PDIC dangles perks to prompt mergers among rural banks

MANILA, Philippines – State-run Philippine Deposit Insurance Corp. (PDIC) is urging rural banks to avail of incentives dangled by the Bangko Sentral ng Pilipinas (BSP) to further strengthen the country’s banking industry.

PDIC president Cristina Que Orbeta said rural banks should take advantage of the Consolidation Program for Rural Banks (CPRB) especially in the face of increased competition brought about by the integration of financial markets in the Association of Southeast Asian Nations (ASEAN) region.

 “I trust that rural banks will endeavor to expand their horizons, create the possibilities and opportunities for their business and look at CPRB as a window of opportunity to expedite their decision-making process,” she said.

Orbeta said the program through the Countryside Financial Institutions Enhancement Program of Land Bank of the Philippines would provide funding assistance for financial advisory services, business process improvement services, and capacity-building support services.

These include training on credit evaluation and administration, audit and internal control, personnel management, accounting or record keeping, treasury, information technology, and governance.

Regulatory incentives from the BSP may also be availed of as part of CPRB’s program support.

Rural banks availing of the CPRB are set to benefit from several support services and regulatory incentives to improve their financial strength, enhance their viability, strengthen management and governance, generate synergies and economies of scale, and expand their market reach.

The PDIC chief said the program welcomes any group of at least five rural banks whose head offices or majority of the branches are located in the same region or area.

Rural Banks whose head office is located in a nearby region may also be included, provided that the program objectives are met.

CPRB is a bank strengthening program specifically designed for rural banks to help enhance their viability and ability to promote financial inclusion and financial stability.