Wednesday, 13 June 2012 13:06
The Rural Bankers Association of the Philippines (RBAP) welcomed the Monetary Board's decision to remove the restrictions on bank branching rule saying this will further widen rural banks’ customer base and increase access of rural folks to the formal banking sector.
“The Rural Bankers Association of the Philippines welcomes the decision of the BSP in lifting the limitations to branch expansions. For rural banks, it is a way of further creating growth and progress in far flung areas by providing much needed financial services like loans for farmers and micro entrepreneurs,” RBAP President Ian Pama said in a statement.
The Bangko Sentral ng Pilipinas (BSP) has removed the restriction policy on bank branching but requires banks applying for the opening of new branches and extension offices to ensure that it has the necessary qualifying capital to do so.
BSP Circular No. 759 Series of 2012 estates that total processing fee for the branch and extension offices application will be charged immediately against the bank’s demand deposits and not on staggered basis.
Opening of the branch is allowed to be extended for one to three years after the approval date and will not be subject to further extension.
However, the central bank will ether suspend or revoke the opening of new branches if it discovered that the bank’s qualifying capital is no longer enough to support the remaining unopened branches; the bank or any of its subsidiaries is not under BSP’s prompt corrective action (PCA); and the banks has no major outstanding supervisory concern on safety and soundness.
Pama explained that the new policy will enable rural banks to increase their presence and in turn the services they provide aside from the use of automated teller machine (ATM) and mobile banking, which he said increases “our market presence and our relevance and value to our customers.”
“We welcome this very positive decision by the Monetary Board of the BSP in BSP Cirular 759. It is a step towards better services for our depositors and helping the banking industry grow in general,” he added.
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