Bank South Pacific closes two branches

PNG Post-Courier

PORT MORESBY, Papua New Guinea (Aug. 5, 2008) - The state of banking in Papua New Guinea appears to be heading down a dangerous road.

The peoples bank, Bank South Pacific, has taken out large advertisements to advise its customers that it has had to close two branches until further notice. It also foreshadows that up to three more branches may have to be closed temporarily and that payments to some landowner groups may be put off.

All of these drastic measures relate to actual and anticipated threats of armed holdups on bank branches again. The two branches that closed as of last Friday, Kainantu and Vanimo, are not insignificant commercial centers. Both have major commerce and industry in the vicinity and the closures will be a severe blow to these places.

Already, the people of Gulf Province are reeling from the prolonged closure of their only bank, at Kerema Town, following the first of the shock robberies.

The Kerema and Madang holdups were attributed to the same people and various allegations have been made as to the possible involvement of "masterminds’’ and "financiers’’ coming from business and political circles.

Madang branch has re-opened but the Kerema branch remains shut despite attempts by local leaders to get the bank management to have the branch restarted. This is a major challenge to the bank and to the rights of investors to run their businesses free of the fear of armed assault on staff members and customers.

The Royal Papua New Guinea Constabulary has made startling progress with a rash of arrests and seizure of goods reportedly part of the robberies. No concrete sign has emerged so far to justify the claims of powerfully entrenched masterminds, however. Allegations abound, but not formal proof.

In the meantime, the Bank South Pacific, one of the mainstays of the PNG economy, is reeling from the threat of continued robberies and is attempting to protect staff and assets.

It is a difficult time for the bank management and board. With signs of desperate criminals working with inside knowledge and protection from rogue cops, they are entitled to take extraordinary measures.

However it opens up an exceptional dilemma for the Government. This approach, to shut down major banking avenues for the people, could have a snowballing effect on confidence in the commercial sector overall. It will also make life difficult in Kainantu and Vanimo.

We await the next moves with great concern. As do the customers, many of whom have no alternative.

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