This was revealed by the Minister of Finance and Treasury Harry Kuma in his opening remarks at the official opening of the much-awaited DBSI yesterday.
He also highlighted some of the key guiding principles which form the policy structure that guides the preparatory work towards the revitalisation of the bank.
“First and central to the policy development towards the revitalisation of DBSI is to learn from the failures of the former DBSI and to ensure that the mistakes experienced then were not repeated,” he reiterated.
On this guiding principle, the reform of the old DBSI legislation is done.
This is to ensure that issues surrounding the governance of the bank are addressed and to give a clear order of priority to encompass the operation of the bank, he expressed.
He further added that the second guiding principle explains how DBSI will succeed in the market place by filling the areas that have not been serviced by existing commercial financial institutions.
He said this guiding principle clearly articulates two complementary business models that DBSI will introduce in the market.
“I wish to make it clear that although DBSI is a state-owned development bank, government expects it to operate on a commercially viable manner and will not sanction any of its normal activities unless it’s a government-directed initiative.
“As to do this would reduce consumer choices available to all Solomon Islanders,” Kuma said.
He pointed out that the government wants to increase access to financial services and increase the amount of innovation occurring in target markets.
Thirdly, he said that it is essential that measures are put in place to create the right environment for DBSI and as well as other commercial banks to take hold.
He said that this will be critical in the making of all grants sustainable on a long term basis.
Kuma further stressed that financial institutions, in particular, need good regulatory and legal infrastructure to work effectively.
“I’m pleased to announce a package of financial reforms to accompany the opening of DBSI and to ensure the financial sustainability of all banks is the commitment of the government to progress.
“This will include critical financial services reform such as the Credit Union reform, NPF Legislative reform, Insurance Act reform, Financial Services Act reform and the National Payment System reform,” he added.
Kuma stressed that these reforms are critical to the long term financial operation of the banking sector including DBSI.
Meanwhile, the Minister was very happy that the DBSI Interim Board has performed its functions satisfactorily in that it has developed a strategic plan to take the bank forward.
By ANDREW FANASIA