Co-operative banks in the Philippines have been authorised to open more branches and offer more services, including letters of credit (L/Cs).

The authorisation was issued by the central bank, Bangko Sentral ng Pilipinas (BSP), under new rules issued in 2008 that already paved the way to allow the country's rural and thrift banks to conduct L/C business.

Approvals

Deputy Governor of the BSP, Nestor Espenilla, explained that co-operative banks may now open L/Cs and accept savings and time deposits so long as they meet capital adequacy requirements.

Banks contemplating offering the new services will have to obtain BSP approval to accept demand deposits, operate foreign currency deposit units and engage in trust and other banking activities.

Legislative changes

The Co-operative Code has been amended so there can now be more than one co-operative bank in a province, provided the new one does not open in the city or municipality where another co-operative bank's head office is located.

The central bank has also allowed co-operative banks to establish branches and open additional offices, depending on their capitalisation.

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