The Bangko Sentral ng Pilipinas (BSP) supports the immediate passage of the proposed Cooperative Banking Act, which aims to streamline the regulatory requirements for cooperative banks.
"The BSP is supporting the Cooperative Banking Bill in line with our commitment to further promote a vibrant cooperative banking sector and foster the growth of rural economies," said BSP Governor Benjamin E. Diokno.
Filed on 31 May 2021, House Bill No. 9541 harmonizes regulations on cooperative banks being carried out by the BSP and the Cooperative Development Authority (CDA).
The bill provides that cooperative banks shall be under BSP supervision, but CDA shall still monitor their compliance with cooperative laws and regulations. For rules on governance, the provisions of banking laws, rules, and regulations shall prevail.
Moreover, the bill grants incentives and privileges to encourage the formation and organization of cooperative banks; and provides rules on the registration, regulation, and operation of said financial institutions.
The proposed law also expands the definition of membership in cooperative banks, which is currently limited to cooperative organizations and associations.
"The legislative reform is expected to further promote the safety and soundness of the country's cooperative banking industry," explained the Governor.
The BSP also looks forward to continuously coordinating with Congress, the CDA, and the cooperative banking industry on the passage of the bill.
The bill defines cooperative banks as those organized for the primary purpose of providing a wide range of financial services to cooperatives and their members and the public.