NAURU – Australia’s Bendigo Bank is facing calls to close down its operations in Nauru, after Westpac announced it would cut ties with the island nation’s government.

Bendigo Bank is now the only financial institution with a physical presence in Nauru.

Westpac said its decision was based on concerns about financial transparency, and Australian Greens Senator Sarah Hanson-Young said that should prompt Bendigo Bank to follow suit.

“If Westpac have their concerns about issues of money laundering, other financial risks, it’s staggering to see that Bendigo Bank – a bank that is promoted as being one of community and social value – is entering into a financial relationship with the Nauru government.”

Hanson-Young also said the Bendigo Bank should have moral concerns about the Nauru government’s involvement in the operation of Australia’s processing centre for asylum seekers.

“The money that is flowing around the island, it’s a very small island, and it’s coming primarily from the Australian taxpayer, funding the detention facilities and the abuse of vulnerable refugees on this island,” she said.

“Many of the bank’s customers are surprised and shocked that they’ve now entered into such a tight financial relationship with the government of Nauru.”

In addition to the Senator, some of Bendigo Bank’s customers and shareholders also have concerns, and have raised them on the bank’s Facebook page.

“I’ve just read about your dealings on Nauru. That is concerning to me and my family and I hope you will reconsider being involved with that place and that we will continue to have an ethical banking option,” one Facebook user wrote.

Westpac has asked a small number of customers who do business with the government to shut their accounts by the end of the month.

Bendigo Bank is the only financial institution with a physical presence on Nauru, after opening a local agency on the island last year.

In a statement released last week responding to Westpac’s decision, Nauru’s government said it had strengthened its relationship with Bendigo Bank, which it described as its “chief financial partner”.

Bendigo Bank’s managing director Mike Hirst said the bank was doing the same thing in Nauru as it does in regional and rural communities around Australia.

“We service the local community,” he said. “We also bank a number of the refugee communities and our desire to be there is about financial inclusion, about giving the Nauruan people and the refugees a hand up.”

Hirst told ABC Radio Victoria that due diligence checks were done before opening the agency in Nauru.

“Before we went in to Nauru, we spoke to both Austrac (Australian Transaction Reports and Analysis Centre) and DFAT (Department of Foreign Affairs and Trade) about the issues with anti-money laundering and we got satisfaction that there were no longer issues there,” he said.

“Nauru is a member of the Asia Pacific group on money laundering. They’ve just been admitted into the World Bank and the IMF (International Monetary Fund) so I assume the World Bank and the IMF are comfortable with it as well.”

Hirst also rejected Senator Hanson-Young’s argument that Bendigo Bank should pull out because of Nauru’s involvement in the Australian government’s policy of offshore processing of asylum seekers.

“It’s the Australian people who’ve sent the refugees there. Now I know that the Senator hasn’t written to all the major banks in Australia and asked them to stop banking the Australian government.

“The Australian government is the one responsible for the people being on Nauru.”

Meanwhile, the Nauru Government said the actions of past administrations that saw the country used as a tax haven for offshore banking and dubious financial transactions were over.

In a statement, it said it had signed up to the OECD’s Convention on Mutual Administrative Assistance in Tax Matters that allows for the exchange of information on financial accounts with tax authorities in other countries. - ABC