BSP dangles 8 incentives to rural banks under SPRB

BSP dangles 8 incentives to rural banks under SPRB

Manila Bulletin

The Bangko Sentral ng Pilipinas (BSP) will grant eight merger and consolidation incentives to rural banks participating in the P5-billion Strengthening Program for Rural Banks (SPRB) with the Philippine Deposit Insurance Corp. (PDIC), including condonation, restructuring and waiver of past due BSP loans and all due dividends.

Based on the BSP Guidelines on the Grant of Regulatory Relief, rural banks acting as "white knights" may avail of the following perks:

*Conversion of the existing head offices, branches and/or extension offices of the merging or consolidating rural banks into head office, branches or extension offices of the merged/consolidated rural bank;

*Relocation/opening of existing/approved but unopened branches, extension offices and/or other banking offices of the merged/consolidated rural bank within two years from date of merger or consolidation, subject to applicable requirements on relocation of branches, extension offices and/or other banking offices;

*Condonation of liquidated damages on past due rediscounting/emergency loans with the BSP and/or monetary penalties for violation of BSP issuances on rediscounting of the eligible rural banks as of the end of the month immediately preceding the date of request for the loan restructuring;

*Restructuring of past due rediscounting/emergency loans of the eligible rural banks with the BSP as of the end of the month immediately preceding the date of request for loan restructuring;

*Waiver of all dividends due on the Land Bank of the Philippines preferred shares of stock of the eligible rural banks as of date of merger and consolidation;

*Staggered redemption of matured Land Bank preferred shares of stock of the eligible rural banks, representing the rediscounting arrearages with the BSP converted into Land Bank equity;

*Rediscount ceiling of at 150 percent of the adjusted capital accounts of the merged/consolidated rural bank for a period of one year reckoned from the date of merger or consolidation; and

*Waiver of monetary penalties imposed on the eligible rural banks for violation of existing laws and BSP rules and regulations, except penalties accruing to other parties.

As part of the arrangement between BSP and PDIC, an SPRB lane was established at the PDIC office to expedite the processing and approval of SPRB applications.

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