BSP approves increase in minimum capitalization of rural banks

ABS-CBN News

Posted at Sep 02 2022 10:44 AM

MANILA - The Bangko Sentral ng Pilipinas on Friday said it has approved an increase to the minimum capitalization of rural banks.

The move, which is part of the Rural Bank Strengthening Program (RBSP), will enable rural banks to enhance risk management systems, upgrade resources and manage operational costs, meet prudential standards, and accelerate digital transformation, the central bank said in a statement. 

The minimum capital level of rural banks are revised as follows:

  • P50 million for head office only and those with up to 5 branches
  • P120 million for those with 6 to 10 branches
  • P200 million for those with over 10 branches

“The revised minimum capital requirements shall result in stronger and well-capitalized rural banks underpinning a Philippine banking system that is stable, sound, resilient and inclusive for Filipinos,” BSP Governor Felipe Medalla said.
 
“With a strengthened capital base, rural banks would be able to withstand adverse financial shocks and at the same time, tap opportunities to enhance income potential, expand banking operations, and provide better credit facilities and services responsive to the needs of their clients and the banking public,” he added.
 
The BSP said affected rural banks have 5 years to comply with the new minimum capital requirements by referring to the available options such as mergers or consolidation, acquisition or third party investment, voluntary exit or upgrade of banking license, capital build up program and supervisory intervention.

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