WALE SAYS BSP’S PATH FROM GREEN TO GREED MUST BE STOPPED

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The Leader of Opposition Hon. Matthew Wale has called on the Central Bank of Solomon Islands to defend ordinary Solomon Islanders from unjustifiable and excessive bank fee increases.

The call was made in light of BSP’s recent decision, effective 28th June 2025, to impose a 1% fee on all cash deposits and withdrawals of SBD 20,000 or more per day, per account.

Hon. Wale described the increase as an unreasonable charge that will penalize legitimate economic activity of everyday Solomon Islanders.

“This is an unjustifiable fee on people simply trying to access or manage their own money. Many Solomon Islanders, particularly those in the villages, those running small businesses, schools, or churches, are forced to operate in cash. This fee punishes them for circumstances they did not choose,” Hon. Wale said.

Hon. Wale said that such a fee will further affect Solomon Islanders through institutions such as DBSI.

“Many customers of DBSI are ordinary Solomon Islanders who repay their loans in cash. DBSI, who banks with BSP, will then be charged 1% for its deposits. If DBSI deposits 300,000 per day, it will be charged 3,000 per day. It is not hard to imagine how this will then affect DBSI interest rates. CBSI must clamp down on this,” Hon. Wale said.

Hon. Wale explained that the fee ultimately penalizes those excluded from digital finance, rather than encouraging digital migration.

“If BSP’s rationale is promoting digital banking, it should be investing in access, education, and incentives, not punishing the very people who are not yet equipped for it,” Hon. Wale said.

Hon. Wale highlighted that such a fee is unjustifiable when compared to the other financial institutions in the Country.

“As a comparison, ANZ charges a flat fee of SBD20 per staff assisted cash transaction, regardless of the amount,” Hon. Wale said.

Hon. Wale said the decision is made worse by the broader financial context of BSP’s excess liquidity and high lending interest rates.

“We have a banking model that favors the institution, not the people. It is a model of extraction, not service. That is not how a responsible financial system should operate. BSP, as a financial institution, held an excess liquidity of over SBD 1.8 billion across 2023 and 2024, liquidity it could not productively lend. It is already in a strong financial position. And yet, instead of easing the burden on its customers, it has chosen to increase it,” Hon. Wale emphasized.

Hon. Wale urged CBSI to use its regulatory powers Act to review, and where appropriate, prohibit such unjustified fee structures.

“It is the role of the Central Bank to safeguard the financial integrity of our economy, not only in relation to monetary policy or banking soundness, but in ensuring that the banking system serves the people,” Hon. Wale said.

Hon. Wale concluded by calling for a financial system that reflects the nation’s values.

“We need a banking culture that is rooted in fairness. One that facilitates economic participation and contributes to national development. Our people deserve financial institutions that act as partners, not predators. CBSI must ensure this is reflected in its financial regulation,” Hon. Wale said.

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