WESTPAC bank has issued logging companies a 45-day notice to withdraw their bonds with them and deposited the money elsewhere.
This latest policy move took loggers by surprise and forced the government to act promptly since this is a very sticky economic matter needing urgent attention.
This will mean all logging companies will have to halt their operations and the government will lose millions of dollar in revenue.
Westpac general manager Kutila Pinto said it is the bank’s internal strategy to make changes that will help diversify its operations and strengthen the growth of the country’s economy and move the bank forward.
Mr Pinto said this is a measure taken to balance and manage its loans and move forward to empower its operations.
When asked if this was associated with recent media scrutiny of the bank’s lending to loggers doing illegal operations, Mr Pinto said the decision has nothing to do with or is influenced by anyone’s writing.
“It all goes back to the internal strategy of the bank to move into other sectors and areas it sees fit to move the bank and the country forward,” he insisted.
He added the bank has a long history since its establishment in Australia and in the country therefore, nothing could have influenced their decision making on this strategic change.
It is understood more than 50 logging companies currently operating in the country will be affected by this new policy twist.
Therefore, since no commercial bank is willing to hold these logging companies’ bonds, they will have to halt their operations as it was stated under the laws of this country.
To meet a logging requirement, loggers have to deposit a bond fee of $250,000 to be held in trust with any commercial bank before they can operate.
Westpac was the only bank here that holds in trust, bonds of these loggers. Now that it will no longer be holding any more bonds, the logging companies will have to close down their operations.
This has brought about fears and worry to these logging companies as well as the government who will be losing millions of dollars in revenue from logging.
But the Solomon Star understands a gazette the government produced on September 6 (last month) could possibly allow the Central Bank to hold in trust these bonds on behave of the Ministry of Forest.
However, it is yet to be gazetted to allow the Central Bank to hold in trust these loggers’ bonds.
Permanent Secretary of the Ministry of Forest Jeffery Wickham said final instructions into the gazette paper of 6 September 2012 has just been submitted last Friday and he is yet to know about this.
The Governor of CBSI could not be reached for comments since he is still overseas.
An officer spoken to say he is not aware of the gazette but said anything of such will have to be discussed with the bank’s management and board.
Mr Pinto said they have already instructed the Prime Minister and other relevant authorities about his bank’s decision.
By Daniel Namosuia
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