By Gary Hatigeva
THE four Commercial Banks operating under the banking regulations and laws of Solomon Islands are due to appear before the Bills and Legislation Committee (BLC) today, to present their cases on the Payment System Bill 2018.
They are the Bank South Pacific (BSP), the Pan Oceanic Bank (POB), ANZ Bank, and the newly established, Bred Bank.
Early this week the Committee together with representatives from the Ministry of Finance and Treasury, Central Bank of Solomon Islands accompanied by the government’s legal drafts person, Catriona Steele, thoroughly went through the general principles of the Bill and later covered the in-depth aspects of it, clause by clause.
As key implementations and subject matters of the proposed amendments in the payment system provision of the CBSI Act 2012, representatives of each institutes are expected to present their case in terms of how they view the bill and how it will affect their operations, both positive and negatively.
Currently, these banks operate on a manual transactional interaction system, which is deemed inefficient and vulnerable, and the bill is looking to provide mechanisms and regulations to improve all that.
In Solomon Islands, there is no payments system in place to facilitate electronic funds transfers between banks or between customers of different banks, instead, all payments are made with cheques, which is totally manual and time consuming.
The bill provides the legal framework for the implementation and use of an electronic payment system and securities settlement system that would allow a safer, and a more efficient settlement process, reducing systematic risks, avoiding human errors.
It also delays the typical manual processing, and intends to speed up the availability of funds for beneficiaries of payments between the commercial banks.
The electronic payment system looks to effectively allow banking institutes and agents to communicate with each other, electronically transferring amounts when people pay for goods and services.
The four commercial banks were also part of the collaborative review and consultations involved that led to the formulation of this Bill, and are therefore expected to give views as part of the implementing partners of the proposed amendments to the provision of the CBSI Act.
The Committee inquiry into the Payment System Bill was adjourned after a thorough inquiry into it clause by clause, and continues this morning, with hopes for all committee proceedings to end today, so more time can be bought for the reports of all the remaining Bills before parliament resumes in less than two weeks’ time.
Yesterday, the bills committee completed all its enquiries into the Development Bank of Solomon Islands Bill 2018, capturing the views of all commercial banks who are bound to appear again for the payment system bill.