The recent development and trends in the banking industry compels merger, consolidation and acquisition of major shareholders by stronger banks on weaker banks. The cooperative banks are not exempted by these challenges. For quite sometime, the cooperative banks remained adamant and resilient to change to protect its cooperative values, principles, practices and unique features being a bank and at the same time a cooperative.
The time has come for the cooperative banks to keep abreast with the performance of its competitors with the necessary rationalization of the cooperative banking sector. It is timely with the program implementation for strengthening of cooperative banks and provision of incentive packages by Bangko Sentral ng Pilipinas.
As a parallel initiative to achieve a vibrant and improved position of coop banks to the banking industry, CDA is advocating for One Strong Coop Banking Sector with one strong Apex Bank and achieve in the long a one coop bank per region through the implementation of the program for the amalgamation, merger and consolidation. We expect to achieve a structure with lesser number of coop banks but with wider area of coverage and increased capacity, members’ equity, assets, revenue, products / services through its numerous branches.
In order to attain our objective, the following strategies and mechanism will be implemented:
A – amalgamation, merger and consolidation of coops banks.
I – instill coop values and principles of self-reliance, cooperation among coops, concern for the community, among others.
M – membership and resource expansion (savings and capital build-up)
H – harmonize policy issuances by regulatory agencies affecting coop banks
I – institutionalize prudent and financial sound practices.
G – governance and management.
H – highly innovative ideas/ways to generate capital and revenue including incentive packages to motivate coop banks to improve financial viability and sustainability.
Along this line, CDA shall strengthen its monitoring and regulatory functions over coop banks through its Regulatory Unit. Inspection and monitoring instrument shall be developed to be specifically used for coop bank’s inspection and monitoring by CDA technical staff.
While the government is doing its share and function to develop coop banks, the primary cooperatives as shareholders and owners must do its responsibility in membership expansion and pour in additional capital and investments.
—By: Corazon Diwas