Nauru to get a bank, finally

2013-03-10T11:00:00Z

<p style="text-align: justify;">Nauru has had many unique attributes down the years. It was once one of the world’s richest nations on a per capita basis. <!--more--></p>
<p style="text-align: justify;">It is now known to be the world’s tiniest republic with just 10,000 people and perhaps the only country in the world without a proper bank within its borders.</p>
<p style="text-align: justify;">The country has been recently in the news mainly because of controversies surrounding its Australian refugee holding facility. Last week though, it made the headlines for its plans to revive banking services in the country. The operating licenses of several hundred banking outfits supposedly operating out of Nauru were cancelled in the early 2000s following widespread worries that they were a part of a system for international money laundering. The island has been a cash economy for more than a decade.</p>
<p style="text-align: justify;">Last week it has been revealed that the Nauruan Government is in discussions with Bendigo &amp; Adelaide Bank, Australia's fifth-largest lender, to set up a community branch on the island, giving residents access to savings accounts, debit and credit cards for the first time in nearly a decade.</p>
<p style="text-align: justify;">Under the proposed community bank model, local customers would help fund the start-up of the Nauru branch, which the government estimated would need about 900,000 Australian dollars (US$857,000) in capital. The government will create a holding company and underwrite the issue of shares to citizens who become shareholders of the bank, providing A$500,000 in capital itself.</p>
<p style="text-align: justify;">The Australian Government has agreed to extend the Financial Claims Scheme that guarantees deposits in Australian banks to branches of Bendigo and Adelaide Bank in Nauru.</p>
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