-Faced with huge profit loss, local business forced to lay off workers in response to BSP’s new 1 percent fee
-Leader of Opposition calls on Central Bank to ‘defend ordinary Solomon Islanders from unjustifiable and excessive bank fee increases’
BY IRWIN ANGIKI
The Central Bank has been called on to step in and ‘defend ordinary Solomon Islanders from unjustifiable and excessive bank fee increases’.
Opposition Leader Matthew Wale’s call follows BSP Bank’s recent decision to impose a 1 percent fee on all cash deposits and withdrawals of $20,000 or more per day, per account, effective June 28, 2025.
A major local business in Honiara has also called out BSP after losing more than $4,000 per day to this new fee last week, not having received prior notification from the bank and not receiving responses from BSP when contacted.
“That’s basically our profits gone,” the owner of the business told Island Sun over the weekend.
The business owner, requesting anonymity, said in their line of business if they mark-up their prices to cover this loss it would have a devastating impact on the country.
“We will start looking at laying off workers.”
The company is seeking legal action against BSP.
Opposition Leader Matthew Wale described the increase as an unreasonable charge that will penalise legitimate economic activity of everyday Solomon Islanders, in a statement last week.
“This is an unjustifiable fee on people simply trying to access or manage their own money. Many Solomon Islanders, particularly those in the villages, those running small businesses, schools, or churches, are forced to operate in cash. This fee punishes them for circumstances they did not choose,” Wale said.
Wale said that such a fee will further affect Solomon Islanders through institutions such as DBSI.
“Many customers of DBSI are ordinary Solomon Islanders who repay their loans in cash. DBSI, who banks with BSP, will then be charged 1% for its deposits. If DBSI deposits 300,000 per day, it will be charged 3,000 per day. It is not hard to imagine how this will then affect DBSI interest rates. CBSI must clamp down on this,” Wale said.
Handling cash is main form of transaction in the Solomon Islands.
Wale explained that the fee ultimately penalises those excluded from digital finance, rather than encouraging digital migration.
“If BSP’s rationale is promoting digital banking, it should be investing in access, education, and incentives, not punishing the very people who are not yet equipped for it,” Wale said.
Wale highlighted that such a fee is unjustifiable when compared to the other financial institutions in the country.
“As a comparison, ANZ charges a flat fee of SBD20 per staff assisted cash transaction, regardless of the amount,” Wale said.
Wale said the decision is made worse by the broader financial context of BSP’s excess liquidity and high lending interest rates.
“We have a banking model that favours the institution, not the people. It is a model of extraction, not service. That is not how a responsible financial system should operate. BSP, as a financial institution, held an excess liquidity of over SBD 1.8 billion across 2023 and 2024, liquidity it could not productively lend. It is already in a strong financial position. And yet, instead of easing the burden on its customers, it has chosen to increase it,” Wale emphasised.
Wale urged CBSI to use its regulatory powers Act to review, and where appropriate, prohibit such unjustified fee structures.
“It is the role of the Central Bank to safeguard the financial integrity of our economy, not only in relation to monetary policy or banking soundness, but in ensuring that the banking system serves the people,” Wale said.
“We need a banking culture that is rooted in fairness. One that facilitates economic participation and contributes to national development. Our people deserve financial institutions that act as partners, not predators. CBSI must ensure this is reflected in its financial regulation,” Wale said.
Meanwhile, the local business owner told Island Sun this is not the first issue of concern they have had with BSP.
“Our board only found out today through our cashier through staff through junior staff at BSP. We’ve had no form of contact from senior management of BSP in writing or by phone, which is a total disgrace.
“We will apply for an injunction to have this overturned.
“The Central Bank needs to get involved.
“We will also make a formal complaint to the Royal Solomon Islands Police Force. Just the way that this is being done is just totally unacceptable.
“This is on the background of recent incidents that we had with BSP, with our personal funds not being transferred correctly, and staff there forgetting and not doing their job, about a formal complaint on their retail manager – no response, and this is on top of those two other issues we had where we had more than $170,000 taken out of our account incorrectly, and my partner also had $20,000 not deposited into her account. They were only rectified it when we raised our complaints.
“This bank is completely out of control. This one percent will severely affect large turnover businesses. People assume you got large turnover you got large profit, but in our business large turnover is a very small margin and it’s price controlled.
“So BSP’s 1 percent fee will have a massive impact on our business, the fee alone that we’ll be paying is in excess of $120,000 per month.”
The Central Bank has not responded to Opposition Leader Wale’s call.
Meanwhile, BSP had issued a one-month notice on the new fee and other changes.
On BSP’s website, a notice published on May 28, 2025, said:
“Effective 28th June 2025, BSP will make changes to various service fees and offerings.
“These changes are to promote digital channels and supports efficient cash management.
“The Fee changes are as follows:
“Special Answer fee from $100 to $400.
“Cheque book (25 leaves) from $27.50 to $30.
“Cheque book (50 leaves) from $55.00 to $60.
“Cheque book (200 leaves) from $180 to $200.
“Manual Transfer Fee from $7.50 to $10.
“Salary Listing Per Item (BSP) from $2 to $3.
“Salary Listing Per Item (Other Bank) from $5 to $7.
“Diskpay from $3 to $2.
“Cash Handling fee – 1% for deposits and withdrawals of SBD$20,000 or more.”
On BSP’s website, a pinned notice also reads:
“Dear Customers, we remain committed to improving your banking experience. From 1st July, an email notification will be sent to selected customers, through our survey partners Klein Research to understand how we can better serve your needs. Please take a few minutes to provide your feedback.”
For feedback, contact:[email protected]