PNG looks to penalise commercial banks

6:47 am on 15 June 2015

Papua New Guinea's Prime Minister says he is looking at penalising commercial banks that he says are making businesses suffer because they are not happy with foreign currency restrictions imposed by the Central Bank.

Papua New Guinea Prime Minister Peter O'Neill.

Papua New Guinea Prime Minister Peter O'Neill. Photo: Supplied

Peter O'Neill says the banks have been giving people a hard time and the government has been talking with the Governor of the Bank of PNG to impose tougher penalties.

The Post Courier reports Mr O'Neill saying the banks are making massive profits from foreign exchange dealings, and the central bank needed to intervene because of the margins.

He says the banks have been unable to maintain a steady exchange rate, which has made the cost of importing goods expensive for businesses.

Mr O'Neill says in other parts of the world banks would be punished with heavy fines for such behaviour, and he is looking at doing the same in Papua New Guinea.