Speech by Ms. Elizabeth Genia AAICD, Governor on the Presentation of Banking Licences to TISA Bank Limited and Credit Bank PNG Limited on 5 August 2024.

Speech by Ms. Elizabeth Genia AAICD, Governor
on the Presentation of Banking Licences to
TISA Bank Limited and Credit Bank PNG Limited
on 5 August 2024.

Good morning.

Today we are here to make history.

Today we welcome two new commercial banks into the Papua New Guinea financial system.

Today is the first time that more than one banking license has been issued on the same day.

I am delighted to welcome Chairman Dr Albert Mellam, Board Director Lady Winifred Kamit, Richard Sinamou, Sir Melchior Togolo and Acting CEO Lynda Kahari of CreditBank Bank Limited and Chairman Moses Koiri, Board Director Faye-Zina Lalo, Michale Koisen Group CEO TISA, Sunhil Pokharel CEO TISA and distinguished guests, my colleagues from the Bank of Papua New Guinea, ladies and gentlemen.

I acknowledge the Motu and Koitabu people as the traditional owners of Port Moresby, where we gather today. We pay respect to Elders, past and present.

Teachers Savings and Loan Society Limited, TISA, and Credit Corporation (PNG) Limited, Credit Corp, have both successfully demonstrated that they meet the high standards required to operate a commercial bank in PNG.

It is my great pleasure to confirm that the Bank of Papua New Guinea has issued each with a commercial banking license.

Our hearty congratulations to PNG’s new commercial banks, TISA Bank Limited and CreditBank PNG Limited.

In what is BPNG’s 50^th anniversary year, it is very fitting for us to welcome two new commercial banks to start their own journey into the future.

As many of you are aware, BPNG has a mandate to foster sustainable economic growth in PNG. There are many aspects to achieving that objective, including ensuring we have a strong and vigorous financial system.

For the financial system to be strong and vigorous we need more service providers who are equipped to supply real competition. We welcome reputable new entrants into the commercial banking market and in fact, BPNG has actively provided guidance and support for intending applicants.

As you would know, over recent years the commercial banking sector in PNG has been contracting. Overseas banks have closed their operations here or have changed their business strategies. The result has been a reduction in the number of retail banking service providers, and a corresponding concentration of market share, which presents a potential risk to the financial system.

However, with TISA Bank and CreditBank PNG now fully licensed to operate as commercial banks, that situation is set to turn around and the benefits of stronger competition in the sector will become realised.

With more providers competing for customers, we are likely to see enhanced consumer benefits, such as a greater choice of products and services, innovative challenge-solving, and the prospect of more favourable fee structures.

Then there are the other benefits to the broader PNG economy that new providers can contribute. By creating jobs. By promoting financial inclusion. By supporting local SMEs and MSMEs. By fostering innovation.

BPNG does encourage new entrants to the banking sector and the broader financial services market.

However, as the industry supervisor and regulator, we have a very clear responsibility to make sure that the organisations who wish to enter this nation-critical industry sector meet strict requirements designed to protect consumers as well as the PNG financial system.

A banking license is not issued unless the applicant has met all the requirements of the rigorous evaluation process conducted by BPNG’s specialists.

In the cases of CreditBank PNG and TISA Bank, the process involved two years of working to make sure their governance and organisational structures, their risk management arrangements, their financial health, their systems, policies and procedures were all of the high standard required to attain the commercial banking licence.

In meeting these standards, both TISA Bank Ltd and CreditBank PNG demonstrated robust business plans, strong financial standing, and clear commitments to providing high standards of customer service. 

Attaining the license is just the start of an ongoing process.

To retain their banking licences, all commercial banks in PNG are required to comply on an ongoing basis with the Banks and Financial Institutions Act 2000, and a comprehensive suite of regulations, directives and prudential standards issued by BPNG from time to time.

BPNG will continue to provide support and guidance to both TISA Bank and CreditBank PNG through our supervisory and regulatory oversight program, as we do with all commercial banks.

As I come to the close of my remarks, I would like to emphasise the importance BPNG places on collaboration, cooperation and communication in our role as supervisor and regulator.

We do encourage open channels of communication. From time to time we canvass industry opinion to draw a more comprehensive picture of future development challenges and opportunities. I look forward to hearing in the future that both TISA Bank and CreditBank PNG are involved in these industry collaborations.

In the meantime, on behalf of the Board, Management and Staff of the Bank of Papua New Guinea, I sincerely congratulate TISA Bank and CreditBank PNG on attaining your commercial bank licenses and for being an important part of PNG financial history.

Thank you.