A second review of the Central Banking Act aimed at creating a robust financial system in Papua New Guinea is underway with position papers accepted from the public before 22nd July, 2022.
This follows successful completion of the Independent Advisory Group (IAG) Phase I review which the NEC approved and subsequent changes to the Central Banking Act 2000 passed in the 2021 November parliament budget sitting.
Minister for Treasury Ian Ling- Stuckey approved on 7th April, 2022 the Terms of Reference (TOR) for Phase II of the AGI’s scope of work.
The IAG comprises of Sir Wilson Kamit, Professor Stephen Howes and Robert Igara as its Chairman.
The main focus for Phase II is on the financial sector which covers banks, finance companies, superannuation funds, insurance companies and money leaders.
This will include review of financial sector regulatory and supervisory arrangements to increase competition and improve access for our people and businesses especially SMEs throughout the nation, and development of PNG’s government bond market to reduce borrowing cost.
“We need to encourage competition, investment, accessibility and growth in our financial sector and use modern technology to increase productivity and efficiency, look at our laws governing our banks and institutions as well as the insurance and superannuation industries and ask whether they are robust enough to support these reforms. We need to look at our Anti- Money Laundering & Counter Terrorism Act and whether it poses a threat to the accessibility of our banking system to famers and businesses. We need to look at whether our central bank has the appropriate legislation to fulfil its function in light of changing technologies and global banking dynamics.” Chairman Robert Igara said.
A statement issued by the IAG said the Phase II TOR cover a range of outstanding Phase I issues, including relating to BPNG’s governance of the financial sector, and a commitment to transparency, dissemination, outreach , consultation and accountability.
“With approval of Phase II TOR, the AIG now plans to undertake consultations with all stakeholders, including stakeholders in Provinces,” the IAG statement read.
The IAG will also be conducting regional awareness on Phase I report findings and the TOR for Phase II with key stakeholders and the media. The purposes of this consultation is to promote awareness and understanding of the critical role and responsibilities of the Central Bank (Bank of PNG), and to enable stakeholders to monitor and engage in economic policy making and implementation discussions in our nation.
The IAG will also have wider consultations with key organizations both public and private to gather their views on the review that is currently being undertaken. This consultative process is critical for this reform agenda for our business sector that plays a vital role in our country’s economy.
“This review covers important aspects of our financial sector that affect every PNG Citizen. I urge all stakeholders to participate in this important reform agenda. “ Mr Igara said.
“On behalf of the Independent Advisory Group, I invite all stakeholders, both institutions and individuals to participate meaningfully in the consultation process including in meetings conveyed by the IAG and through written submissions.” Mr. Igara added.