Three-way merger to give rise to biggest rural bank in RP

The Bangko Sentral ng Pilipinas (BSP) has approved a three-way merger that will result in the formation of the biggest rural bank in the country.

Wilfredo B. Domo-Ong, director of the BSP’s Supervision and Examination Department, said the Monetary Board through Resolution 1865 approved the consolidation of Network Rural Bank (Davao del Sur) Inc., the Rural Bank of Panabo (Davao del Norte) Inc., and the Provident Rural Bank of Cotabato (North Cotabato) Inc. into a single bank called One Network Rural Bank Inc.

The BSP also approved the grant of incentives such as exemption from the branch expansion bank.

One Network Rural Bank will be allowed to directly participate in the Philippine Clearing House Corp. (PCHC) and act as a money changer for foreign exchange provided it will open a foreign currency deposit with commercial banks.

One Network will be the second rural bank granted permission to operate as money changer, and the first to actually operate as such.

The consolidated rural bank will also be allowed to open a foreign currency deposit unit (FCDU) as long as it raises its paid-up capital to P650 million or more.

Network Bank president Alex V. Buenaventura said that dealing directly with PCHC not only speeds up and expedites clearing of its own checking account.

"It also unlocks two-thirds of the reserve deposit block with the commercial bank which served as our clearing bank," Buenaventura said. "That would thus allow that amount to be relocated for lending."

The BSP has allowed the consolidated bank to open six additional regular branches in areas where there are only three existing branches or officers of other banks. It still has two unused branch licenses.

However, it has to open an office in Metro Manila "solely for the purpose of serving as headquarters for its designated clearing representative to deliver and receive checks/supporting statements and other documents relative to clearing operations."