The Bangko Sentral ng Pilipinas (BSP) has eased the rules on microfinance-oriented thrift or rural banks looking to upgrade to regular thrift or rural bank subject to the submission of a particular standard.
In its most recent Circular 929, Series of 2016, the Monetary Board approved the amendments to the manual of regulation for banks allowing the conversion of microfinance-oriented thrift banks and rural banks to regular thrift and rural banks.
Prior to the circular, microfinance-oriented banks were ineligible to convert to any type of regular bank.
The BSP said microfinance-oriented thrift and rural banks are now allowed to convert to regular banks provided they comply with all the requirements of a regular thrift or rural bank license holder.
They are also required to submit particular documents, including a certification signed by the president or officer of equivalent rank.
The certification must state that the allocation of at least half of the gross loan portfolio to microfinance is no longer feasible due to market conditions.
This claim must also be supported by an accompanying market study citing changes in demographic, social and economic factors, plus strategic plan and business strategy with regard to the conversion to a regular bank.
A microfinance-oriented thrift and rural bank wishing to convert should submit certified true copies of the resolution of the bank’s board of directors authorizing the conversion of the microfinance oriented-bank into a regular bank.
“The bank must also change its business name to reflect its reclassification to a regular bank,” the central bank said.
The circular becomes effective 15 calendar days after publication in the official gazette or newspaper of general circulation.