MANILA -– The Bangko Sentral ng Pilipinas and the Philippine Deposit Insurance Corp. have approved the inclusion of strong and well-managed commercial banks and thrift banks as eligible "white knights" for ailing rural banks.

The BSP said inclusion of KBs and TBs as strategic third party investors under what is now called Strengthening Program for Rural Banks Plus aimed to further “encourage faster consolidation in the banking industry especially of small sub-scale banks.”

“This program is envisioned to further strengthen the rural banking system, boost confidence, and improve the delivery of financial services to rural communities,” the BSP said in a press release.

SPRB Plus is the second enhancement program under the original SPRB.

The first one is the SPRM Module II or the Strengthening Program for Cooperative Bank launched in November 2011.

Under the SPRB Plus, PDIC may grant financial assistance to supplement capital shortfalls and entice new investors.

Relatively, BSP has identified an expanded package of regulatory relief and branching incentives for KBs, TBs and RBs that will serve as white knights.

BSP said that the latest version of the SPRB “expects eligible STPIs to sustain and strengthen the financial condition of resulting banks as well as improve their quality of corporate governance and management.

As of March this year, PDIC received 17 applications for the original SPRB involving 31 RBs and four of these have been approved by the PDIC Board while two are in the process of being approved.

Relatively, 24 of the 40 cooperative banks (Coop banks) in the country have expressed interest in the program and PDIC is currently evaluating three SPCB applications involving 14 Coop banks, the press release added.*PNA

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