One of the leading proponents of opening up the rural banking industry to foreign ownership made several important points on why active foreign participation will not only enable rural banks, which have been present for 60 years, to better compete with its bigger brethren, but also further improve rural banks’ line of services for its target market.
Sen. Sergio Osmeña 3rd, sponsor of Senate Bill (SB) 3282, or “An act allowing infusion of foreign equity in the Capital of Rural Banks, amending Republic Act [RA] 7353, otherwise known as The Rural Banks Act of 1992, as amended and for other purposes,” said during a recent sponsorship speech at the Senate that rural banks need to comply with international capital standards, expand and improve their competitiveness, and channel more resources and increased investments for the benefit of the unserved and the underserved.
“Rural banks need to look beyond their limited resources and take advantage of funds available elsewhere. The opportunity to forge international equity partnerships will put rural banks on a level playing field with its thrift and commercial bank counterparts that are able to take in foreign partnerships,” he said.
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