offer full commercial banking services, ranging from personal and business banking, to loans and foreign exchange services. i am pleased to hear that this is just the beginning and that several other branches are on the drawing board for other locations around fiji. concluding remarks to the nausori business community and the people of the three provinces of naitasiri, rewa and tailevu, you now have a new bank in town. i encourage you to check out the services that bred bank will provide to your advantage. bis central bankers ’ speeches i again emphasise that such commitment and effort by our financial sector institutions need to be applauded and i thank the board and management of bred bank for having the ongoing confidence in our fijian economy. thank you again satish for the kind invitation to be here today. i extend my warmest congratulations to the bred bank team on the establishment of this new branch. i wish your institution the very best in its future endeavours. official opening i now have much pleasure in declaring bred bank ( fiji ) limited ’ s nausori branch, open. thank you, merci and vinaka vakalevu. bis central bankers ’ speeches

##inatory pricing financial innovations – whether fair or unfair to consumers? 10. every innovation in the financial sector has purportedly the same theme – of the consumer, for the consumer, by the consumer. however, in reality, most financial innovations invariably border on regulatory arbitrage, accounting arbitrage and tax avoidance. an important litmus test for every financial innovation must be the contribution such an innovation makes to the real economy and ultimately, to the society. though the global financial system has witnessed crises, one after the other in quick succession, our learnings from each crisis have been short - lived. the imperative need for customer centricity and adherence to standards has often been recognized, but has been lost in the rush for short term business gains. let me give some common examples of unfair treatment to customers : 11. the product – based incentives for staff in banks selling insurance products or mutual funds creates perverse incentives and, thereby, shifts the focus from the customer ’ s original need. the staff is keen on bundling insurance along with term deposits ( and in some cases, in lieu of term deposits ) only because of the product - based incentive structures. sadly, they lose sight of customer convenience, product suitability and blatantly indulge in mis - selling. 12. pricing of products is an area which gives rise to numerous customer grievances. this is because banks have not adopted a transparent cost - plus approach to pricing. instead, more often it is dictated by the bargaining power of the customer and the competitor ’ s prices. specifically, pricing practices followed in case of floating interest rate based products is replete with instances of lack of transparency and fair play. the base rate may change due to changes in general interest rates in the market, but there is no reason why the spread on base rate charged to a customer should change without any change in the risk profile of the customer. besides, banks are quick to adjust the interest rate upwards while they are reluctant to pass on the benefit of interest rate cuts to their customers. another anomaly in this area is the treatment meted out to old and new customers. it must be logically expected that the floating rate of interest applicable to two customers, with identical risk profiles, will be the same at any point in time irrespective of the fact that a customer is new or old. regrettably, this is not the case. 13. another market conduct and integrity related issue is the provision of festive rates. i