By Joann Santiago
MANILA, July 22 (PNA) — A Php 25-million fund has been set aside to support the inter-agency conceptualized Consolidation Program for Rural Banks (CPRB), a program aimed at further strengthening the rural banking sector.
The fund will be provided by the Countryside Financial Institutions Enhancement Program (CFIEP), a joint-program of the Bangko Sentral ng Pilipinas (BSP), Land Bank of the Philippines (Landbank) and the Philippine Deposit Insurance Corp. (PDIC).
It will support financial advisory, business process improvement, and capacity-building support services.
BSP’s policy-making Monetary Board (MB), in its meeting last June 18, approved-in-principle the CPRB, which was conceptualized also with the PDIC and Landbank to encourage mergers within the industry.
The program will be available for two years upon the signing of the Memorandum of Agreement (MOA) among the regulators, the central bank said.
”This is a new program designed to encourage smaller, normally operating banks to merge to achieve more competitive scale,” BSP Deputy Governor Nestor Espenilla Jr. said.
He said five or more banks need to agree to merge or consolidate to avail of the program.
To date, there are about 512 RBs in the country.
Asked about CPRB’s difference with the Strengthening Program for Rural Banks Plus (SPRB Plus), Espenilla said the former is targeted to potentially cover more banks.
SPRB Plus, which is an enhanced version of the SPRB, is a program targeted to encourage merger and consolidation among big banks and their smaller counterparts.
SPRB was introduced by the BSP and PDIC in 2010 to help ailing rural banks and encourage consolidation among the financial institutions to form stronger financial institutions and address problems of some weak banks, which when unable to get a lift from stronger banks decide to close down.
It was initially targeted to end in December 2013 but was extended by another year and renamed SPRB Plus to accept more applicants. (PNA)