Rural bankers join credit bureau

CEBU CITY – The Rural Bankers Association of the Philippines (RBAP) has locked arms with the Bankers Association of the Philippines (BAP) to protect the banking system from further burdening itself of bad debts.

Last week, the RBAP signed an agreement with the BAP Credit Bureau Inc. allowing its members to tap the negative file information system. The system’s information is on borrowers and clients with bad credit standings in the banking system.

The plan to join forces started late last year, and the plan was approved by the BAP board early this month.

In turn, rural banks would also contribute information into the system for the benefit of the entire banking system.

RBAP president Daniel Arcenas said that the use of credit bureau enables rural banks to improve their lending practices while on the other hand, BAP-CB would be able to extend its geographical coverage to include the provincial cities and the numerous municipalities covered by the rural banking system.

RBAP’s 729-member banks could contribute are located in 50 percent of the country’s municipalities and 93 percent of the cities nationwide.

Arcenas said that training sessions would be conducted soon to speed up the implementation and usage by member rural banks. And prior to the training sessions, officials of both entities would outline the parameters and terms for the use and expansion of the negative file information system.

The scope of information that the BAP-CB has includes litigation accounts, foreclosed accounts, accounts written off as bad debts, current accounts closed due to improper handling, canceled credit cards, and credit-related complaints, such as, but not limited to replevin, collection of a sum of money, repossession, estafa and the like.

The RBAP president revealed that they were reformatting their website to introduce a window to publish the ROPOA (real and otherwise properties owned and acquired) of its member banks. Unofficially, the rural banking system’s ROPOA ranges from P7 to P8 billion end 2003.

Arcenas explained that by making public the bad assets, it could serve as a marketing tool for its members. "Publication in a daily newspaper is also another option."

The Bangko Sentral ng Pilipinas (BSP) has been urging the country’s banking system to get involved in a single private credit bureau with it as the repository to avoid complications. There are three to four private credit bureaus presently operating and another government-led.

The BAP operates the BSP-CB but until lately has been catering mainly to its member commercial banks.

Earlier, the national government said that it was looking at a credit bureau service for thrift and rural banks. It was specifically concerned about the credit standing of small and medium enterprises (SMEs) from a masterlist through the Internet so that credit application will be quick and hassle-free.