NextGen Day

The House of Representatives unanimously approved a bill on Monday that allows cooperative banks to be registered, regulated, and operated.

House Bill 9541, which provides for the establishment, management, and regulation of cooperative banks under the supervision of the Bangko Sentral ng Pilipinas as a primary regulator, was approved by a total of 156 lawmakers during the plenary session, in accordance with the provisions of the General Banking Law of 2000.

The measure aims to increase the number of cooperative banks by allowing foreign cooperatives to join the sector, provided that foreign cooperatives do not possess more than 40% of a cooperative bank’s total outstanding voting shares.

It will allow cooperative banks to provide a wide range of financial services, including credit extension, deposit taking, discounting and rediscounting, correspondent banking, debt securities trading, acting as a collection agent, dealing in foreign exchange transactions, acting as a government depository, and conduit bank for government lending programs, and participating in government allocation programs aimed at promoting financial inclusion.

The proposed legislation would also allow cooperative banks to invest in equities of allied undertakings such as banks, financial institutions, and non-bank financial intermediaries; warehousing and other post-harvest facilities; distribution of farm implements and equipment; agricultural product transportation, leasing, ATM network operations, public transportation, and financial technology.

The measure restricts a cooperative bank’s lending ability by limiting private borrowings to a maximum of 25% of the bank’s unaffected capital and surplus.

It aims to provide cooperative banks with benefits and privileges such as exemption from all national and local taxes, fees, and charges imposed by the Cooperative Code and related laws, subject to certain conditions; exemption from publication requirements on foreclosed lands; and exemption from maximum landholding limits imposed by existing agrarian laws.

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