Another scheme to strengthen cooperative banks is being considered by the BSP
Another program targeted at strengthening cooperative banks (coop banks) is currently “under discussion,” according to Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP).
Diokno said the central bank approved a strengthening program for cooperative banks in August 2011, referring to the Strengthening Program for Cooperative Banks, during a virtual briefing aired through the BSP’s Facebook page on Wednesday (SPCB).
After a one-year extension, the five-year initiative ended in September 2016, with the goal of improving the industry through mergers and consolidation, as well as permitting “white knights” to acquire barely surviving cooperative banks.
White Knights is a third party that will buy smaller cooperative banks or those in need of capital.
The program’s goal is to keep the sector robust so that it can continue to serve local communities and be a catalyst of growth in rural areas.
Only three deals materialized, according to Diokno, but the original five-year program was extended for a year by an agreement between the BSP, the state-owned Land Bank of the Philippines (Landbank), and the Philippine Deposit Insurance Corp. (PDIC).
“However, through the current tripartite technical working group and frequent meetings with banks, we continue to coordinate with the cooperative banking industry to identify difficulties and obstacles,” he added.