BSP Governor Benjamin Diokno announced a 100-basis-point reduction in the reserve requirements of thrift banks (TBs), rural and cooperative banks (RCBs) effective 31 July 2020. The reduction is expected to increase lending capacity of these banks to support financing requirements of their micro-, small- and medium enterprise as well as rural community-based clients. It will also help lower intermediation costs and ease financial strain faced by these banks’ customers.
With the reduction, the reserve requirements of TBs and RCBs will be three percent and two percent, respectively.
It may be recalled that the BSP Monetary Board had earlier approved a 200-basis point reduction in the reserve requirements of universal/commercial banks and non-bank financial institutions with quasi-banking functions.
This move is also part of the BSP’s omnibus package of reforms aimed at assisting the banking public with their liquidity requirements during the Corona Virus Disease 2019 pandemic and supporting the transition towards a sustainable recovery during the post- crisis period.
Source: Bangko Sentral ng Pilipinas (BSP)