The Rural Bank of Dulag, Leyte. (photo by RB Dulag)
DULAG, Leyte – The Rural Bankers Association of the Philippines (RBAP) is seeking amendments of the law regulating countryside banking, citing unfair policies that triggered closures of several branches in the past 10 years.
In a press briefing here Monday, RBAP president Armando Bonifacio said 139 banks have shut down its operations since 2009, where 22 of which are the only banks in their areas, adding up to the list of unbanked areas in the country.
Since the 1950s, when rural banks started to flourish, Bonifacio said there were about 1,800 banks in the country. Today, the number dropped to around 460. In Eastern Visayas alone, 70 percent of towns have no banks.
“Rural banks are at the forefront because they are serving countryside, but we found out that there are some revisions in the Banking Act that are not implemented,” Bonifacio told reporters in a meeting in this town.
Key RBAP officials had a dialogue with Leyte (2nd District) Rep. Henry Ong, chairman of the House committee on banks and financial Intermediaries, to present the proposed revision in the Rural Act of 1992.
Rural bankers seek to promote comprehensive rural development, financial inclusion, and formulation of necessary rules and regulations.
“Stringent regulations imposed on big banks are also applied to rural banks. In most cases, the BSP closes a rural bank due to mismanagement. Under the law, if there are irregularities, BSP should step in until new set of board of directors is called,” Bonifacio said.
Ong said he will create a technical working group to come up with a draft House resolution amending some provisions of bank law enacted into the appeal of the rural bank sector.
“We need to study the issue of our rural banks and attune it to their needs especially that countryside development starts with them. The economy in the countryside is affected if there are no rural banks since people just spend their money instead of keeping it in banks,” Ong added.
This the first dialogue by rural bankers with a lawmaker initiated by Leyte-Samar-Biliran Federation of Rural Bankers led by its president, Anacleta Aboyme. The group also asked other federation presidents to seek support from their respective district representatives.
Rural banks are the more popular type of banks in rural communities. Their role is to promote and expand the rural economy in an orderly and effective manner by providing the people in rural communities with basic financial services.
These banks help farmers through the stages of production, from buying seedlings to marketing of their produce, according to BSP. (PNA)
