The Bangko Sentral ng Pilipinas (BSP) said on Wednesday it supported the adoption of a measure to streamline regulatory requirements for cooperative banks.
“BSP supports the Cooperative Banking Bill in line with our commitment to further promote a vibrant cooperative banking sector and to foster the growth of rural economies,” BSP Governor Benjamin Diokno said in a statement.
Filed on May 31, 2021, House Bill 9541 harmonizes the regulation of cooperative banks conducted by the BSP and the Cooperative Development Authority (CDA).
The bill provides that cooperative banks will be placed under the supervision of BSP, but CDA will continue to monitor their compliance with cooperative laws and regulations.
For governance rules, the provisions of banking laws, rules and regulations shall prevail.
In addition, the bill grants incentives and privileges to encourage the formation and organization of cooperative banks; and provides rules on the registration, regulation and operation of such financial institutions, in accordance with the BSP.
The bill also expands the definition of cooperative bank membership, which is currently limited to cooperative organizations and associations, the central bank said.
“Legislative reform should further promote the security and soundness of the country’s cooperative banking sector,” Diokno said.
The BSP chief said the central bank looks forward to continuing to coordinate with Congress, CDA and the cooperative banking sector on the passage of the bill.
The bill defines cooperative banks as those organized for the primary purpose of providing a wide range of financial services to cooperatives, their members and the public. – VBL, GMA News