Archives for 2013

Time for review

The recent symposium of the Rural Bankers Association of the Philippines (RBAP) held in November centered on relevance for this year’s theme, believing that it is high time to examine the significance of rural banking to the owners themselves, to the clients, community and to regulators. Flags of concern should be hoisted up if any part of this link, the relevance has diminished, or worse, is gone.

For rural banks to remain relevant, Batangas Rep. Nelson P. Collantes, who also chairs House Committee on Banks and Financial Intermediaries, mentioned in his speech the need for Congress to assess and re-evaluate the relevance and practicality of mandatory credit allocation programs such as Republic Act 10000 (otherwise known as the Agri-Agra Law) and Republic Act 9501 (otherwise known as Magna Carta for Micro, Small, and Medium Enterprises).

For one, the RBAP supports the direction of Rep. Collantes’ committee as mandatory credit programs only force banks to compromise best prudent practices in order to comply with the law. Thus, the same should be gradually lowered to a certain percentage that is feasible for banks to comply, with the goal of eventually terminating its mandatory nature in order to promote increased banks’ participation in lending in the sector.

Under Section 6 of the Agri-Agra Law, banks should allocate 25% of their total loanable funds for agriculture and fisheries in general, of which at least 10% should be made available for agrarian reform beneficiaries.

The resultant risks associated with such mandatory loans are then hedged in the form of higher rates. As they are gradually terminated, credit risk on private banks (such as rural banks) are mitigated while participation of Government Financial Institutions, especially the Land Bank of the Philippines (LBP), on Agri-Agra lending should be increased.

While the law provides that excess compliance in agrarian credit may be used to offset a deficiency in the agricultural, the RBAP proposes to allow excess compliance with agricultural requirement be applied to the agrarian requirement.

Meanwhile for the MSME, there is a need to review specifically the provision mandating banks to allocate at least 8% of their loanable amount for micro and small enterprises wherein non-compliance will result in a penalty of no less than P500,000.

Apart from providing infrastructure and social support from the National Government, creating a conducive environment for banks, characterized by strong incentives instead of imposing penalties, would encourage lending to the sector. In effect, this would increase productivity and spur economic activities in the rural areas and more importantly, to achieve financial inclusion.

BSP Issues 10-Piso Bonifacio Commemorative Coin

The Bangko Sentral ng Pilipinas (BSP) today announced the circulation of a ten-piso legal tender coin to highlight the nationwide celebration of the 150th birth anniversary of Filipino patriot Gat. Andres Bonifacio. The BSP has previously issued P1-piso legal tender commemorative coins for the 150th birth anniversary of Dr. Jose Rizal.

Widely regarded as one of the Philippines’ greatest heroes, Andres Bonifacio was a dynamic leader who founded the Katipunan, the nationalistic society that ignited the flames of the revolution which led to the declaration of Philippine independence in 1898.

 The portrait of the Father of the Philippine revolution is etched on the obverse of the coin, along with the markings, “150 years,” “Republika ng Pilipinas” and “2013.” The reverse side, meanwhile, features the BSP seal, the signature of the hero, the Bonifacio monument and the markings, “150 years,” “1863-2013” and “Dangal at Kabayanihan.”

The BSP will produce 10 million pieces of the Bonifacio commemorative coin which has the same size (26.5-millimeters in diameter) and weight (8.70 grams) as the ten-piso coin currently in circulation.

The issuance of the coin was recommended by the BSP’s Monetary Board and approved by the Office of the President.

 

Status Report on Donations to victims of Typhoon Yolanda

Dear rural bankers,

As of December 17, 2013, 12noon, the total cash donations that we have received is PhP2,452,715.65 coming from 60 RB owners and various Federation and Confederation.
Total amount of donation distributed to various rural bank’s employees amounted  to PhP1,494,000.00.
Total remaining RBAP Yolanda Fund as of Dec. 17, 2013 is PhP958,715.65.
To view the updated list report, please click on this link: DONATION FOR TYPHOON YOLANDA VICTIMS as of Dec. 18, 2013FINAL

 

Thank you.

 

RBAP Secretariat

Land Bank response on Waiver of Inter-branch Fees

Dear rural bankers,

Attached is the reply of Land Bank on our request for waiver of their inter-branch fees, for your reference.

Land Bank response to Inter-branch fees

Cut-off Date for Typhoon Yolanda Donations

Dear rural bankers,

Please be informed that the RBAP Secretariat will continue to receive donations for Typhoon Yolanda victims only until December 17, 2013 (Tuesday). This is to finalize the list of contribution and to facilitate disbursement process to affected rural banks.

We are hoping for your cooperation on this matter.

Thank you.

RBAP Secretariat

Helping the helper

In the wake of the devastation brought by super typhoon Yolanda, the Rural Bankers Association of the Philippines (RBAP) has proposed to some government agencies several rehabilitation measures to help rural banks and their respective staff and clients get back on their feet following the debacle.

In their proposal to the Bangko Sentral ng Pilipinas (BSP), Philippine Deposit Insurance Corp. (PDIC), and the Bureau of Internal Revenue (BIR), RBAP said the requested measures focus on tools that are within the capability of the each respective agencies to implement, and therefore are very much doable.

For the rehabilitation of the bank’s manpower, RBAP requested for direct financial assistance beyond the limits of each affected rural bank’s BSP-approved Financial Assistance Program for bank staff, as well as exemption for each affected bank staff’s deposit accounts from dormancy for five years. For their loan accounts, RBAP proposed a suspension of interest and all charges for five years. The group is likewise asking from the BSP a one-time write-off of one existing loan per bank staff.

For the rehabilitation of rural banks, RBAP recommended the immediate application of BSP’s regulatory relief measures; bank recapitalization by the BSP payable from the 5th to 15th year after the calamity; exemption from all fees due to the regulators for five years, and; extraordinary safeguarding by banks of the existing accounts of each affected rural bank, such as exemption from dormancy for five years for their deposit accounts and suspension of interest and all charges for five years for their loan accounts.

In addition, RBAP requested the PDIC to grant rural banks the ability to service withdrawals up to P500,000 per client, with funds coming from PDIC. This is in recognition that loan payments may be severely curtailed affecting the bank’s cash position. The affected rural bank will eventually repay the PDIC on a staggered basis.

The Association also appealed for PDIC’s assistance in providing extension of the Strengthening Program for Rural Banks privileges to interested affected rural banks; and a suspension of its regulatory fees for five (5) years for affected rural banks.
Meanwhile, from the BIR, the Association is seeking an exemption of affected rural bank staff and clients from income and property taxes for five years; An exemption from estate taxes for the surviving kin of the affected rural bank staff and clients who died from the calamity, and; an exemption of affected rural banks from all local and national taxes for five years.

RBAP has expressed hope that the aforementioned proposals will be granted given the extraordinary circumstances presented in the aftermath of the super typhoon. After all, even the most ardent helpers of the poor sometimes need help themselves.

Summary of Regulatory Relief Granted by BSP to Rural Banks

As a response to RBAP’s proposal for the rehabilitation of rural banks affected by Super Typhoon Yolanda, the Bangko Sentral ng Pilipinas (BSP) granted the following:

For the rehabilitation of the bank’s manpower:

1. Direct financial assistance beyond the limits of each affected rural banks BSP-approved Financial Assistance Program for bank staff as per BSP Memorandum M-2013-050;

2. Extraordinary safeguarding by banks of the existing accounts of each affected bank staff:
a. For deposit accounts – exemption from dormancy for 5 years as per Section X263 of the MORB;
b. For loan accounts – suspension of interest and all charges for 5 years;

3. One-time write off of one existing loan per staff as per BSP Memorandum M-2013-050

For the rehabilitation of rural banks:
1. Banks must apply for immediate application of BSP’s regulatory relief measures;

2. Exemption from all fees due to the regulators for 5 years is allowed to include non-imposition of penalties as per BSP Memorandum M-2013-050;

3. Extraordinary safeguarding by banks of the existing accounts of each affected rural bank
a. For deposit accounts – exemption from dormancy for 5 years
b. For loan accounts – suspension of interest and all charges for 5 years.

4. Restructuring of affected loans rediscounted with other banks including BSP and LBP

For the rehabilitation of the affected rural bank clients
1. Extraordinary safeguarding by banks of the existing accounts of each affected bank client:
a. For deposit accounts – exemption from dormancy for 5 years
b. For loan accounts – suspension of interest and all charges for 5 years.
2. One-time write off of one existing loan per client.

Meanwhile, BSP also extended their temporary regulatory and rediscounting relief to banks with head offices and/or branches affected by Super Typhoon Yolanda in the following form:

For thrift, rural and cooperative banks
a. During a temporary grace period for payment or upon their restructuring and subject to reporting to BSP, exclusion of the loans of borrowers in affected areas, which should have been reclassified as past due loans under Section X306 of the MORB on 8 November 2013 (date Typhoon “Yolanda” hit the country) and those becoming past due up to 31 December 2014, from computation of past due loan ratio; provided that BSP documentary requirements for restructuring of loans for this purpose are waived; provided further that the bank will adopt appropriate and prudent operational controls;

b. Reduction of the 5 percent general loan loss provision to 1 percent for restructured loans to borrowers in affected areas from 8 November 2013 to 31 December 2014;

c. Non-imposition of penalties on legal reserve deficiencies or TBs/RBs/Coop Banks with head office and/or branches in the affected areas incurred starting from reserve weeks ended 14 November 2013 to 15 May 2014 provided these reserve deficiencies can be shown to be calamity related as certified by the bank rather than due to pre-existing conditions;

d. Moratorium without penalty on monthly payments due to the BSP until 30 June 2014 for banks with ongoing rehabilitation programs upon filing of application for extension/rescheduling;

e. For all types of credits extended to individuals and businesses directly affected by the calamity, allowing, subject to BSP prior approval, the booking of allowances for probable losses on a staggered basis over a maximum period of five years on loans outstanding as of 8 November 2013; and

f. Non-imposition of monetary penalties for delays in the submission of all supervisory reports due to be submitted from 8 November 2013 to 30 June 2014.

For all banks
a. Allowing banks to provide financial assistance to their officers and employees who were affected by the calamity even if not within the scope of the existing BSP-approved Fringe Benefit Program (FBP) subject to subsequent submission of request for approval of the amendment to FBP to the appropriate supervision and examination department for regularization.

Home Guaranty Corporation (HGC) Accreditation for Rural Banks

The government, through Vice-President and Housing and Urban Development Coordinating Council (HUDCC) Chair Jejomar C. Binay, reaffirmed its support to rural banks and microfinance institutions in housing loan activities through the Home Guaranty Corporation (HGC) guaranty. To maximize this program, we highly encourage our member rural banks to become an HGC accredited bank.

Uploaded on our website are the requirements in securing a guaranty line from the HGC or you may on this link http://rbap.org/2013/10/announcement-hgc-accreditation-requirements/

Updating Email Addresses


In pursuit of effective communication, we would like to remind everyone to please check your bank’s contact details at www.rbap.org directory.

Make sure that all details are correct and active. Any inaccuracy in your contact details can be picked up by our regulators, which will then assume that your bank received their messages. The Bangko Sentral ng Pilipinas (BSP) uses the email particularly for FRP and WRR concerns. If their emails to you are not received, any error escalates and can result into severe penalties. To avoid this possibility, please check your bank’s details monthly and update (email: yvette_rbap@yahoo.com or recaidoshalie@yahoo.com) immediately of any changes.

Organization of Compliance Officers


We encourage confederations and/or federations to create an organization of compliance officers that will help us analyze the suitability of BSP circulars to our industry. A “one-time” subsidy amounting to P2,000 for federation level and P1,000 for confederation level will be provided to support initial organizational meeting

Bangko Sentral ng Pilipinas (BSP) Organizational Chart for Rural Banks

The BSP Organizational Chart is now uploaded in our website. The chart reflects the structure and key officials of BSP that rural banks are in contact with. To see the chart, please click on this link http://rbap.org/directory/simplified-bsp-organizational-chart-for-rbs/

BSP MEMORANDUM NO. M-2013-055: Standard Coding for PhilPass Transactions

The Bangko Sentral ng Pilipinas (BSP), with its mandate to ensure a safe and efficient payments system, will be implementing a standard transaction coding system in order to properly identify the nature of banks’ funds transfer and payment instructions that are coursed through PhilPass for settlement.

To get a copy of the BSP Memo, please click on this link: BSP Memorandum No. M-2013-055

Sample 1

Sample

BSP Circular Letter No. CL-2013-064: National Banking Week 2014

To: ALL BANKING INSTITUTION
Subject: National Banking Week 2014

Pursuant to Proclamation No. 2250 dated 10 December 1982 (copy attached) designating 1 to 7 January as National Banking Week, all banking institutions and their branches are enjoined to undertake during the period such promotional and publicity-generating activities as advertising, window and counter displays, streamers, distribution of give-aways, raffles and seminar incentives and devices.

The BSP also enjoin the banking industry to promote more vigorously the benefits derived by our communities from banks. They believe it is imperative to convey the important role that banks play in the lives of our people, economy and our country as a whole.

To unify the campaign for our celebration of the National Banking Week 2014, banks are requested to incorporate the theme, “Sa Wasting Pagbabangko, Aasenso Tayo” and the phrase “National Banking Week, 1 to 7 January 2014” in their promotional materials and print advertisements during the period.

A prescribed tarpaulin layout for this campaign may be downloaded here:
National Banking Week 2014_FINAL 3x10

National Banking Week 2014_FINAL 3x10

To download a copy of the BSP Circular Letter, please click on this link: cl064