Maru calls for BPNG review

Business

THERE is a need to review the Central Bank of PNG (BPNG) so they report to a body of government because they currently operate independently, Parliament was told.
National Planning Minister Richard Maru said the bank also needed to establish a credit corporation to help grow the small and medium enterprises (SMEs) in the country as stipulated in government policy.
Speaking during debate in Parliament, Maru said Cabinet last November approved the Bank of PNG to set up a credit guarantee corporation for the State.
It would be owned by the Central Bank and hopefully other banks and the institution would be managed by the Central Bank under its laws.
“Up to now, the Central Bank has not moved the agenda,” he said.
“Without our people being given guarantees to secure loans to start or grow their business, I’m telling you, we cannot grow the SME sector.
“Where will they get the loan because the bank will ask for security, like a mortgage.”
Maru said in comparison to a country in the Southeast Asia like Malaysia which gave an eight million Ringgit (K6.4mil) guarantee for its small business start-ups and this was the biggest reason why their SME sector had grown,” he said.
“Their citizens were able to secure a guarantee from their credit guarantee corporation and they secured loans to start or grow their businesses.
“This is the biggest weakness in our SME sector growth in this country.
“We have no source for providing guarantees for Papua New Guineans to get loans.
“We approved it last November and up to now the Bank of PNG is still sleeping.”
Maru criticised the Bank of PNG management for its lack of action.
“BPNG does not account to anyone, they have the power in themselves under the current legislative regime and yet when they preside over the supervisions of the financial sector including savings and loans societies, they are very strict on corporate governance and yet they themselves do not have corporate governance and that’s weak,” he said.
Maru said when he was acting Finance Minister he had enquired when the Central Bank would pay their dividends to the State.
“I told them we need their dividends, they said on June or July when the board had its meeting. Because they don’t report to anyone,” he said.
“Why not complete audits in March and pay us the dividends to pay for our district services improvement funds and so on?
“I think the time has come for the treasurer and our government to review the current BPNG legislations.
“Why should they have strict corporate governance systems for everybody else and they do not have such regimes and they do not report to anyone and I want to suggest to this House that now is the time to review the Bank of Papua New Guinea legislation.”

Leave a Reply