JUNE 7, 2013

NR # 3127B

Creation of Rule Book for cooperative banks pushed

A lawmaker will pursue the creation of a Rule Book or a Cooperative Banking statute to govern the existence and operations of cooperative banks in the country in the next Congress. Rep. Cresente C. Paez (Party-list, COOP-NATCCO), who won a seat in the 16 th Congress, said there is a need for the cooperative banking sector to have its own rulebook, distinct and different from that of rural and commercial banks. Management and operations of cooperative banks clearly manifests their peculiarities because of its nature in terms of ownership, governance, clients and profit allocation, Rep. Jose R. Ping-ay (Party-list, COOP-NATCCO) explained. The provision for the creation of the cooperative banking act is contained in House Bill 4478 which Paez, together with Ping-ay, filed in the 15th Congress. Under the measure, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) and the Cooperative Development Authority (CDA) are tasked to formulate the necessary rules and regulations governing the establishment and operation of cooperative banks, separate and distinct from rural and commercial banks. It shall be called the Rule Book governing cooperative banks and the organization of cooperative banks shall be based on Article 97 of Republic Act 9520 otherwise known as the Philippine Cooperative Code of 2008, Paez said. The bill further states that the administration of cooperative banks shall be an utmost concern of the Board of Directors and Management pursuant to Article 98 of Republic Act 952000 and that the capital requirements of cooperative banks shall be subscribed and paid by the listed primary cooperative shareholders. Paez said the supplemental capital for cooperatives banks shall come from the Land Bank of the Philippines, the Development Bank of the Philippines or any government-owned or controlled bank or financial institutions. As required under the bill, these banks shall subscribe within 30 days to the capital stock of any cooperative bank from time to time in an amount equal to the total equity investment of the shareholders which shall be paid in full at the time of the subscription or such amount as may be necessary to promote and expand rural economic development, he further said. In addition to the operations specifically authorized under the bill, any cooperative bank may accept savings and time deposits; open current or checking accounts; act as correspondent for other financial institutions and act as a collection agent, among other things. Paez said the important role of cooperative banks in the provision of credit and other financial services to the so-called non-bankable sector have been very noteworthy. And with the implementation of the new Philippine Cooperative Code of 2008, bigger challenges have been posted for the cooperative sector to play a bigger and more meaningful role in the delivery of credit and credit facilities to the countryside, Paez added. (30) mvip