Pasifika whānau here and abroad are relying on the courage and loyalty of New Zealand banks to continue their services in the Pacific, Te Taumata Chairman Chris Insley says.
His comments come as the Reserve Bank tries to stem the exodus of international banks from Pacific Island nations.
Trade, foreign investment and remittance payments for Pacific nations all rely on correspondent banking relationships, which enable cross-border payments and currency exchange, and are vital to economic prosperity in the Pacific.
However, correspondent banking relationships are experiencing a sharp decline, particularly in Pacific nations, meaning trade, investment and sending money home are becoming more difficult and expensive.
This decline is, in part, due to the rising risks and costs in relation to anti-money laundering and countering financing of terrorism (AML/CFT) requirements, but banks have also cited low risk appetite and low profitability as factors contributing to their withdrawal.
Mr Insley says Te Taumata fully supports the Reserve Bank’s calls for New Zealand banks to continue their support in the Pacific.
“The wellbeing of our Pasifika whānau relies on New Zealand banks continuing to service their needs.
“The economic impact of New Zealand’s withdrawal could have dire consequences not just in our neighbouring islands, but on our own shores, with the thousands of Pacific migrants living here and sending money home.
“Te Taumata does not want to see whānau who depend on money being sent home from relatives in other countries to be further disadvantaged.
“The impact COVID has had on the tourism sector in the Pacific continues to be significant. Our Pacific neighbours need New Zealand banks to stand by their side to ensure that impact is not worsened.”
The Reserve Bank has a Pacific Remittance Project which aims to enhance access to, and reduce the cost of foreign worker payments to the Pacific. However, this work could be jeopardised by the withdrawal of New Zealand and Australian banking services.