|
The Rural Bankers Association of the Philippines (RBAP)
has asked the Bangko Sentral ng Pilipinas (BSP) for regulatory
relief from raising their capital in compliance with international
accounting standards.
“It costs more for financial
institutions to comply with the regulations,” Thomas Gomez, RBAP
president, said during the induction of the group’s officers for
this year.
Regulators have required banks to
shift to international accounting standards and adopt tighter
banking standards next year, which would need to raise capital to
meet the regulatory requirements.
In terms of capital adequacy
ratio (CAR), the BSP requires all banks to meet the minimum
requirement of 10 percent.
Rural banks’ CAR, however, have
remained above the minimum requirement which posted 15.7 percent
last year.
CAR is a risk-sensitive measure
of a bank’s solvency. It relates capital to assets weighted
according to their relative risks.
Large rural banks can comply with
CAR, according to BSP. The number of rural banks totaled 727 as of
the first quarter of the year.
Rural banks, which are largely
privately owned, provide credit facilities to farmers and merchants,
or their cooperatives, and in general to the people in countryside
communities.
For rural banks, the BSP requires
minimum capitalization of P2.6 million for fifth and sixth class
municipalities and P26 million within Metro Manila.
BSP has allowed rural banks to
expand their products and services such as the authority to operate
foreign currency deposit units.
Rural banks also have a distinct
advantage to compete in the remittance business at the final mile by
virtue of their close contact with countryside customers.
BSP Governor Amando Tetangco Jr.
said rural banks exhibit robust asset growth and strong capital
build-up.
--Maricel E. Burgonio
|
