Jul 18, 2018 Last Updated 12:05 AM, Jul 17, 2018

Next stop: Fiji with new bank, new cash

Expect new money (new credit) into Fiji’s financial system when the new commercial French owned Bred Bank begins operation in Fiji in September. Also expect the lowering of interest rates. That’s the word from Vanuatu’s banking sources, where Bred Bank is already operating. “The history of Bred Bank in Vanuatu was that it came in with fresh money and it is likely they will do the same in Fiji ,” said a Vanuatu banking insider.

Fiji Bank and Finance Sector Employees Union secretary Pramod Rae welcomed the new bank’s inclusion, particularly the fact it would be hiring locals. “Fiji is a big banking market and their entry into Fiji will create a lot of competition and I think customers will be seeing a drop in bank fees and rates. For this, we certainly welcome them here.” University of the South Pacific economist Professor Biman Prasad said the entry of the new bank should be welcomed. “This is not likely to affect the role of leading banks such as ANZ and Westpac, but it could add to the variety of products available to customers,” Prasad said. “Fiji is still a leading economy despite our poor growth over the last five years. Our banking industry is sound and stable.

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Pensioners asked to pay back overpayments

It’s been 19 years since former police and quarantine officer Frederick C. Ngeskabei retired, that’s why he was shocked and frustrated to receive on May 2012 a letter from the Commonwealth of the Northern Mariana Islands (CNMI) Retirement Fund saying he has to pay back $225,000 in alleged overpayment since he started receiving his bi-monthly pension.

Retired police major Antonio O. Kiyoshi, now with disability and living in Arizona, finds himself in a similar situation, having been asked to return almost $93,000 in overpayments. Ngeskabei and Kiyoshi are just two of the 120 retirees that are being asked to pay back the Retirement Fund a total of approximately $5 million. This aggressive push to recover $5 million in overpayments from retirees as a result of the pension agency’s own misapplication of the law prior to 2001 is just the latest in a string of controversies hounding the cash-strapped NMI Retirement Fund.

A combination of factors has been running the pension agency to the ground. These include overpayment of benefits, the CNMI government’s non-payment of enough money into the Retirement Fund yet burdened it with costly add-ons, and alleged receipt of bad investment advice from its adviser, Bank of America Corp’s Merrill Lynch. The CNMI government owes the Retirement Fund over $300 million in unpaid employer contributions.

“The CNMI’s retirement program is one of the most luxurious on American soil,” CNMI Representative Joseph Palacios (R-Saipan) told Islands Business. Citing figures from the Executive Branch, Palacios said the average government pension in the CNMI is $20,000 a year. In the U.S., it is only $10,000, he said. Palacios also said a retired judge in Hawaii gets as little as $40,000 or less a year but in the CNMI, retired judges and justices receive $80,000 to over $100,000 a year. Even spouses and children of deceased retirees in the CNMI also get benefits.

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