MAY 31, 2011

NR # 2421B

Solons pushes creation of the Cooperatives Banking Act

Cooperative banks in the country will be given a new role in the banking system under a
bill that will make them more responsive to the needs of the rural folks.

Reps. Jose Ping-ay and Cresente Paez (Party-list, COOP-NATCCO), authors of House Bill
4478, said the bill will promote and assist in the establishment of more cooperative banks that
will make credit readily available and accessible in the rural areas on affordable terms.

“The bill intends to provide a rule book for the cooperative banks in the country,” Ping-ay
said.

Ping-ay said the bill, to be known as the “Cooperative Banking Act of 2011,” will govern
the existence and operations of cooperative banks in the Philippines.

Under the bill, the cooperative banks can accept savings and time deposits and open
current or checking accounts. They can operate the business with net assets of at least P5 million,
subject to the rules and guidelines of the Bangko Sentral ng Pilipinas (BSP) and Cooperative
Development Authority (CDA).

It can also act as a collection agent and operate an automated teller machine (ATM). The
bank can also act as official depository of municipal, city and provincial funds in the
municipality, city or province where it is located, under the rules provided by the BSP and the
CDA.

Ping-ay said the enactment of the Cooperative Code of 2008 pushed the cooperatives
sector into playing bigger and meaningful role in the delivery of credit and credit facilities to the
countryside.

“The cooperatives banking sector has also been waiting to have its own rule book that is
distinct and different from that of rural and commercial banks,” Ping-ay said.

Paez said the management and operations of cooperative banks have their manifest
peculiarities because of their nature in terms of ownership, governance, clients and profit
allocation.

“The important role of cooperative banks in the provision of credit and other financial
services to the so-called non-bankable sector of our society has been very noteworthy,” Paez said.

Paez said the cooperative banks have been very active in helping the government in
poverty alleviation efforts.

The bill mandates the BSP and the CDA to formulate the necessary rules and regulations
governing the establishment and operation of cooperative banks. (30) fg