BSP accredits 8 Rural Banks
By Lee C. Chipongian
Published: June 17, 2013
The Bangko Sentral ng Pilipinas (BSP) has approved and listed eight
rural and thrift banks as accredited rural financial institutions
(ARFIs) under the amended Agri-Agra law (Republic Act 10000).
Banks certified as ARFIs meant that the loan portfolio of these banks
have been found to be compliant with BSP regulations and under the
provisions of RA 10000.
BSP Deputy Governor Nestor A. Espenilla Jr. said however that the
accreditation "does not serve as an endorsement by the BSP" but merely
an indication that the eight rural banks passed qualification requirements.
The eight rural and thrift banks are Rural Bank of Kiamba, Producers
Savings Bank, Rural Bank of Barili (Cebu), Rural Bank of Sta. Catalina,
Philippine Resources Savings Bank Corp., Rural Bank of Pilar (Bataan),
Common Wealth Rural Bank and Rang-Ay Bank Inc. Four of these eight banks
have been previously accredited last year.
"The accreditation cannot be used for any purpose other than for
implementing the provisions of the Agri-Agra law (Agri-Agra Reform
Credit Act of 2009) and its related rules and regulations," said Espenilla.
A memo from the BSP clarified that under existing regulations, the
lending or investing bank is required to disclose its Agri-Agra report
to ensure that the said ARFI should be lending or investing to utilize
its exposure for Agri-Agra compliance.
"Such exposure to the ARFI will be eligible for determining compliance
with the agri-agra requirement for as long as the ARFI remains
accredited with the BSP," said Espenilla.
The BSP amended its circular detailing the rules and regulations of RA
10000 which repealed Presidential Decree 717 in 2011 and listed
alternatives for banks for easier compliance such as investments in
housing and education/medical bonds and microbusinesses even if these
are not agri-agra related.
The new law has rationalized compliance by banks. It has retained the
mandatory requirement of 25 percent that banks will set aside as
loanable funds for agriculture and fisheries. Of the 25 percent, 10
percent are for agrarian reform-related loans.
In rationalizing modes of compliance, aside from the direct compliance
through loans to qualified borrowers, the alternative loans are
wholesale lending to and/or investments in ARFIs, investments in bonds
that are declared eligible by the Department of Agriculture (DA) in
consultation with the Department of Agrarian Reform, loans for
construction and upgrading of infrastructure that will benefit the
agri-agra as well as loans to the National Food Authority (NFA) and
NFA-registered warehousemen, millers and wholesalers.
The BSP will approve and list the ARFIs while the DA will accredit
non-bank rural financial institutions such as cooperatives, microfinance
non-governmental organizations, among others.
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