BSP Lowers Capital Requirements; Trust License for Thrift Banks Eased

Article excerpt

Byline: LEE C. CHIPONGIAN

The required capital for thrift banks applying for trust functions will be reduced from P625 million to P325 million.

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. told thrift bankers that a circular implementing the new rules will be issued soon.

Tetangco said to reporters later that thrift banks had earlier proposed the lowering of capital to engage in the trust business.

Chamber of Thrift Banks (CTB) President Amb. Alfredo Yao said they are still waiting for the new circular. "We were told that BSP is preparing the circular but the Governor (Tetangco) said the capital requirement has been reduced."

Yao said thrift banks located outside of Metro Manila will have lower capital requirements. "This would help us ... normally OFWs (overseas Filipino workers) put their money in trust accounts for house construction or their children's schooling." At the moment because of the high capital limits, many thrift banks in the provinces were still unable to tap OFW funds. Trust accounts are usually used to park a client's money until they decide how they want to invest their money.

In the meantime the BSP will also soon permit thrift banks to invest in long-term foreign currency investment instruments such as in sovereign debt or higher-yielding ROPs.

Tetangco said the BSP will consider proposals to invest in long-term debt securities and to ease limits imposed on thrift banks with foreign currency deposit units. …