THE Central of Bank of Solomon Islands (CBSI) Board has rejected a banking license to the fifth applicant.
Governor Denton Rarawa made the announcement following rumours the regulator rejected to issue a banking license to the latest applicant.
“You might be aware that CBSI has rejected an application for a banking license. I want to confirm that the Board has rejected that application based on the strength of the shareholders,” Rarawa said.
The Governor said the Board has assessed the application and have decided to reject the it, since the strength of the shareholders could not support the application.
Rarawa said the decision to reject the banking license application does not mean CBSI do not want competition in the banking sector.
However, he said it is important that as the regulator of the banking sector in the country, it is of paramount importance to ensure that applicants for a banking license must meet stringent criteria set in place, otherwise a banking license cannot be issued.
Rarawa said the banking market can accommodate two more banks, but cautioned that allowing more competition in a small economy like that of this country might affect banks’ operation which might result in some closing, due to lack of making profits.
He said although competition might be seen as a good thing for customers, it is also important to ensure that the players in the industry continue to contribute to the economic activities and development of this country.
By DANIEL NAMOSUAIA