Pacific countries have sought the help of the Asian Development Bank (ADB) to secure correspondent banking partners to increase investment and raise opportunities for local businesses.
The 14 Pacific Developing Member States (PMDCs) raised their concerns over the loss of three correspondent banking relations (CBRs) and de-risking of remittance service providers as a serious threat to the region’s financial viability and stability.
Samoa’s Minister for Finance, Lautimuia Uelese Vaai made the intervention at the ADB Governor’s Annual Meeting in the Georgian capital, Tbilisi Sunday,
“We acknowledge strong interests from the United States and Australia on this development issue and we look forward to practical solutions at the Pacific Banking Forum scheduled in July this year.
The issue will be on the agenda of the Pacific Banking Forum in Brisbane, Australia.
“We also welcome the World Bank’s recent CBR initiative to address this developmental challenge for the Pacific.”
The 14 PMDCs ‘strongly believe this critical issue needs innovative solutions.’
“There’s a need to formulate a consolidated regional response which requires the collective efforts of ADB and other MDBs (such as the World Bank and International Monetary Fund) and advanced economies (particularly the U.S, Australia and New Zealand for our region) together with the Pacific SIDS. ADB’s continued support in this long outstanding issue will be greatly appreciated, said Vaai.
PACNEWS understands one Pacific country has its foreign currency requests processed through the correspondent bank in Paris because none of the existing commercial banks in the Pacific wants to offer that service to the Pacific nation.
Correspondent banks are the financial institution that provides banking services on behalf of other financial institution (known as the respondent bank). In most cases, correspondent banks offer their respondent banks services such as wire transfers, foreign currency exchange, and trade finance.
The Pacific MDCs also advocated for visa free travel between Australia, New Zealand and Pacific Island States.
“This should be part of efforts to ease the travel process and strengthen regional ties. We believe that facilitating easier movement of people will further enhance regional integration and cooperation, said Governor Vaai.
Fiji’s Finance Minister, Dr Biman Prasad supported the visa free travel call by the 14 PMDCs – as a way to promote deeper and more meaningful regional cooperation and integration within the Pacific.
He said Fiji wants to see ADB undertake regional projects in fields that would contribute to the development of a more interconnected and resilient Pacific community.
“In line with this, Fiji strongly advocates for a visa-free arrangement between Australia, New Zealand, and the Pacific island states as part of efforts to ease the travel process and rebuild human resource infrastructure across the Pacific,” said Prasad