Rural banks opened to foreigners
FOREIGNERS can now take majority stakes in rural banks after President Benigno S.C. Aquino III approved changes to a law that had limited ownership to Filipinos.
Deputy Presidential Spokesperson Abigail F. Valte said the amended law complements the Bangko Sentral ng Pilipinas’ efforts to strengthen rural banks, many of which have collapsed due to mismanagement.
Mr. Garcia agreed, saying: “When you talk about banks, you always need two components — good governance and capital. At least, capital portion may be addressed by this legislation.”
“Now that foreign investments are allowed, rural banks are now in a better financial position to reach out and serve both the unbanked and under-banked through improved banking services,” he added.
Mr. Garcia claimed that several financial institutions had already expressed interest in rural bank stakes.
The new law allows non-Filipinos to sit on the bank’s board.
RA 10574 also clarified land ownership provision in the old law.
“Rural banks which are not qualified to acquire or hold land in the Philippines shall be allowed to bid and take part in foreclosure sales of real property mortgaged to them, as well as to avail of enforcement and other proceedings, and accordingly to take possession of the mortgaged property, for a period not exceeding five years from actual possession…,” it states.
Rural banks that acquire mortgaged property must transfer these to a qualified Philippine national.
By law, foreigners are not allowed to own land in the Philippines. — N. M. Gonzales
Article lifted from BusinessWorld website: http://www.bworldonline.com