By EDDIE OSIFELO
MINISTER of Finance and Treasury, Harry Kuma has highlighted the three guiding principles behind the revitalization of the Development Bank of Solomon Islands (DBSI).
Speaking at the launching of the bank at Anthony Saru building, Point Cruz on Monday, Kuma said first and central on the policy development towards the revitalization of DBSI is ensuring that the problem experienced by the previous operation of DBSI must not be repeated.
He said high on this guiding principle is the reform of the old DBSI legislation.
“This is to ensure that issues surrounding the governance of the bank are addressed, and to give a clear order of priorities to encompass the operation of the Bank,” he said.
Kuma said the second guiding principle explains how DBSI will succeed in the market place by filling the areas that are not being serviced by existing commercial financial institutions.
He said this guiding principle clearly articulate two complimentary business model that DBSI will introduce in the market.
“The first stream of DBSI business model will focus on commercial Development Banking, and the second stream focuses on the full range of rural banking services,” he said.
“I wish to also make it clear that although DBSI is a State Owned Development Bank, Government expects it to operate in a commercially viable manner and will not subsidise any of its normal activities unless it is a government directed initiative.
“As to do this (to provide subsidies) would reduce consumer choices available to all Solomon Islanders,” he said.
Kuma said the Government wants increase access to financial services and increase the amount of innovation occurring in target markets.
He said the underlying policy objective of DBSI is that it will help to bridge the unattended gap.
Thirdly, Kuma said it is essential that measures are put in place to create the right environment for DBSI and as well as other commercial banks to take hold, as this will be critical in making all banks sustainable on a long-term basis.
He said financial institutions in particular need good regulatory and legal infrastructure to work effectively.
“Am pleased to announce a package of financial reforms to accompany the opening of DBSI and to ensure financial sustainability of all banks is the commitment of the Government to progress.
“This will include critical financial services reform such as the Credit Union Reform, NPF Legislative Reform, Insurance Act Reform, Financial Services Act Reform and the National Payment System Reform.,” he said.
Kuma said these reforms are critical to the long term financial operation of the banking sector including DBSI.