Plan hatched for new money law

By MARK HAIHUIE
A TRANSITION plan has been agreed upon by commercial banks and the Finance Department for the implementation of the Public Money Management and Regularisation Act (PMMRA).
The Act requires funds held with State agencies in multiple accounts to be transferred into accounts under the control of theGovernment through Finance and Treasury.
Bank South Pacific chief executive Robin Fleming said the plan is aimed at reducing the impact of the Act on the bank’s liquidity and overall monetary policy.
“The Department of Finance has undertaken significant dialogue with our Paramount Banking team in relation to putting into operation the provisions of the PMMRA,” he said.
“This has included opening a large number of accounts to meet the provisions of the Act, as they relate to signing authorities for the accounts.”
Fleming said the plan would require dialogue with respective State agencies with which the accounts were under, but that was a matter for the Dewpartment of Finance.
“Department of Finance, Treasury and Bank of PNG have been conscious of the need to ensure that the monetary system is not disrupted by any large movement of funds from commercial banks to consolidated revenue,” he said.
“There has been agreement of transition arrangements initially.
“That allows for more control of funds by Department of Finance without impacting on either commercial bank liquidity management or the Bank of PNG’s monetary policy.”
Treasury Secretary Dairi Vele said last week that so far about K750 million had been identified that would be affected by teh Act.
“The first part is to quantify how much money is actually out there,” he said.
“Then we will have to work out the best way to access that money without bringing unintended adverse consequences to the financial markets.”