Rural banks get go-signal to invest in ATMs

Rural banks can now invest in automated teller machines (ATMs) in a move that would increase the network of smaller banks in the provinces, the Bangko Sentral ng Pilipinas (BSP) said over the weekend. BSP deputy governor Nestor Espenilla Jr said the huge remittances to families of overseas Filipino workers had created a market for funds that were easier to access. He admitted that it has no clearly defined rules for rural bank investments in ATMs because the market had no demand for them in the past. "Now, we have decided that rural banks should be allowed to make investments in the physical network of automated teller machines," Espenilla said. "If they can make such investments, they are now allowed." The new BSP policy would boost the network of rural banks, thrift banks, cooperative banks and non-government organizations under NationLink that was already being used as tax collection points for local government units. Although significantly smaller than the three other major bank networks Bancnet, Megalink and Expressnet, Nationlink catered mainly to areas not served by major commercial banks and otherwise had no access to any of the networks. Nationlink's earlier said that its target was to link at least 100 rural banks, thrift banks, cooperative banks and cooperatives in the rural areas. Nationlink is supported by international and local partners led by telephone giant PLDT, chip maker Intel, American ATM maker Diebold, and Microsoft. Nationlink was already concentrated in the Visayas and Mindanao area after the network entered into an alliance with the Enterprise Bank in Mindanao, Asian Hills in Bukidnon, Peninsula Bank in General Santos, Bank of Cebu, Legaspi Savings Bank in Bicol, Opportunity Microfinance Bank in Antipolo, and two cooperatives. Nationlink was targeting overseas Filipino workers whose families were in the rural areas with little or no access to large banking networks that are concentrated mainly in urban areas. NationLink was originally targeting remittance kiosks as well as cash-in or cash-out counters in the countryside to provide OFWs a cheaper alternative in sending their money to the Philippines. But with rural banks now allowed to set up their own physical ATM networks, electronic banking conveniences would now become available even far outside urban centers. - GMANews.TV