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20 percent of revenues must benefit Palau communities

KOROR, Palau (Palau Horizon, Aug. 6, 2008) — The Palau Senate last week approved on first reading a proposed measure which will require all foreign financial institutions, foreign banks and foreign branch banks to reinvest 20 percent of all generated revenues in the communities of Palau.

House Bill No. 7-128-7 intends to create a cycle of investment that will spur further economic growth and bank deposits.

The bill has been approved in the HOD and was submitted to the Senate for action.

The current law under the Financial Institution Act of 2001 mandates that the banks extend credit to low-income communities.

The foreign-owned banks that presently operate in Palau are Asia Pacific Commercial Bank, Bank of Guam, Bank of Hawaii, Bank Pacific, First Commercial Bank and Palau Construction Bank.

The bill require that these banks reinvest 20 percent of their gross revenues into the local community and that these investments will help generate local economic development which in turn will lead to greater revenue to the banks and more subsequent local investments.

In addition to the mentioned foreign banks, there are two banks that are also operating in Palau one is the Palauan government owned, National Development Bank of Palau and the First Fidelity Bank, which is privately owned.

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