The Senate ratified on Wednesday night the bicameral conference committee report on the bill amending the Rural Bank Act to allow the infusion of foreign equity in the capital of rural banks.
In the joint explanation read by Senator Sergio Osmena III, the two panels of the Senate and the House of Representatives agreed to adopt the Senate version, Senate Bill No. 3282.
Osmena said the proposed measure aims to open up the ownership of rural banks to foreign equity and spur economic development in the countryside.
“This measure amends Section 4 of Republic Act 7353 and once enacted into law, allows foreign individuals and entities to acquire equity of up to 60 percent in rural banks,” Osmena, chairman of the Senate committee on banks, financial institutions and currencies, said.
Presently, Section 4 of Republic Act 7353 allows foreign banks to acquire equity in rural banks but prohibits foreign individuals or foreign entities from doing the same.
“Rural banks need to look beyond their limited resources and take advantage of funds available elsewhere. The opportunity to forge international equity partnerships would put rural banks on a level playing field with its thrift and commercial banking counterparts that are able to take in foreign partners,” Osmeña said.
He underscored the importance of rural banks in countryside development.
The proposed bill which is now up for submission to Malacanang for signature of President Benigno Aquino III allows non-Filipino citizens to become members of the board of directors of a rural bank.
”But their participation in the board shall be limited to their proportionate share in the equity of the rural bank and provided, however, that at least one independent director shall be elected to the board of directors,” it stated.