Updating

Representatives of rural banks in Negros Oriental were gathered by officials from the Land Bank of the Philippines, Bangko Sentral ng Pilipinas and the Philippines Deposit Insurance Corporation for a two-day consultation/dialog and Roadshow of BSP Circular 855 that provides updated guidelines on operating within a sound credit risk management environment.

The learning activity provided an appropriate forum to exchange views between regulators of the rural banks with on-the-field personnel. Furthermore the rural bankers were given the chance to raise questions and be clarified on the increasing standards of operations to be complied with. Understandably the current deficiencies in rural banking operations need to be addressed to strengthen the individual banks, as well as, the industry, with the welfare of the depositors given prime importance.

The relationship between the rural bank people and the examiners for the regulating institutions are strained most often, from the perspective of the examinee, to go beyond the “nothing personal we are just doing our work” parameters. In these circumstances, rural bankers need to be reminded that their responsibilities to the public far outweigh the personal privileges afforded the examiners.

Operating within a sound credit risk management environment is a very challenging task especially when you are directed to do so. This is because the implication is that one is operating in an unsound credit risk management environment and continuing to do so will lead to the financial institution's demise.

The rural banking industry has had its share of failures and such has pushed regulators increase their standards of performance that naturally results into requiring better levels of compliance with sound banking practices. The challenge is to work better and harder for such in the way to help fruitfully contribute to build the countryside through sound rural banking.

Let us end with an anecdote to help us appreciate the countryside better. An old farmer had owned a large farm for many years. He had a huge man-made pond out back with a beautiful picnic area. For years it was the perfect place to unwind or hold a family get together. As the farmer grew older, his "Oasis" was used less and less. It eventually became the local swimming hole and while his neighbors occasionally took advantage of the pond, he rarely made an appearance. One evening the old farmer decided to go down to the pond. He hadn't been there in a while and felt the urge to pay a visit to check on things. As he neared the pond, he heard loud playful voices giggling and laughing. As he came closer he was astonished to see that a bunch of young women had decided to skinny dip in his pond. He made the women aware of his presence and they all went to the deep end of the pond. One of the women shouted to him, "We're not coming out until you leave!" The old man replied, "I didn't come down here to watch you ladies swim or make you get out of the pond naked. I'm here to feed the alligator."*