Financial Crime World

Banking Regulations Compliance Checklist in Solomon Islands to Ease Financial Transactions and Boost Economic Growth

The Solomon Islands Government has recently enacted the National Payment Systems Act 2022, a landmark reform aimed at modernizing the country’s financial architecture. This legislation is expected to increase access to affordable digital payment services, reduce reliance on cash, and drive broad-based financial inclusion across the Pacific nation.

Modernization of Financial Architecture

The new law paves the way for the adoption of an electronic funds settlement process, replacing a manual system that can result in significant delays in clearing funds. The current system, which involves transferring funds between banks using cheques, is highly inefficient and hampers everyday commerce and economic activity.

Benefits of the Reform

  • Enables Solomon Islands to benefit from a modern, resilient financial system with a more efficient, safe, and transparent approach.
  • Allows for better protection of consumers and offers better products and services.
  • Increases access to electronic payment services for people who have been missing out on offerings by banks and other financial providers.

International Support

The International Finance Corporation (IFC), a member of the World Bank Group, has provided technical expertise to the Central Bank of Solomon Islands on this landmark reform. The IFC’s work in Solomon Islands is guided by the Pacific Partnership, a joint initiative with Australia and New Zealand aimed at stimulating private sector investment and reducing poverty in the Pacific.

Next Steps

The next step in this process is the establishment of an Automated Fund Transfer system, which will enable digital payments.

Quotes

  • “This crucial legislation will enable Solomon Islands to benefit from a modern, resilient financial system, with a more efficient, safe, and transparent approach,” said Dr Luke Forau, Governor of the Central Bank of Solomon Islands.
  • “It will also enable us to better protect consumers and offer better products and services.” - Dr. Luke Forau
  • “This payment systems work will help increase access to electronic payment services for people who have been missing out on the offerings by banks and other financial providers,” said Judith Green, IFC Country Manager for Australia, New Zealand, Papua New Guinea, and the Pacific Islands.
  • “It will also strengthen the legal framework for the national payment system and enable modern payment systems infrastructure that delivers safe and reliable digital payment and remittance transactions at lower cost.” - Judith Green