NGO banks slapped DOSRI limit
By LEE C. CHIPONGIAN
June 20, 2011, 2:08am
MANILA, Philippines — The DOSRI (directors, officers, stockholders and related interests) ceiling will now apply to the loans of the 18 central bank-monitored microfinance-oriented banks with related non-government organizations/foundations (NGOs) in a move that will tighten customer savings protection.
The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has approved Circular No. 725, signed by BSP Governor Amando M. Tetangco Jr. last June 16, which will now subject microfinance-oriented banks’ NGOs/foundations under existing regulations governing DOSRI loans. These NGOs/foundations, while classified as non-stock and non-profit organizations, offers financial assistance to its customers.
The BSP’s Manual of Regulations for Banks (MORB) defines ‘related interest’ as any ‘corporation, association or firm which a director or officer of the bank or his spouse is also a director or officer of such corporation Based on this definition, the BSP deemed it appropriate to impose the DOSRI limit to related NGOs/foundations.
All loans, other credit accommodations and guarantees to such related NGO/foundation will be included in determining a related bank’s compliance with DOSRI caps, which is 10 percent and five percent for unsecured limits, and aggregate 20 percent limit on loans.
The existing 18 microfinance-oriented NGOs/foundations which are engaged in microfinance by regulated financial institutions, are uniquely homegrown, said the BSP in a memo to the Monetary Board. The adoption of this approach to microfinancing has expanded the microfinance program without regulatory restrictions such as minimum capital requirements.
The 18 thrift and rural banks with related NGOs/foundations includes Opportunity Kausawagan Bank Inc. (IloIlo City), Dungganon Bank (Bacolod City), Vision Bank (Catanduanes), CARD Bank (San Pablo City, Laguna) and Xavier-Tibod Bank (Cagayan de Oro, Misamis Oriental).
Of the 18, 13 are rural banks: Rural Bank of Sto. Tomas (Batangas) Inc., Enterprise Bank (Linga, Surigao del Sur), Lifebank Inc. (Maasin, IloIlo), People’s Bank of Caraga (San Francisco, Agusan del Sur), New Rural Bank of San Leonardo (Nueva Ecija), Rural Bank Talisayan (Misamis Oriental), Gulf Bank (Lingayen, Pangasinan), Rural Bank of Guinobatan (Albay), Bangko Kabayan (Ibaan, Batangas), Producers Bank Inc. (Cabanatuan, Nueva Ecija), Women Rural Bank (Rosario, Batangas), Progressive Bank (Balasan, IloIlo City), and Rural Bank Atimonan (Quezon).
The BSP, in a press statement last Friday, said it has issued general governance principles and standards covering the business relationships of banks and their related NGOs/foundations.
“Over the years, an increasing number of banks have tried to create synergy in having affiliated NGOs/foundations as their partners in providing complementary microfinance operations primarily to prepare low-income customers for formal banking relationships,” said the BSP
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CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com http://phildevfinance.wordpress.com
CONSULTING - http://www.carlosani.com
My Clippings - http://www.myclipps.posterous.com
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