Vision to become the leading national coop bank hits a snag

VISION TO BE THE LEADING NATIONAL COOPERATIVE BANK HITS A SNAG

The dream of a Metro-based cooperative bank, to become the leading national cooperative bank by 2014 may not become a reality soon, or as expected.

This is unless the Bangko Sentral ng Pilipinas (BSP) and the Cooperative Development Authority (CDA)(the regulating agencies for this type of cooperative) are able to reconcile in the immediate future the apparent contradiction between the cooperative bank's vision and the present provisions of the Philippine Cooperative Code of 2008.

The item in question is found in Article 97 (l), Chapter XII of R.A. 9520. Among other things, this provision says that, and we quote: " xxx Only one cooperative bank may be established in each province, Provided, That an additional cooperative bank may be established in the same province to cater to the needs of the locality depending on the economic conditions of the province as may be determined by the BSP, Provided further, That the additional cooperative bank shall be located in the City or Municipality other than the City or Municipality where the first cooperative bank is located..xx"

Currently and prior to the enactment of R.A. 9520, this Metro-based cooperative bank has over 800 cooperative organizations, as members from all around the country. As part of its strategic plan, it aims to boost the growth of the cooperative bank via an aggressive membership recruitment campaign. And in the process, it also aims to further widen its capital base.

According to reports, this cooperative bank was already granted approval by the BSP for the former's amendments in its Articles of Cooperation and By-laws, to implement its vision to be the leading national cooperative bank sometime in 2007 yet. With this, it can now recruit members from anywhere in the country. The said amendments were also to be approved by the CDA, where the same is allegedly pending since November 2009. CDA, reportedly, is hard put in finding the legal bases to support any action to approve said amendments.

In the meantime, the cooperative bank's expansion program had hit a snag, hopefully only momentarily. Until things are finally ironed out, the cooperative organizations outside of the Metropolitan Manila Region who are waiting to become members of this cooperative bank, are now considered in the meantime as "coop depositor/borrower," instead of bona fide members. The cooperative bank's capital build-up, including its planned sale of preferred shares is also apparently affected.

It may be noted that the BSP issued last February 15, 2010 the implementing rules of Chapter XII of R.A. 9520. Contained in the BSP Circular No. 682, series of 2010, are basically the same prohibition contained in Article 97 of Chapter XII of R.A. 9520, this time reflected on Section 7 of the abovecited BSP Circular.

As of December 2009, the assets of the cooperative bank are reported to have reached P1-billion, 6% higher than that in 2008; networth rise by around P77-million. On the other hand, its paid-up capital rose by 19% with new and additional capital raised by the bank amounted to about P37-million.

So, will this cooperative bank's vision ultimately become reality, or just remain a dream? Let's watch and see. Your comments are welcome. (End)

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