CMG GovernorBank of Papua New Guinea at the Occasion of NASFUND Contributors Savings & Loan Society Rebranding Launch

Speech by

Mr. Loi M Bakani, CMG

Governor Bank of Papua New Guinea
at the
Occasion of

NASFUND Contributors Savings & Loan Society
Rebranding Launch

At the Lamana Hotel;
Friday, 24th July 2020

1. Acknowledgements

Mr. Ian Tarutia, OBE – Chairman of NCSL / CEO of NASFUND
NCSL Board of Directors
Mr. Vari Lahui – Chief Executive Officer, NCSL
Mr. Charles Vee – Chairman of NASFUND
VIPs and Invited Guests
Ladies & Gentlemen

2. Introduction & Purpose of the Event

I am pleased to be here with you this evening to witness the rebranding of the NASFUND Contributors Savings & Loan Society.

Let’s not forget that only last year (2019) we reformed the Savings & Loan Societies Industry, from an old Act of 1995 to the Savings & Loan Societies Act 2015. The reform provided for the registration elements of Societies to come under the Companies Act 1997 – which means I am no longer the Registrar of Savings & Loan Societies. That role has now gone to the Registrar of Companies. And as Governor, my role is as a Prudential Regulator of all Savings & Loan Societies in the country (Papua New Guinea). The reform also opens up Societies to shift from compliance-based operations to market oriented organizations.

3. Rebranding an organization is Essential after the S&L Societies Reform?

While I may not want to preempt the intentions of the NCSL board and management in the rebranding of NCSL, let me say that the objective of rebranding is appropriate given the process of reform which the S&L Societies went through from a very compliance based regulatory framework to a more prudentially and market based Societies.

The reform is necessary to revitalize Societies and ensure strong corporate governance culture, performance and member or customer relevance in in terms of the products and services Societies offer.

I am pleased to see that NCSL is moving in the right direction, in order to refocus its Vision, modernize its operations, and to provide relevance to its membership and to other potential members.

4. Financial Technology and Digital Financial Services as Key Drivers For Growth

I understand the Vision of NCSL is “To be the best e-bank in Papua New Guinea”

The NCSL vision statement is very appropriate in this time and age and for Papua New Guinea – this is the area which I would like to cover in the remainder of my speech tonight.

The PNG VISION 2050 envisions increased communication access from 10% to 100%;

Establishment of a communications satellite network for Papua New Guinea
Establishment of a National Information Database Management System.

The Medium Term Development Strategy 2010-2030 and MTDP III (2018-2022) envision PNG to be a middle-income country by 2030.

a modern and affordable information and communications technology system that reaches all parts of the country,
800 mobile subscribers per 1,000 people by 2030,
70% of the population have access to or use the internet 2030; and,
100% of Papua New Guineans must have access to radio and television by 2030.

Also successive Governments have recognized ICT as a key enabler for development of PNG, with objectives to see:

completion of the national fibre-optic cable infrastructure rolled out to all parts of PNG,
delivering e-commerce, e-health, e-agriculture and e-government.

5. Role of BPNG building the infrastructure and conducive Eco System

Consistent with the above Strategies, the Bank of Papua New Guinea (the Bank) continues to progress the process of modernization and improvement in PNG’s National and International Payments System. The Bank is mandated under the Central Banking Act 2000 to ensure this takes place.

As such, I wish to highlight some of the important investments which the Bank continues to implement to progress the work on improving the Digital Finance ecosystem in PNG:

a. Retail Electronic Payments System (REPS) – The Bank has implemented Kina Automated Transfer System (KATS) for real time gross settlement payments for first tier financial institutions or commercial banks in October 2013. In July 2019

the Bank launched the Retail Electronic Payments System (REPS), which is an inter-operable system that links all commercial banks with other licensed financial institutions, micro banks and savings and loan societies and potentially non-bank financial institutions. This is to ensure interoperability between all providers of Digital Financial Services and the REPS provides a platform for innovations including all forms of mobile phone-based solutions and QR payments. Nasfund Contributors Savings and Loans Society (NCSL), Bank of South Pacific (BSP), Kina Bank, Westpac Bank, Nationwide Microbank Limited (MiBank) and People’s Microbank Limited (PMBL) have join already and we are looking forward to have the rest of the other financial institutions, non-bank institutions and mobile network operators to join the platform soon.

b. KYC Utility Project & Collaboration with YuTu Project –

The Bank is working with the other 8 Central Banks (including RBA, RBNZ, RBF, RBV, CBS, CBSI, CBTL and NRBT with IMF as the Secretariat) to have in place a KYC Utility, that complies with requirements of FATF and other international standards-setting bodies. Based on this work the Bank and YuTru are collaborating on an exercise to establish a database for the establishment of the Utility. YuTru has established a Digital Identification Bureau Limited as a partnership company for all financial institutions, non-bank institutions and possible mobile network operators as a body which can work with BPNG and CEFI to promote the development of an identification system. This is essential for financial inclusion for ease of banking and to access banking, superannuation, insurance and other payments benefits.

c. Regulatory Sand Box approach

-The Bank established a regulatory sandbox, a framework set to allow emerging technologies and fintech startups to accommodate and spur fintech innovations focusing on financial inclusion. This was officially launched on 5th December 2019. Sandbox is a “place” where innovators can test their (typically technology-based) solutions using real
customers and real data in a safe and controlled environment without fear of breaching any of the very strict and necessary regulations that are in place to protect the financial services sector and the PNG economy.

6. Conclusion

In conclusion, it is important to reinforce the need to rebrand to stay modernised in order to remain relevant in this constantly changing age of technology.

I wish to Congratulate NCSL board and management for taking such a progressive approach to provide relevance and value its growing members, as evidence in the rebranding of NASFUND Contributors Savings & Loan Society.

Thank you.

Loi M Bakani, CMG
Bank of Papua New Guinea