THRUST in between the large scale of universal and commercial banks and the community entrenchment of rural and cooperative banks, thrift banks face the challenge of choosing which market favors them.
For Bangko Sentral ng Pilipinas (BSP) Gov. Amado Tetangco, thrift banks can find their niche in consumer finance and micro, small and medium enterprises.
At a speech delivered in Manila for a convention of the Chamber of Thrift Banks, Tetangco said that the size of operation is not the only issue facing thrift banks, but their choice of target market.
“By targeting specifically these markets, (thrift banks) should have a better sense of the amount of risk capital that is needed for a projected level of risk exposure. It also allows for more focused consideration via specific regulatory issuances,” he said.
Citing the Thrift Bank Act of 1995, Tetangco pointed out that thrift banks are supposed to “promote economic development and expand industrial and agricultural growth” and “place within easy reach of the people the medium to long-term credit facilities to businesses engaged in agriculture, services, industry and housing at a reasonable cost.”
“One can argue that this is true of any bank, whether universal, commercial, thrift, rural or coop banks. If this is the case then, the distinctive feature of thrift banking as provided by law is that of mortgage financing,” Tetangco said.
As the Asean Banking Integration Framework—guidelines for qualified Asean banks to operate within the region—was also launched recently, he also noted that the Asean integration is also a key consideration for thrift banks.
With about a tenth of the world’s population residing within Southeast Asia, he said this young population provides an opportunity for banks to serve their increasing demand for finance services, especially for consumer requirements like housing, auto loans and credit cards. He described these requirements as “the very market that the Philippine thrift banking industry currently defines as its space.”
For MSMEs, he believes that growth in this sector will lead to significant effects in employment generation and in raising the standards of living of more people, as the sector employs 65 percent of the country’s workforce. “By positioning to serve this sector, thrift banks can be true catalysts of broad-based and sustainable inclusive growth.”
Meanwhile, the BSP warned the public against unsolicited text messages about bank advertisements, loan offers or marketing promotions.
The Cybercrime Prevention Act criminalizes the transmission of commercial electronic communication using computer systems that seek to advertise, sell or offer for sale products and services unless the recipient has given prior consent. The National Telecommunications Commission also issued memorandum circulars prohibiting the public telecommunication and content or information service providers from sending or initiating “push” or unsolicited text messages unless they have written consent from the subscriber choosing to receive commercial advertisements through text.
The BSP earlier issued a memorandum to all banks and subsidiaries and affiliates to remind them of their compliance with the rules prohibiting unsolicited text messages. The BSP sent out the advisory after receiving complaints and inquiries about the matter.