P5-B rural banks support approved

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has given final notation of the proposed memorandum of agreement (MOA) with the Philippine Deposit Insurance Corp. (PDIC), signaling the implementation of the P5-billion Strengthening Program for Rural Banks (SPRB).

The memo on the MOA, which was submitted by the BSP Department of Loans and Credit to the Monetary Board last week, has requested final notation to launch the program in the fourth quarter. The MOA was dated August 3.

The guidelines on the grant of regulatory relief under the SPRB, which would form part of the SPRB Implementing Guidelines to be issued by the PDIC, was also noted.

Based on the memo, regulatory relief includes conversion of existing offices of the merging rural banks, condonation of liquidated damages and restructuring of past due loans with the BSP, such as rediscounting and emergency loans.

The approved guidelines specifically noted that rural banks participating in the program may avail of the following eight perks.

*Conversion of the existing head offices, branches and/or extension offices of the merging or consolidating rural banks into head office, branches or extension offices of the merged/consolidated rural bank;

*Relocation/opening of existing/approved but unopened branches, extension offices and/or other banking offices of the merged/consolidated rural bank within two years from date of merger or consolidation, subject to applicable requirements on relocation of branches, extension offices and/or other banking offices;

*Condonation of liquidated damages on past due rediscounting/emergency loans with the BSP and/or monetary penalties for violation of BSP issuances on rediscounting of the eligible rural banks as of the end of the month immediately preceding the date of request for the loan restructuring;

*Restructuring of past due rediscounting/emergency loans of the eligible rural banks with the BSP as of the end of the month immediately preceding the date of request for loan restructuring. (LCC) –Manial Bulletin