THE Papua New Guinea Chamber of Commerce and Industry has welcomed a move by the Teachers Savings and Loans Society (Tisa) to operate as a commercial bank.

TISA CAUTIONED ON BANKING BID 

By DALE LUMA, December 30, 2022, The National Business.

THE Papua New Guinea Chamber of Commerce and Industry has welcomed a move by the Teachers Savings and Loans Society (Tisa) to operate as a commercial bank.

Chamber president Ian Tarutia, however, warned that there would be challenges.

“There are challenges,” he said.

“The recent Government decision to tax banks at 45 per cent and repealing the former dominant market levy of K190 million is an example.

“Kina (Bank) for example has indicated shelving expansion plans since the new 45 per cent tax was announced.

“So yes, this change in tax policy is a disincentive for investment or expansion by existing players.”

“For new players, I am sure this will be taken into account in their planning and cost benefit decision-making.”

Tarutia, the outgoing chief executive officer of Nasfund and chairman of NCSL, told The National that this was taking into consideration that the Government had repealed the dominant market levy and increased the Corporate Income Tax for commercial banks.

“I am sure the Tisa board and management have taken this into account and put in place appropriate mitigating measures,” Tarutia said. “For us at NCSL, we have banking aspirations as well, but we are not in a rush to move ahead just yet.

“We will focus on providing the best ebanking services we can for now under the savings and loan umbrella, and monitor developments in the banking sector under this new tax regime.

“In any case, Tisa’s endeavours are applauded as there is room for more banks to be established in country. We understand that Tisa has been granted a provisional licence, not a full licence.

“This means there are conditions that must be fulfilled first before it is a recognised bank like BSP (Bank South Pacific Financial Group Ltd), Kina, ANZ or Westpac.

“A large segment of our population, especially in rural areas, are in dire need of banking services.

“The opportunity for growing retail banking services is there.”