SECTOR - Cooperative Financial Institutions (Banks and Credit Unions)

The Philippines

[2022]

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  Department of Finance opposes proposed Cooperative Bank Act

ITALY

[2021]

Fitch Revises Gruppo Bancario Cooperativo Iccrea's Outlook to Stable; Affirms at 'BB-'

Fitch Ratings has revised Gruppo Bancario Cooperativo Iccrea's (GBCI) Outlook to Stable from Negative while affirming the bank's Long-Term Issuer Default Rating (IDR) at 'BB-' and Viability Rating (VR) at 'bb-'. Fitch has also revised the Outlook on central bank Iccrea Banca S.p.A. (IB) and its subsidiary Iccrea BancaImpresa (IBI) to Stable from Negative and affirmed their IDRs at 'BB-'. A full list of rating actions is detailed below.

GBCI is not a legal entity, but a cooperative banking group. Its 132 credit cooperatives and IB, which acts as the group central bank and sole issuing entity on institutional markets, are bound by a mutual support mechanism, under which members have a cross-support mechanism for capital and liquidity. We assign group ratings in accordance with Annex 4 of our Bank Rating Criteria and the same IDRs for GBCI, IB and its subsidiary IBI.

KENYA

Treasury, CBK give nod for Jamii Bora buyout by Co-op Bank

Cooperative Bank of Kenya will officially acquire 90% stake in Jamii Bora Bank on 21 August, Central Bank of Kenya (CBK) has announced. The banking regulator said in a gazette notice that the deal has received all the required regulatory approval, the latest being by National Treasury on 4 August. Co-op Bank early March opened talks to buy a majority stake in Jamii Bora Bank. The two parties valued the deal at KES1-billion, which was endorsed by Jamii Bora shareholders. “CBK welcomes this transaction which will diversify the business models of the two institutions, benefitting Co-op Bank’s diverse shareholders and enhancing the resilience of the Kenyan banking sector,” CBK said in a press statement. Co-op Bank board resolution will be tabled at the lender’s next Annual General Meeting for ratification, CBK said. In the deal, Co-op Bank has been issued with 224.1 million new “Class A” shares equivalent to 90% shareholding, while the stake of the existing Jamii Bora shareholders will be diluted to 10%.

Blow to Kenyan banks as Saccos close in on own money market

The Sacco Societies Regulatory Authority (Sasra), working with a multi-agency team comprising the State Department of Co-operatives, the National Treasury, Central Bank of Kenya (CBK) and the Kenya Law Reform Commission (KLRC), has drafted the legal framework for the operationalisation of the Central Liquidity Fund (CLF) where Saccos can lend and borrow money from each other thereby severing ties with Commercial banks whose loans are considered ‘expensive.’

Under the new regime, Saccos will run their own inter-Sacco market where they can lend and borrow from each other at reasonable rates to offset their financial positions.

NIGERA

[2021]Regulation Of Digital Lending In Nigeria

The cracks in the extant moneylending laws have provided an opportunity for some digital lenders to offer lending services without registering as a Money Lender. The moneylending laws of the States exclude co-operative societies registered under the Co-operative Societies Law from the purview of the law. Consequently, some digital lenders have set up as co-operative societies to receive contributions from their members and give loans to same.

INDOENSIA [2021]

KSP Indosurya vows to settle clients' funds

The pandemic has caused several savings and loan cooperatives to face a decline in loan repayments. Members have withdrawn their savings, burdening the cooperatives with a decline in equity and complicating their internal consolidation and member services.

BELGIUM [2020]

A general introduction to the banking regulatory regime in Belgium. Extract from The Banking Regulation Review, 11th Edition

From a regulatory perspective, 2019 was a relatively quiet year in the Belgian banking sector. The most noteworthy event was the issuance by the National Bank of Belgium (NBB) of a specific circular implementing the European Banking Authority (EBA) guidelines of 25 February 2019 on outsourcing arrangements. The NBB circular and EBA guidelines further clarify the outsourcing requirements applicable to Belgian credit institutions under the Banking Act.The Banking Act aims to integrate into Belgian law the three pillars of the EU Banking Union: the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism and the common deposit guarantee schemes.

INDIA

2022

Sustainable Cooperative Banking - Urban Cooperative Banks in India

September 2020

RBI Allows One-Time Loan Restructuring For The Stressed Borrowers

The Reserve Bank of Indiain order to curb the effect of COVID-19 over the economy, has introduced a Resolution Framework ("Resolution") for dealing with the stressed assets during the pandemic. It is important to assess the stress induced by the pandemic as it can hamper the ability of the borrowers to repay the loans. Therefore, RBI on August 6, 20201  announced a one-time special window for lenders in order to restructure the current loans, which will further allow them to change repayment terms for their borrowers who have been hit by the COVID-19 lockdown. The intention behind bringing out the Resolution is to help borrowers who are dealing with the liquidity and repayment issues due to the pandemic. 

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50176

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11580&Mode=0

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50176

August 2020

Restructuring Is The Way Forward – RBI Circular To Address COVID-19 Related Stress

In continuation of Reserve Bank of India's (RBI) efforts to ease financial stress caused by the Covid-19 pandemic, the RBI issued the circular on the Resolution Framework for Covid-19 Related Stress dated 6 August 2020 (August 6 Circular). The August 6 Circular creates a limited time window for certain categories of borrowers affected by Covid-19 pandemic related business disruption to be allowed resolution plans in the nature of restructuring while permitting the borrower accounts to retain their status as 'standard'. This effectively would be a carve out from the RBI's circular on Prudential Framework for Resolution of Stressed Assets dated 7 June 2019 (June 7 Circular) which requires status downgrade of borrower accounts which are restructured under the same management until satisfactory performance threshold is met. This dispensation is intended to facilitate revival of real sectors and avoid impairment of the recovery process as well as the consequent risk on the financial stability in general.

December 2020

New code for co-ops to kick in from April

All Central co-operative banks and States co-operative banks will follow new set of regulations as prescribed under Banking Regulations Amendment Act with effect from April 1, 2021.

With this, the RBI will have more power to deal with State and Central co-operative banks. These regulations include issuance of shares and bonds, beside others.

June 2020

Analysis Of COVID-19 On Prudential Framework For Resolution Of Stressed Assets

RBI directed all commercial banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks), Primary (Urban) Co-operative Banks/State Co-operative Banks/ District Central Co-operative Banks, all-India financial institutions and non-banking financial companies ("NBFC) including housing finance companies (collectively referred as "Lenders") to pass on the relaxations under the Regulatory Packages to the borrowers, to ensure business continuity and ease the economic hardship due to impact of COVID-19.

December 2020

World's first crypto-friendly financial institution in India

Cashaa is proud to announce its joint venture with, The United Multistate Credit Co. Operative Society as part of its India expansion plan. The Joint Venture, UNICAS, will build the world’s first crypto-friendly financial institution with physical branches and operations. The UNICAS will start its operations in Dec 2020.

• Open saving accounts with crypto wallets

• Loan against cryptocurrencies, gold, and real estate

• Invest in cryptocurrencies, Bonds, and fixed deposits

• Rapid expansion to over 100 branches by 2022

• Buy cryptocurrency with cash in physical branches