The Philippine Deposit Insurance Corporation (PDIC) has expressed support for the Senate and House bills that aim to amend the Rural Banking Act, allowing foreign ownership of rural banks.
According to PDIC President Valentin A. Araneta, the broadening of sources of capital and banking technology implied by the proposed amendments could only serve to increase the range of options for rural banks to strengthen their financial and organizational capabilities.
A law allowing foreign ownership of rural banks will further enhance the initiatives to strengthen the banking sector.
In August this year, the Bangko Sentral ng Pilipinas (BSP) and the PDIC signed the memorandum of agreement on the Strengthening Program for Rural Banks Plus (SPRB Plus), a program that expanded the Strengthening for Rural Banks. SPRB Plus includes thrift banks, commercial banks, and non-bank corporations as among the strategic third party investors (STPIs) entitled to incentives under the program. Under the SPRB Plus Program, certain incentives including branch licenses will be provided by the BSP and PDIC can grant financial assistance to the acquiring thrift and rural banks. This is to broaden STPI participation under the Program and promote successful banking partnerships.
The SPRB Plus aims to strengthen the thrift and rural banking industry to improve the delivery of financial services that will help sustain countryside development. The Program will be available until December 31, 2013.
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The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing permanent and continuing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.
PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.