Non-reclassification of Microfinance-Oriented Thrift Banks (TBs)/Rural Banks (RBs) to Regular TBs/RBs and Conversion of Microfinance-Oriented Branches into Regular Branches

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OFFICE OF THE DEPUTY GOVERNOR SUPERVISION AND EXAMINAtION SECtOr

CIRCULAR LETTER NO. CL-2008- 075

To ALL THRiFt And RurAL BANKS

Subject : Non-reclassification of Microfinance-Oriented Thrift Banks (TBs)/RuralBanks(RBs)to Regular Conversion of Microfinance-Oriented Branches into Regular TBs/RBs and

Branches

2008, all thrift banks and rurat banks are hereby informed of the foilowing: Pursuant to Monetary Board Resolution No. 1457 dated 06 November

1. Reclassification of microfinance-oriented Thrift Banks (TBs)/Rural

Banks (RBs) to regular TBs/RBs are disallowed; and

2. Conversion of rnicrofinance-oriented branches of regular TBs/RBs

into regular branches are allowed, five years after the start of the branch's operations, subject to the submission of the following:

a Certification signed by the president or officer of equivalent

rank that Circular No. 340 dated 20 July 2002, as amended by Circular No. 624 dated 13 October 2008 that:

(1) At least 70 percent of deposits generated by the

branch to be estabiished shall be actually lent out to rnicrofinance borrowers; and

(2) The microfinance ioans of said branch shall at all times be 50 percent of its gross loan portfolio

are no longer feasibie due to changes in market condition in the locality where it is iocated. The certification shall be supported by a rnarket study citing, among others, changes in demographic, sociai, and economic factors; and

PANANALAPING MATATAG, BANSANG PANATAG

A. Mabini St., Maiate 1004 Manila, Philippines Trunkline (632) 524-70-11 URL:www.bsp.gov.ph e-mail: [email protected]

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b. Certified true copy of the resolution of the bank's board of

oriented branch into a regular branch. directors authorizing the conversion of the microfinance:

For information and guidance

NESTOR A. Deputy Goveref SPENLYA JR

zY November 2008