BSP to provide technical assistance for qualified rural banks

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) will provide technical assistance for qualified rural banks, ramping up its initiatives to further strengthen the rural banking sector to boost the resilience of small banks.

During the Rural Bank Strengthening Program (RBSP) Technology and Innovation Forum on May 31, BSP Governor Eli Remolona Jr. announced that the Monetary Board has recently approved the RBSP Technical Assistance.

The RBSP Technical Assistance will serve as the deployment mechanism for capacity building, digitalization and financial advisory support for the rural banking sector. It is part of BSP’s efforts to assemble a support system that would address the needs of rural banks.

“Rural banks can be a linchpin for inclusive growth hence, preserving their role and building up their strengths are crucial for sustainable development,” Remolona said in a recorded message.

Likewise, Monetary Board Member Rosalia De Leon said the central bank is committed to cultivate an enabling environment supportive of banks’ digital transformation.

“The BSP will continue to roll out programs such as the RBSP Technical Assistance and various prudential reliefs and institute key regulatory initiatives geared toward driving digital transformation in the financial industry, all while managing risks attached to these initiatives,” she said.

Launched in June 2022, the RBSP aims to enhance the operations, capacity and competitiveness of the sector as these small lenders play a crucial role in providing financial products and services in rural and agricultural communities.

The RBSP is composed of four key elements, namely, a strengthened capital base, five time-bound tracks, incentives and capacity-building interventions as well as the review and enhancement of existing regulations.

The program also features five time-bound tracks including merger and consolidation, acquisition or third party investment, voluntary exit or upgrade of license, capital build-up and supervisory intervention.

Meanwhile, the RBSP technology forum covered two panel sessions discussing the potential of satellite technology and cloud computing in improving the operations of rural banks.

The BSP said the first panel session focused on how satellite technology can support banks’ internet connectivity and enhance their decision-making, risk management and customer management.

Panelists also discussed policy reform areas to help manage the cost of subscribing to this technology.

On the other hand, the BSP said the second panel session discussed the adoption of cloud computing and other innovations to increase the growth of rural banks.

The panelists deliberated the key considerations for rural banks before embarking on a digitalization journey such as capacity-building, change management, cybersecurity and senior management buy-in.

The session also explored possible policy initiatives to enhance banks’ cybersecurity and information technology frameworks.

BSP Deputy Governor Chuchi Fonacier said the central bank will consider the key takeaways of the event to drive the delivery of the RBSP Technical Assistance and intensify its efforts to collaborate and engage with the rural banking industry.