inia naiyaga : the banking industry in fiji opening speech by mr inia naiyaga, acting deputy governor of the reserve bank of fiji, at the one - day banking expo organized by the association of banks in fiji ( abif ), suva, 7 may 2011. * * * introductory remarks chairman of the association of banks in fiji ( abif ), mr. norman wilson ; members of the association of banks in fiji ( abif ) ; distinguished guests ; ladies and gentlemen : ni sa bula vinaka and a very good morning to you all. i am delighted to be here this morning and would like to congratulate the abif for organizing this expo to raise public awareness, on the valuable role that commercial banks play in our economy. i encourage the public to take this opportunity to come and learn of our banking industry here in fiji. the commercial banks have a very long history in fiji, the older ones spanning over 100 years. role of the commercial banks ladies and gentlemen, let me say a little about the important role played by the commercial banks in fiji fiji has a well developed financial system that not only is secure and sound ; but has remained resilient despite the recent global financial crisis. the strong contribution of the banking industry to the fiji financial system has been a major factor in this regard. over the years the banks have invested heavily in fiji and have remained committed to delivering services that have helped shape and develop our country into what it is today. at the end of 2010 the commercial bank ’ s assets alone was around 42 % of the entire financial system and this highlights the importance of this industry in the local economy. the value of total assets of the commercial banks at the end of 2010 was $ 4. 5b and equates to around 75 % of gdp. their role in facilitating trade commercial banks are – financial institutions that primarily intermediate between the savers and the borrowers in an economy. they also buy and sell foreign currencies and facilitate trade and the transfer of payments both domestically and across international borders. it is these very transactions that help to pay for our salaries, the importation of goods and services that we use almost every day, and provide the much needed capital for investment. at the end of 2010, the total loan book value of all banks stood at $ 3. 1b and this has grown by 159 % over the last 10 years. commercial banks play an important role in the transmission of monetary policy in fiji. over the

consumer credit. also companies which specialize in payment systems are part of the non - banking category. right now i am talking, they offer you the possibility to make payments over your mobile telephone. this sevice is already available in the united states. other non - banking institutions include consumer comparison sites like wellowell, portals and personal agents. the implications of e - banking for supervision so far i have described some consequences of electronic media for the banking system. but what are the implications for banking supervision? let me discuss some recent activities undertaken by supervisors. first, the nederlandsche bank supervises the banking system in accordance with the dutch credit systems supervision act. the policy regulations for the media ( beleidsregels media ) were formulated to indicate how this act should be applied where financial services are offered via electronic media. briefly put, these regulations state that it makes no difference whether banking services are provided via traditional channels such as branch offices, or over the internet. in both cases the institution concerned is required to hold a banking license. for example, an institution established in the netherlands which provides banking services over the internet comes under the supervision of dnb. however, a provider which is established abroad but via the internet is active in the dutch market is also subject to dnb supervision. several indicators play a part in deciding whether activities are considered to be directed at the dutch market, like the use of the dutch language, contact points in the netherlands, and the addressees of the media used. the existing regulatory legislation is therefore adequate for proper banking supervision, also with the advent of e - banking. e - banking has however made the regulator ’ s task more complicated. how do we check that all providers that are active over the internet in the dutch market do indeed comply with regulatory legislation? this brings me to a recent dnb initiative. second, in combination with its fellow regulators the dutch insurance board and the securities board of the netherlands, the dnb has entered into a co - operative agreement with the dutch national police agency ( korps landelijke politiediensten, or klpd ) and the dutch economic investigation service ( economische controle dienst, or ecd ). we are working together on developing new tracking methods. the objective is that those whose actions on the internet are in breach of the regulatory legislation can be traced. a third initiative is the introduction of the internet officer. the digital detective, or cybercop,