The Bangko Sentral ng Pilipinas (BSP), the Philippine Deposit Insurance Corp. (PDIC) and the Land Bank of the Philippines recently approved the revival of the program that aims to strengthen cooperative banks.
In a statement, the central bank said that the Strengthening Program for Cooperative Banks (SPCB) has been amended and enhanced “to promote mergers and consolidations with and acquisition of cooperative banks by strong partners.”
Available until September 17, 2014, the SPCB Plus will replace the original SPCB Module II which expired on August 3, 2012.
“The SPCB Plus expands the eligible Strategic Third-Party Investor [STPI] or so-called white knights to include strong and well-managed rural banks and thrift banks, whether or not majority owned by cooperative banks and commercial banks,” the BSP stated.
The monetary authority added that the program aims to further strengthen the cooperative banking system, boost confidence in the banking system, and improve the delivery of financial services to the countryside and rural communities.
“The SPCB Plus offers a variety of financial and regulatory reliefs and incentives to improve the prospects of new banking partnerships,” the central bank said.
It added that financial assistance may be granted by PDIC and LandBank to boost capital shortfalls and provide income support to the surviving banks.
“BSP has also put on the table a package of regulatory reliefs and branching incentives for the eligible STPIs,” the central bank said.
Through the program, eligible STPIs are expected not only to sustain and strengthen the financial condition of surviving banks, but also to improve their quality of corporate governance and management.
The BSP further reported that the program received a strong interest from a number of industry players, noting that as of October 2013, five applications involving 19 cooperative banks have been received.