Photo: RNZI / Jamie Tahana

The Central Bank of Solomon Islands has granted an interim license for the French Bank, BRED, to establish a branch in the country.

Bred Limited is expected to become the country's fourth commercial bank later this year or by early 2017.

The new bank must meet certain conditions during a 12 month interim licensing period.

The Central Bank says competition in the financial sector is good for the country.

The bank says it will help raise the standard of banking and customer services, encourage innovation, enhance efficiency, lift customer banking experiences and pull costs down.

In the past few years Bred has expanded from New Caledonia and French Polynesia, opening branches in Vanuatu and Fiji.