July 08, 1999
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| July 08, 1999 | atimes.com | |
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| Southeast Asia Philippine House pushes reforms in general banking system MANILA - The House committee on bank and financial intermediaries will submit for floor deliberations the proposed revised General Banking Act when Congress resumes its regular sessions on July 26. This was disclosed Tuesday by Batangas Rep. Jose Macario Laurel IV, committee chairman, who said his House Bill No. 6814 seeks to promote competitiveness in the banking sector, improve prudential standards and strengthen the effectiveness of Bangko Sentral's supervision over banks. Laurel said the proposed law has already undergone more than four years and many man-hours of review and close scrutiny by the central bank, Congress, the banking sector and other private concerns. ''It has now become even more important with the current financial turmoil in the region that the proposed revised General Banking Act be adopted to lay the groundwork for faster economic recovery,'' Laurel, a former president of the Philippine Banking Corporation, said. While strengthening the country's banking system to make it responsive to the demands of globalization and a growing economy, Laurel said his committee gave foremost consideration to protection due the depositors. Among others, salient reforms include the expansion of the classification of banks, with the Monetary Board being given the authority to determine such other classification of banks. Consistent with the liberalization of foreign equity ceilings to attract more foreign investments, the proposed revision stipulates the reduction of the Filipino ownership requirement to 60 percent of total voting stock in case of distressed banks. Qualified foreign banks are allowed to own 100 percent of their own total voting stock, provided local investors are not available. Accordingly, Laurel said, foreigners are allowed to become bank directors to the extent of foreign equity ownership in the bank. ''There is a need not merely to revise the General Banking Act or Republic Act 337, as amended, but replace it with a new law, '' Laurel said. He added that despite several amendments to RA 337, which was enacted on July 24, 1948, ''there remains a pressing necessity for a new General Banking law that will meet the challenges posed by globalization." (Asia Pulse/PNA) | |||||||||
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