State-run Philippine Deposit Insurance Corp. (PDIC) said two groups involving a total of 10 rural banks have applied for the Consolidation Program for Rural Banks (CPRB).
CPRB is a bank strengthening program that aims to bring about a stronger and less fragmented banking system and provide opportunities to enhance rural banks’ business prospects and ability to face increased competition.
It is a tripartite program of the PDIC, Bangko Sentral ng Pilipinas (BSP), and Land Bank of the Philippines that was launched in August last year to encourage consolidation among rural banks to improve financial strength and enhance their viability.
Rural banks that avail of CPRB will receive assistance in financial advisory, business process improvement, and capacity building.
These include training on credit evaluation and administration, audit and internal control, personnel management, accounting/record keeping, treasury, information technology, and governance.
LandBank may also provide equity participation, while the BSP will observe full flexibility in the grant of incentives to participating banks.
Proponent banks that form a group of at least five rural banks with head offices or majority of branches located within the same region or area are eligible to avail of the CPRB.
A rural bank with head office in a nearby region may also apply, provided that all program objectives are met.
PDIC President Cristina Que Orbeta expressed optimism that more rural banks will soon avail of the CPRB and maximize its benefits for their expansion and institutional strengthening.
“I trust that more banks will see CPRB as a beneficial program for the whole rural banking industry and will therefore take advantage of this opportunity,” she said.
The PDIC assured the depositing public that consolidation among banks will be beneficial to the industry and will strengthen the banking system.
While consolidation reduces the number of operating banks, the CPRB ensures that the remaining consolidated banks are financially stronger with higher capital bases, and equipped to provide improved services to depositors in terms of upgraded facilities, expanded banking products, and enhanced management and governance.
The applications from these rural banks signify their recognition of the advantages to be gained from CPRB in improving their business capabilities and diversifying their respective markets, the PDIC said.
“Interested rural banks may visit the PDIC website, www.pdic.gov.ph, to view the salient features, implementing guidelines and documentary requirements of the CPRB,” it added.