MANILA, Philippines — A bill still pending in Congress will make it easier for co-operatives to set up their own banks and help spur economic development in rural areas, the central bank said Wednesday (October 20th).
The Bangko Sentral ng Pilipinas (BSP) said it supports the immediate passage of the Cooperative Banks Bill, which aims to streamline regulatory requirements for these financial institutions.
“BSP supports the Cooperative Banking Bill in line with our commitment to further promote a vibrant cooperative banking sector and foster the growth of rural economies,” BSP Governor Benjamin Diokno said in a statement.
Filed in May 2021, Bill 9541 harmonizes the regulation of cooperative banks implemented by the BSP and the Cooperative Development Authority (CDA).
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.
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 the rules of governance, the provisions of laws, regulations and banking regulations shall prevail.
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.
The bill also expands the definition of membership in cooperative banks, which is currently limited to cooperative organizations and associations.
“The legislative reform should further promote the security and soundness of the country’s cooperative banking sector,” Diokno said.
The BSP chief said his agency looked forward to continuing coordination with Congress, CDA and the cooperative banking sector for the passage of the bill.
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