Thousands of Palauan citizens and others with accounts at the now-defunct Pacific Savings Bank face a financial crisis after the bank was put into receivership last month.
Palau President Tommy Remengesau Junior is considering a number of ways to lessen the burden on citizens, including borrowing millions on the bond market to protect the bank's customers from losing their savings and loans.
Pacific Savings Bank Ltd is estimated to be 12 million US dollars in the red and has been deemed insolvent.
The bank had its license revoked and was placed into receivership November 7 by Palau's Financial Institutions Commission.
Pacific Savings Bank was the first locally owned bank in Palau and is believed to have more than 7,000 customers and more than 20 million US dollars in deposits.
Several businesses including schools, tour groups and hotels that had their money in the bank are now in murky waters.
The Belau Tourism Association board of directors says an audit released days before the bank closed showed several members of the Bank's board of directors took out unsecured personal loans.
The Association and Palau Chamber of Commerce have been meeting with government officials and the International Monetary Fund about the situation.
