BSP allows rural banks to invest in ATMs

The Bangko Sentral ng Pilipinas (BSP) said rural banks are now allowed to invest in automated teller machines (ATMs), a move that would further expand the network of smaller banks in the countryside.

The BSP explained over the weekend that there were no clearly-defined rules for rural bank investments in ATMs since the market had no demand for them in the past.

According to BSP Deputy Governor Nestor Espenilla Jr., however, the magnitude of remittances to families of overseas Filipino workers had created a market for funds that are easier to access.

"Now, we have decided that rural banks should be allowed to make investments in the physical network of automated teller machines," Espenilla said. "If they can make such investments, they are now allowed."

The new BSP policy would boost the network of rural banks, thrift banks, cooperative banks and non-government organizations under Nationlink that was already being used as tax collection points for local government units.

Although significantly smaller than the three other major bank networks Bancnet, Megalink and Expressnet, Nationlink catered mainly to areas not served by major commercial banks and otherwise had no access to any of the networks.

Nationlink earlier said that it’s target was to link at least 100 rural banks, thrift banks, cooperative banks and cooperatives in the rural areas. 

Nationlink is supported by international and local partners led by telephone giant PLDT, chip maker Intel, American ATM maker Diebold, and Microsoft.

Nationlink was already concentrated in the Visayas and Mindanao area after the network entered into an alliance with the Enterprise Bank in Mindanao, Asian Hills in Bukidnon, Peninsula Bank in General Santos, Bank of Cebu, Legaspi Savings Bank in Bicol, Opportunity Microfinance Bank in Antipolo, and two cooperatives.