PNG RURAL DEVELOPMENT BANK GOES BUST

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PORT MORESBY, Papua New Guinea (PNG Post-Courier, May 3) – Papua New Guinea’s Rural Development Bank has no money to pay its staff.

It needs up to K1 million (US$309,000) to pay staff wages alone and other operational costs.

The bank has approached the Independent Public Business Corporation to borrow the money but the IPBC has rejected the appeal.

RDB managing director Andrew Nagari said the bank did not want to borrow the money but the Government had ordered the IPBC to give it the loan.

Sources said yesterday the IPBC was reluctant to hand over the money as certain politicians would not hand control of the RDB to the Independent Public Business Corporation and wanted the bank to operate on its own.

Mr Nagari said early this year that the bank needed up to K10 million (US$3 million) to fully implement the National Government’s policy on an export-led economic recovery program.

Both the Prime Minister Sir Michael Somare and his deputy Moses Maladina, who is also Minister For Agriculture and Livestock, had pledged their support to ensure that RDB got that money.

They did not outline the source of such funding to support the bank.

Mr Maladina had written to Finance and Treasury Minister Bart Philemon asking him to allocate

K10 million to the RDB.

Mr Nagari said then that the Government would get money for the RDB both directly from the Department of Treasury and indirectly from its agencies such as the Coffee Industry Corporation, the National Fisheries Authority and the Independent Public Business Corporation.

It is believed the IPBC wants the bank under its control before it can finance it.

There have also been calls for the bank to be given a commercial bankers’ trading license to serve the farmers effectively, as commercial banks make it difficult for ordinary farmers to borrow money to expand their plantations.

May 3, 2004

Papua New Guinea Post-Courier: www.postcourier.com.pg/

 

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