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BSP mulls lifting of moratorium on bank branching by yearend |
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By Donnabelle L. Gatdula
The Philippine Star 08/24/2005 The moratorium on bank branching is likely to be lifted by yearend, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said yesterday. Tetangco, however, said that they are still in the process of studying the lifting of the moratorium on new branches. The BSP chief also pointed out that the study to allow banks to put up more branches is "a separate issue from bank consolidation." "We would know after the study if we would lift the moratorium or not. We expect to finish the study within the year. We want to give flexibility to banks that are well-capitalized and well-run," he said. According to Tetangco, they would ask banks for comments. "We will talk to them to get feedbacks," he said, adding that "we want to know if they (banks) would need the lifting (of moratorium of bank branching) to expand in terms of reach." Aside from fewer and stronger banks, Tetangco said the BSP’s general direction is to have asset clean-up and better capitalization for banks. Based on initial studies, the BSP may consider partial lifting of the bank branching moratorium as there are still some areas, particularly in the provinces not being served by big banks. "One of the things we need to discuss is the area restrictions. The National Capital Region (NCR) may be congested already. We will see if we can lift restrictions in the countryside," BSP Deputy Governor Nestor Espenilla said. "The rationale of the proposed lifting of the branching policy is consistent with the goal of the BSP to strengthen the risk management of the monetary authority and to allow banks to be more competitive and meet international standards," Espenilla said. Espenilla, however, pointed out that should this policy change pushes through, the BSP would definitely allow only financially-capable banks to further expand their branch networks. "Possible relaxation would only be for banks that meet the minimum standard of financial strength and corporate governance," Espenilla said. Earlier, Tetangco said he is expecting more mergers and consolidations in the near future, vowing to keep continuity and consistency of policy reforms in the banking industry. |
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