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July 21, 2024

BSP bares rural bank rescue program anew

The Bangko Sentral ng Pilipinas on Thursday announced the revival of a program designed to catch problematic and financially ailing rural banks long before they fall over and die.

The program is called the Rural Bank Strengthening Program (RBSP), essentially a time-bound bank rescue mechanism preventing ailing rural lenders from going bankrupt and taking hard earned depositor money with them.

According to BSP Governor Benjamin E. Diokno, the policy-making Monetary Board voted to implement the program which will run for three years from date of approval.

Under the program, eligible rural lenders elect to undergo the program that encourages them to merge and consolidate, be acquired or take third-party investment, voluntarily exit or upgrade its license, buildup its capital or accept regulatory intervention.

“Qualified rural banks that successfully complete the first four tracks may avail of various incentives and capacity-building interventions as determined by the BSP.

“Incentives may include support for digitalization, financial advisory, prudential relief or support measures, and fiscal incentives, which will be carried out in partnership with relevant agencies and multilateral development partners, such as the Asian Development Bank,” it said on Thursday.

The regulator is even now reviewing the minimum capital requirements of rural banks consistent with the goals of the RBSP.

“The BSP will also conduct further stakeholder consultations to promote the RBSP and enable rural banks and interested parties to assess their willingness and capacity to adhere to the requirements of the program,” it said.