The government has extended for two more years the incentives given to rural bank mergers, the state-run Philippine Deposit Insurance Corp. (PDIC) has announced.
“Consistent with the objectives to bring about more resilient rural banks and a less fragmented banking system by encouraging rural banks to merge or consolidate, the PDIC, the Bangko Sentral ng Pilipinas, and the Land Bank of the Philippines have approved the re-launch of the Consolidation Program for Rural Banks (CPRB),” said PDIC president Roberto B. Tan in a bulletin issued to member-banks.
Launched in 2015, the CPRB lapsed in August 2017.
Tan said the extended CPRB will run from October 26, 2017 until October 26, 2019.
“Under the CPRB, merging or consolidating banks may avail of support for financial advisory and business process improvement services, capacity building, and other program support,” Tan said.
Under the expanded CPRB’s rules, the incentives will be granted to proponent banks comprised of at least five rural banks, whose head offices or the majority of branches are located in the same region or area.
The resulting bank must have a capital adequacy ratio (CAR) of 12 percent, as well as a combined unimpaired capital not less than P100 million, the PDIC said.
But “if the proponent banks are less than five but based on the submitted documents, the Resulting
Bank will have CAR of at least 12 percent and a combined unimpaired capital of at least P100 million, the application may be accepted,” according to the PDIC. /kga