Methods of Payment:
PNG’s National Payments System (NPS) encompasses everything to do with the movement of money. This involves a network of financial institutions and payment services providers (PSPs) along with the supporting technology, processes, procedures, and legislation that together enable funds to be moved from payers (or senders) to payees (recipients) in whatever form or at whatever time, across the whole economy.
In PNG, people and businesses use a variety of financial instruments, including cash, cheques, electronic payments, real time gross settlement, direct credits, and card and mobile payments.
For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
The PNG banking system has no specific rules/laws that affect U.S. business. There are both domestic and international banks in PNG, and all have reported profits in their most recent report.
The Central Bank, Bank of PNG (BPNG) regulates depository corporations, superannuation funds, life insurance companies, and money exchange and remittance services. The following financial institutions listed below are authorized or licensed under the Central Banking Act 2000, Banks & Financial Institutions Act 2000, Savings and Loan Societies (Amendment) Act 1995, Central Banking Act 2000, Superannuation (General Provisions) Act 2000 and Life Insurance Act 2000. These authorized financial institutions are licensed or authorized to accept deposits from the public.
It is illegal for any company or person whose name is not listed below to conduct any form of business meant for these institutions without obtaining a license from the Central Bank.
These authorized financial institutions are licensed or authorized to accept deposits from the public.
- Commercial Banks
- Licensed Financial Institutions (LFIs)
- Savings & Loan Societies
- Mobile Network Operator
- Money Remittance Operators
- FX Dealers
- Money Changers
- Life Insurance Business
- Superannuation Funds
- Gold Exporters
Foreign Exchange Controls:
While there are no legal restrictions on foreign investors in converting, transferring, or repatriating funds associated with an investment (e.g., remittances of investment capital, earnings, loan or lease payments, royalties), a lack of available foreign exchange makes such conversions, transfers, and repatriation time-consuming or impossible.
Funds associated with any form of investment cannot be freely converted into any world currency. Bank of Papua New Guinea (BPNG) requires that all funds held in PNG be held in PNG kina (PGK). This rule was announced with little notice and caught many businesses off-guard in 2016. While there was an appeal process for businesses that wished to keep non-PGK accounts, none of the appeals were granted.
On June 4, 2014, the BPNG introduced measures which have effectively pegged the Kina at levels that led to foreign exchange shortages. While the kina does fluctuate somewhat in value, it only trades in a tight band as allowed by the BPNG).
In August 2023, the BPNG allowed the PNG kina to slowly depreciate against the US dollar and other currencies to address current forex issues. PNG is facing severe forex shortage due to various factors including having a high debt to GDP ratio, balance of trade deficits, reduced foreign investment inflow, and external price fluctuations affecting foreign reserves. The effects of the forex shortage have been disruptive to businesses and the economy. A gradual managed depreciation of the PNG kina by the central bank will help to minimize the risks and uncertainties with currency volatility.
U.S. Banks and Local Correspondent Banks:
There are no U.S. banks operating in PNG. However, U.S. industry has played a prominent role in realizing PNG’s mining and energy potential, and ExxonMobil’s lead involvement in the US $19 billion PNG LNG project was supported in 2009 by USD 3 billion in export financing from EXIM Bank, at the time the largest single exposure in the history of EXIM Bank.
For additional information, visit the U.S. Department of State 2023 Investment Climate Statement