Government has proposal to further commercialize Tonga Development Bank (TDB).
The Finance and National Planning Minister, Hon. Lisiate ‘Akolo revealed this in Parliament yesterday.
This came when ‘Eua People’s Representative raised concerns on the impact of Westpac Bank of Tonga’s closure in branches in ‘Eua and Ha’apai.
Sunia Fili told Parliament he was in ‘Eua at the weekend and had problems when using his Westpac cheque account.
“I went to one of the gas station for refill, I use a cheque account for payment. I was told they do not accept Westpac cheque. They say if they cash Westpac cheque at the Tonga Development Bank, there’s a bank fee of TOP$10.00
When a Westpac bank customer withdraws money below TOP$500.00, there’s an additional bank fee of TOP$5. Additional TOP$10 bank fee is imposed for withdrawing more than TOP$500.00,” said Sunia Fili.
He told Parliament Government should speed up actions for possible reduction of new bank fees imposed on every Westpac bank’s transaction at the TDB.
Sunia added Westpac’s recent move to close branches in the outer islands hinders the country’s development.
“Economic development involves cash flow of money. We (customers) deposit money for safety in the bank and also withdraw it to use in our economy. We (MPs) have yet to hear from Westpac’s on good reason for the bank’s shut down,” explained Sunia Fili.
He said Westpac bank customers at ‘Eua and Ha’apai are suffering and therefore urged Government to take immediate action.
In response, the Finance and National Planning Minister, Hon. Lisiate ‘Akolo said the Treasury Department also encountered the same problem.
“We are being told that additional bank fees are imposed on Westpac Bank civil servants’ customers as a result of an arrangement with TDB. It’s a pity Government was never involved.
Bank fees were also imposed on Government cheque payment…and majority of public servants in ‘Eua and Ha’apai that get paid via Westpac are also affected. I told Treasury officials that talks should be held with both Westpac Bank of Tonga and TDB to avoid such problem,” said Hon. ‘Akolo.
He adds if additional bank fees is charged by TDB on Westpac customers in the affected islands, then civil servants’ pay will be paid directly to them. This is because he said Government opposed the idea of customers charged additional bank fees.
In that regard, Hon. ‘Akolo says Government’s proposal to further commercialize Tonga Development Bank (TDB) into a commercial bank is necessary.
“Government deposited money in overseas banks as well as TDB and there’s proposal to set up our own national bank. Up to TOP$150 million are kept in those banks. Majority of the money comes from Provident Fund and the National Retirement Fund.
We deposited money in those banks and they have control over it according to their respective banking policy. This is public funds and we hope to further commercialize TDB as our national bank,” explained the Finance Minister.
Hon. ‘Akolo said negotiation has begun late last year to further commercialise TDB in efforts to boost our economy.
“We went to Australia and held talks there in seeking for a corresponding bank but that means more work to do. We also have to review Reserve Bank’s bank policy and legislation seeking measures to unwind commercial bank’s monetary policy.”
He said the International Finance Corporation (IFC) a member of the World Bank Group had recently met with Government to assist Tonga in efforts to turn TDB into a Commercial Bank.
“These talks aim to alleviate problems similar to what had been raised in Parliament including issues on bank negotiation arrangement that affects customers. If the proposal gets through the Tonga Development Bank will be changed into Commercial Bank of Tonga,” maintained Hon. ‘Akolo.
Reserve Bank and Tonga Development Bank officials have met MPs at 12pm today at Parliament’s Conference Room in effort to alleviate the situation.