Foreign ownership in rural banks gets BSP backing
THE BANGKO Sentral ng Pilipinas (BSP) supports a Senate bill seeking to allow foreigners to own up to 40% of rural banks, a ranking central bank official said, noting the need to shore up investments in financial institutions serving the people in the countryside.
“We support the proposal,” BSP Deputy Governor Nestor A. Espenilla, Jr. said in a text message at the weekend, pertaining to Senate Bill (SB) 3089 filed by Sen. Edgardo J. Angara that seeks to amend Republic Act (RA) 7353 or the Rural Act of 1992.
The bill seeks to allow foreigners to “own, acquire, or purchase up to 40% of the voting stock of a rural bank.”
RA 7353 does not allow foreign ownership in rural banks.
Mr. Espenilla said the bill’s enactment will address the need for more investments in financial institutions servicing the unbanked and underbanked sectors in rural areas.
“It’s an opportunity for rural banks to take in strong partners that can provide additional capital for expansion as well as new technology and systems that will enhance competitiveness,” he said.
“From BSP standpoint, the potential diversification of ownership will also promote better corporate governance,” the central bank official added.
Amending RA 7353 is one of the priorities of the Senate banks, financial institutions and currencies committee chaired by Sen. Sergio R. Osmeña.
The House of Representatives has approved its own version, leaving it up to the Senate to act on the initiative.
Rural Bankers Association of the Philippines (RBAP) President Ian Eric S. Pama on Friday said his group supports the bill, saying its enactment will “level the playing field with with our commercial and thrift bank counterparts.”
RA 8791 or the General Banking Act of 2000 allows commercial and thrift banks to have foreign investors. -- Antonio Siegfrid O. Alegado
The bill seeks to allow foreigners to “own, acquire, or purchase up to 40% of the voting stock of a rural bank.”
RA 7353 does not allow foreign ownership in rural banks.
Mr. Espenilla said the bill’s enactment will address the need for more investments in financial institutions servicing the unbanked and underbanked sectors in rural areas.
“It’s an opportunity for rural banks to take in strong partners that can provide additional capital for expansion as well as new technology and systems that will enhance competitiveness,” he said.
“From BSP standpoint, the potential diversification of ownership will also promote better corporate governance,” the central bank official added.
Amending RA 7353 is one of the priorities of the Senate banks, financial institutions and currencies committee chaired by Sen. Sergio R. Osmeña.
The House of Representatives has approved its own version, leaving it up to the Senate to act on the initiative.
Rural Bankers Association of the Philippines (RBAP) President Ian Eric S. Pama on Friday said his group supports the bill, saying its enactment will “level the playing field with with our commercial and thrift bank counterparts.”
RA 8791 or the General Banking Act of 2000 allows commercial and thrift banks to have foreign investors. -- Antonio Siegfrid O. Alegado
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