All Financial Institutions like the Local Commercial Banks, Savings and Loans society and ete licensed and regulated by the Bank of Papua New Guinea. The full list of all the licensed financial institutions operating in the country is available on the Bank of PNG Website (see the listing). These are the institutions that individuals and organizations must bank their money with. Either as a deposit or for investments like shares, and etc.
For day to day transactions between organizations and individuals, the Retail Commercial Banks play a very critical role in the circulation of money within the country or the economy. Thus, the movement of money enables the economic activities to function and that intern supports the citizens to live, move, work, and etc. As such, it is important for general public to be aware of how this circulation of money between the bank works. Here is basic layman’s way to see how it works.
Role of Bank of PNG.
The Bank of PNG, is the country’s top government organization that oversees all monetary matters in the country. This includes regulating the financial industry players like financial institutions which includes the bank. Therefore, it monitors all the transactions that occurs in the transfer of money by the banks. Both between different banks and within a bank’s own customers, those that bank with that particular bank. The transactions that occurs between accounts of a same bank are processed and accessed faster. The reason is because, the transfers happen within the banking system of the bank itself. For example, if someone do a Mobile or Internet Banking Transfer from his or her BSP Account to another BSP Account, the transfer is instant and the recipient will see the change in the balance and confirm with the sender. However, if he/she sends it to another Bank like Westpac, or Kina Bank account, then it goes through the Kina Automated Transfer System (KATS) at the Bank of PNG.
Because of the KATS scheduled transaction clearing times there is usually a slight delay in money actually reaching the recipient. All the commercial retail banks participate in the KATS system, as shown in the diagram below from the Bank of PNG.
Payment Clearing Times.
Customers mainly used three forms of money transfers through their bank. Internet Banking, Mobile Banking, and payment advice (mostly used by organizations for Salary processing and other forms of bulk payment distributions). Once these payments are confirmed, the requests transfer requests are batched and send to the KATS. The KATS takes all these request batches from the Banks and put them in ques for processing. Accounting to the Bank of PNG website, the current processing times are as follows:
1st Clearing 9:00-9:30 AM
2nd Clearing 11:30-12: Midday
3rd Clearing 2:00-2:30 pm
4th Clearing 4:00-4:30 pm
Any transfer batch request that reaches KATS after the clearing time, it’s put in que for the next clearing time. For example, request send at 10:00 am will wait for 11:30-12 midday clearing. Any request send after 4:30 pm will roll over to the next day at 9:00-9:30 processing period
The service is not available during weekends (Saturday & Sunday)
When to Make Payments
Knowing the KATS Clearing time is important for several reasons. Here several things to have in mind when considering making payment to accounts that is another bank than the transferring account.
- If the payment is intended to reach the recipient account on Monday, then it’s good to transfer on the Weekend so that it reaches the account on the 1st or 2nd Clearing times. Especially when transferring money to relatives and family members living in the districts or villages and have to travel to town to do their banking, shopping and etc and have to return back.
- If the transfer is for emergency situation like someone sick and in hospital, assist with travel needs and etc, then it’s always good to ask for transfer to the same bank account. Same bank account transfers are instant or fast.
- If you are expecting a payment for money that was transferred to you or planning to transfer to another person, plan according to the clearing times from Bank of PNG as mentioned above.
- ALWAYS Confirm the recipients Account Details carefully before confirming the transfer if you are doing it via Mobile or Internet Banking. Once the transfer is processed through KATS, somehow the you got the account details wrong, your bank will not be able to refund your money. You will have to contact the recipient’s bank. It can be very frustrating and time consuming to get your refund. Sometimes, unsuccessful, if you are doing from the districts or faraway from town.
Salary Account Payments
For those employed, it’s always good to talk the employer and ask them which Bank they use to process employee or staff salaries, and you fill your account from that Bank. If you don’t have, you can fill the one you have but make sure you Open a Account with the same bank as your Employer and change to that. The reason is simple, you get your salary quicker and if payment is late before weekend, you still have access to it in the evening without having to wait for Monday morning 10:00 am from through the KATS.
List of Local Banks in Papua New Guinea
How to Protect Your Bank Debit Visa Card Information
Sending money overseas through Western Union from Papua New Guinea.
Papua New Guinea Currency Notes and Coins
