BSP Lifts Bank Branching Limit
By LEE C. CHIPONGIAN
June 3, 2012, 9:22pm
MANILA, Philippines --- The Bangko Sentral ng Pilipinas (BSP) has lifted
the limit on the number of branches that banks can apply for in a move
that will further encourage mid-sized commercial banks to expand their
banking networks.
BSP Governor Amando M. Tetangco Jr. signed Circular No. 759 which
amended the bank branching policy last week.
The revised bank branching policy has also extended the number of years
that banks must open new branches or banking offices to three years from
just 12 months.
The BSP currently sets a limit of five new branches per bank at any
given time and implements a strict years from the date of approval and
Tetangco said appeal for extensions will not be entertained.
However, approvals for new branches may be revoked if the BSP could
determine that a bank's capital will no longer sufficiently support the
establishment of new branches or the bank has supervisory problems to
land in the prompt corrective action program, which is where banks with
capitalization problems are placed.
The BSP is supervising 730 banks, of which 38 are the big-capitalized
universal and commercial banks. There are 71 thrift banks and 617 rural
banks.
As of December 2011, the total banking system has branches and offices
numbering 8,324. This number excludes non-banking financial institutions.
The new circular complements the BSP's liberalization of the bank branch
policy that it started in 2011.
Last year, the BSP lifted the 15-year moratorium on bank branching in
the eight restricted areas in Metro Manila. By July 1, 2014, the eight
restricted areas will be fully opened up.
BSP Circular 728 which liberalized bank branching will be done in two
phases. Initially the Monetary Board has approved the partial lifting of
the branching restriction in the cities of Makati, Mandaluyong, Manila,
Paranaque, Pasay, Pasig, San Juan and Quezon City.
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