The Commonwealth Bank of Australia operated in the Territory of Papua New Guinea (TPNG) from 1916 to 1959, with a break from 1942 to 1944 due to the Second World War. The Bank’s initial purpose was to serve the military personnel stationed there, as well as European settlers. From 1960, the Commonwealth Bank of Australia was a commercial bank only, with all central banking functions retained in the newly named Reserve Bank of Australia (which was the legal successor to the original Commonwealth Bank).

The Reserve Bank of Australia assisted in the creation of the financial system in TPNG, in order to prepare the country for independence. This included educational programmes, supporting Savings and Loan Societies (Credit Unions), scholarships for Papua New Guinean students to study at university in Australia, and training Indigenous Papua New Guineans to take over the running of the central bank. The work of the Reserve Bank of Australia in TPNG began in 1960, and handover to the Bank of Papua New Guinea was achieved in 1973.

In 1916 the Administrator of New Guinea, Colonel Petheridge, requested through the Minister for Defence that the Commonwealth Bank of Australia open a branch in Rabaul, TPNG. This was to cater for the 1200 Australian military personnel stationed there.

Chief Accountant of the Commonwealth Bank, HT Armitage, left Sydney on 14 March 1916, accompanied by two officers of the Bank and two safes of Australian banknotes. On 15 April 1916 the establishment of the Commonwealth Bank in New Guinea was proclaimed and German currency called in. Australian banknotes and coinage were issued as the only legal tender.

The Branch was housed in the former German Administration’s Treasury building. JH Slatyer held the position of Manager, DH Gray the Acting Accountant and Teller, and E Harmer was the clerk. All military accounts were transferred to the Commonwealth Bank, and all outlying area agencies were attached to it.

By July 1917 agencies existed at Ablingi, Aitape, Gasmatta, Kaewieng, Kieta, Kokopo, Madang, Manus, Morobe, Namatanai and Talasea. Kaewieng became a full branch on 16 May 1921.

Second World War

As the Japanese advanced in 1942, all Bank branches and agencies were closed. Rabaul was the first to close, on 21 January 1942. Lae branch had only been open for six weeks when it was forced to close. By October 1944 hostilities were ended and the Territory was under Military Administration. A Commonwealth Savings Bank Branch was established at Port Moresby, becoming a full branch in October 1945.

Post-war period

In 1949, HC Coombs became Governor of the Commonwealth Bank (and later of the Reserve Bank of Australia). He brought with him experience as Director-General of the Department of Post-War Reconstruction, including the transfer of the TPNG Administration from military to civilian control.

Madang branch had opened in 1948, followed by Honiara in 1951 and Goroka, Wewak and Bulolo in 1956.

In 1955 the first four Papua New Guinean schoolboys were recruited as Bank clerks. Two were assigned to Port Moresby branch, and two to Rabaul branch. Savings accounts became very popular for Papua New Guineans. By June 1959 there were 53,442 savings accounts held by Papua New Guineans at the Bank, with a total balance of £1,123,000.

Reserve Bank of Australia

The Reserve Bank Act 1959 separated the Commonwealth Bank’s central banking functions from its commercial banking activities. The Commonwealth Bank was renamed the Reserve Bank of Australia which would act as the nation’s central bank and was constituted separately from the newly created Commonwealth Banking Corporation which would operate as a trading bank.

On 18 August 1960, the Reserve Bank opened a branch in Port Moresby. There was a widespread movement after the Second World War to end colonisation and support developing economies. The Bank’s presence in TPNG was intended to support the creation of a financial system in the Territory, enabling it to secure economic and political independence. At this time, the Commonwealth Bank of Australia, which was now a completely separate business, continued operating in TPNG as a purely commercial entity.

The Reserve Bank’s initial work in TPNG involved establishing a savings and loan society system (credit union) and an education program aimed at giving Papua New Guineans knowledge about money, wealth and the use of banks. A multi-modal approach was adopted which involved the creation of films, pamphlets and educational courses. Field officers travelled the country, visiting remote communities to help groups establish savings societies and begin to manage their own money. In 1965 the TPNG Division of the Reserve Bank was created, which was responsible for all of the Reserve Bank’s activities in the Territory.

Papua New Guineans were increasingly trained and hired to staff the Bank in TPNG. This included Henry ToRobert, who was awarded a Bank scholarship to study Economics at Sydney University, and trained to eventually become the Governor of the country’s new central bank (Bank of Papua New Guinea) after the scheduled handover of functions and withdrawal of the Reserve Bank of Australia.

The Reserve Bank transferred control of the central bank functions, along with the Bank’s premises, to the Bank of Papua New Guinea (BPNG) on 1 November 1973. To celebrate the event, the new Governor, Henry ToRobert, presented the Governor of the Reserve Bank of Australia, John Phillips, with an Arawe Shield. This shield is still held in the Bank’s collection today. When the Reserve Bank left TPNG, the Commonwealth Bank remained in the capacity of a foreign commercial bank.

PNG became independent (self-governing) on 16 September 1975.

This information is drawn from records held by the Reserve Bank of Australia Archives.