MikeLigalig.com

By Joan Santiago

The Bangko Sentral ng Pilipinas (BSP) is now ready to receive applications for foreign equity infusions in rural banks after the Monetary Board (MB) approved on August 22, 2013 the law’s implementing rules and regulations (IRR)

BSP Deputy Governor Nestor Espenilla Jr. said the copy of the IRR of Republic Act No. 10574 or “an Act Allowing the Infusion of Foreign Equity in the Capital of Rural Banks” was published on a national daily starting August 29 and will take effect 15 days after.

“In fact we can already start receiving applications even now,” he told PNA in an SMS message.

Under the amended Rural Bank Act of 1992, which President Benigno S. Aquino III signed on May 24, 2013, foreign investors can now have as much as 60 percent stake in a rural bank’s voting stocks.

BSP, in a statement, said the IRR, which was formulated after consultations with stakeholders, is “aimed at revitalizing the rural banking industry and improving the access to banking services in the country’s rural areas.”

It explained that “aside from foreign ownership of RBs, Circular 809 also sets the rules for the number of independent directors for RBs, the membership of elective or appointive official in the RB Board, the foreclosure of lands used as RB loan collateral, the valuation of government-held shares in RBs and the computation of dividend rates on RB shares held by government–owned or -controlled financial institutions.”

It said the central bank “is keen on strengthening the RB industry as part of its efforts to promote financial stability.”

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