THE legal frameworks underpinning financial sector oversight in Fiji have gaps.
According to the International Monetary Fund’s 2018 Article IV Consultation with Fiji, the oversight of credit unions and cooperatives by the Registrar of Credit Unions is inadequate.
The report went on to say that the credit unions lacked reliable record keeping and there was increased mistrust among members.
It was also recommended that the new Credit Union Act that places credit unions and cooperatives under the oversight of the RBF and is aligned with international best practice should be adopted as it was applicable to Fiji.
The report also highlighted that the governance of public non-bank financial institutions (NBFIs) – Fiji National Provident Fund (FNPF), the Fiji Development Bank (FDB), and the Fiji Housing Authority (FHA) – had weaknesses that could undermine their economic performance.
It said currently, the government can remove board members from public NBFIs without cause during their terms and in addition, board member terms tend to be short, limiting NBFIs’ ability to build institutional knowledge and expertise.
The IMF staff recommended that board members should be protected from removal without cause and their terms extended from 2 to 4 years, in line with international best practices.
