Bred Bank (Vanuatu) Limited was granted an interim licence, Monday, by the Central Bank of Solomon Islands.
The licence allows Bred Bank to establish its banking infrastructures and equipment and open for business within the 12 months interim period.
Bred (Vanuatu) Limited is part of the second largest banking group in France, ‘Banque Populaire’, which also has outlets in New Caledonia, Tahiti and Fiji.
So we have a bank here that is not new to the Pacific.
The entry of this new bank is welcomed news.
It means the public now has another choice when it comes to saving or borrowing money.
It also means competition in the banking sector.
Banks will now have to raise their standard of service if they are to keep the loyalty of their customers.
They may also have to relook at their current interest rates and other charges – some of which are considered to be highly excessive.
For instance, existing banks currently charge interest rates on loans between 11 and 18 per cent.
Interest rates for savings accounts, on the other hand, attracted between 0.1 per cent and 5 per cent.
This huge gap was long considered unfair but the public could do very little about it.
The arrival of Pan Oceanic Banking (POB) in 2014 saw intense competition in the banking sector.
POB introduced interest rates that are lower than what Bank South Pacific (BSP) and ANZ Bank have been charging over the years.
Competition is a good thing. It ensures quality of service when it comes to the delivery of goods.
At the end of the day, it is the customer who will benefit most.
This is why the entry of Bred Bank is welcomed news.
Understandably, the banks are in the business of making money.
This is why they are here.
There’s however, one thing Solomon Islanders ask of the banks.
Lower your lending rates and lift your savings interests.
All they want is a bit of fairness here.
Let’s hope the entry of Bred Bank will bring a new level of competition into the banking sector.