BY IRWIN ANGIKI

The Leader of Opposition has condemned the Central Bank over its response to the controversial hefty BSP cash handling fee.

Matthew Wale described the Central Bank (CBSI) stance on the matter as ‘a shocking abdication of responsibility’.

CBSI’s response Thursday last week said it was taking ‘regulatory steps following the introduction of new handling fees and other fees’ by Bank of South Pacific (BSP).

‘Appropriate regulatory and supervisory actions’ were being taken, the CBSI statement added.

But, just what do these words mean, Mr Wale asks.

CBSI communications has not replied to email enquiries sent by this paper last week to clarify these fancy terms.

Meanwhile, Wale said the Central Bank’s failure to take clear and immediate action reflects a serious lack of urgency and leadership.

“What an abdication of responsibility. CBSI says it is taking regulatory steps, but what are those steps? When were they taken? What outcome is expected and when? The people need clear answers, not vague assurances,” Wale said in a statement last week.

Wale said CBSI has a statutory and moral responsibility to ensure that banking remains accessible and inexpensive and that the economy is not adversely affected by unreasonably high bank fees.

“CBSI should not sit back and wait for individual customer complaints before acting. It need not wait. CBSI must not abdicate its responsibility in these matters, especially when it concerns the wellbeing of thousands of Solomon Islanders who are being penalised by these new fees,” Wale said.

Wale said CBSI should, at the very least, order an immediate suspension of BSP’s fee increases until a proper determination has been made on their fairness and impact.

“Anything less would be a failure to protect the public interest,” Wale said.

Wale said the decision by CBSI to redirect customers to complaints processes, while seemingly appropriate, shifts the burden onto many who are not equipped to navigate it.

“Market vendors, rural communities, school committees, and church groups are the ones affected most. Referring them to formal complaints procedures is not protection. It is avoidance,” Wale said.

Wale urged all BSP customers across the country who are able to take action.

“I call on all BSP customers who can, to formally lodge complaints with BSP and to escalate those complaints to CBSI without delay. Let the bank and the regulator be overwhelmed with the voices of the people they are meant to serve,” Wale said.

On June 28, 2025, BSP began charging one percent on cash deposits and withdrawals $20,000 or more, per day, per account.

The bank did not give any reason for this hefty fee. A notice on its website on May 28, 2025, simply told customers to expect this new rate along with other changes to take effect June 28.

Opposition Leader Wale criticised this move by BSP in a media statement on July 3.

The following week, several businesses reported feeling the pinch on their profits, with many complaining that they were not aware of BSP’s new fees.

One major local Honiara-based business told Island Sun that BSP’s new fee was eating away around $4,000 per day via cash deposits.

This was nearly half of their profit per day, the business owner told Island on condition of anonymity.

It is understood the business will this week lay off the first batch of its workers in response to BSP’s fee to cover costs.

Other businesses are also reportedly making similar ‘inconvenient’ adjustments to counter BSP’s new fee.

Some businesses are factoring the cost of BSP’s fee into their service and goods prices.

“We have marked up our prices for our products and service to cover this new BSP fee,” one business owner, who requested anonymity, told Island Sun over the weekend.

Another business owner said it is now depositing below the $20,000 minimum mark to escape the ‘one-percent penalty’.

“We now deposit below $20,000 to avoid BSP’s one-percent penalty. But, this is inconvenient since we have left-over cash takings and this accumulation will soon force us to consider a second account or bank,” the business owner told Island Sun, also on condition of anonymity.

In the Solomon Islands, transaction using hard case is the norm. Digital exchanges is still far behind.

BSP’s new fee is projected to hit hard on people and businesses.

Wale, in a statement July 3, described the increase as an unreasonable charge that will penalise 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.

“Many customers of DBSI are ordinary Solomon Islanders who repay their loans in cash. DBSI, who banks with BSP, will then be charged one percent 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,” Wale said.

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