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Philippines rural bankers raise concerns over new rules on mergers

The Rural Bankers Association of the Philippines (RBAP) has warned that requiring bigger capital for mergers and consolidation may be detrimental to small lenders that have been affected by the pandemic. RBAP President Albert T. Concha, Jr. said that while the requirement's intended goals are laudable, the timeline for implementation should be carefully reviewed as rural banks are still recovering from operational losses during the pandemic. Concha urged regulators to consider that smaller banks are in need of “extraordinary support” from the government amid the pandemic. The minimum required capital for rural banks starts at PHP10m up to PHP200m. He added that a survey among rural banks that have merged or consolidated showed that such transactions are very costly and time-consuming for small lenders.

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