THE Bangko Sentral ng Pilipinas (BSP) is working on a framework that will improve rural banks’ ability to provide necessary financial services to the agricultural sector and micro, small and medium enterprises (MSMEs) in the country.
BSP Governor Benjamin E. Diokno said last Thursday the central bank is currently reviewing current rural bank data in the country and will conduct an in-depth study on rural banks to identify areas of intervention.
Diokno said in an online briefing they expect that by the end of this year, the Inter-Agency Working Group (IWG) would come up with “policy recommendations and strengthening programs.”
The effort is part of the recently launched “Rural Banking Industry Strengthening Program,” or RBSP, in March this year.
The RBSP is the latest initiative carried out by the central bank after several ones: the Consolidation Program for Rural Banks (CPRB); CPRB Plus; Strengthening Program for Rural Banks (SPRB); SPRB Plus; and, the Rural Bank Rehabilitation program.
“The RBSP aims to improve the operations, capacity, and competitiveness of rural banks. It also aims to enhance rural banks’ ability to provide necessary financial services to the agricultural sector and MSMEs in rural areas,” Diokno said.
The RBSP IWG is headed by a Steering Committee chaired by Monetary Board Member V. Bruce J. Tolentino.
Aside from the BSP, the Department of Agriculture and the Small Business Corp. under the Department of Trade and Industry are also members of the steering committee.
In the last two years, Diokno said 30 rural banks were part of merger and consolidation transactions. Of the 30, 16 were absorbed by thrift banks. The rest were absorbed or merged with other rural banks.