MILLENNIUM CHRISTIAN HIGH SCHOOL OF CAVITE, INC.

ISHRM School System High School Department

A SYNTHESIS PAPER IN PRACTICAL RESEARCH 1

The Influence of Rural Bank Manager ‘s

Academic Background and in The Efficiency and
Effectiveness of the Branch Bank S.Y. 2017-2018
Submitted by:

Candalura, Colin

Torralba, Yza

Chuks, Joshua

Delos Santos, Erica

Submitted to:

Ms. Hanah Abegail Navalta

The Influence of Rural Bank Manager ‘s Academic Background and In The Efficiency and
Effectiveness of The Branch Bank S.Y. 2017-2018
 MILLENNIUM CHRISTIAN HIGH SCHOOL OF CAVITE, INC.
ISHRM School System High School Department

Local Study
Capital is the main basis of loan-based resources intended for rural banks
and it is essential to increase bank capital in order to stabilize the rural banking
organization by progressing institutional flexibility in the face of negative stuns.
Following in the strength of the Accord, the central bank of the Philippines, the
Bangko Sentral ng Pilipinas (BSP), finished gathering the capital regulation
necessities of rural banks a significant article on its stabilization approach agenda.
According to Toreja, 2003, Philippine financial institutions, each and every one of
which has its own idea, include (1) commercial banks, (2) thrift banks, (3) rural
banks, (4) offshore banks, (5) specialized government banks, and (6) non-bank
financial institutions. Rural banks operate into many behaviour in a separate
universe starting that of commercial banks. Furthermore, rural banks are locally
based by means of relatively a small number of resources, deposits, and equity
capital; they are normally run by privileged individuals with shareholders and
executive residing in the area and these individuals often carry on similar to
monopolists (see, e.g., Wehnert, 1999).

Within 2005, the rural banking industry showed pockets of increase within
the whole property (14.6 percent), lending (14.9 percent), deposit generation
(13.7 percent) and net interest income (10.3 percent). But after these figures gives
a deeper necessity for the industry to veer away since complacency given the
subdued act in loan quality, capital adequacy and productivity to continue
profitable and workable operations. Rural banks are ordered to build necessary
credit obtainable in the rural areas on rational terms and which are governed
fundamentally by the Rural Banks Act (Rep. Act No. 6938). Contrasting

The Influence of Rural Bank Manager ‘s Academic Background and In The Efficiency and
Effectiveness of The Branch Bank S.Y. 2017-2018
 MILLENNIUM CHRISTIAN HIGH SCHOOL OF CAVITE, INC.
ISHRM School System High School Department

commercial banks, universal banks, and thrift banks, rural banks are required to
be completely owned by Philippine citizens.

FOREIGN STUDY
One of these arrangements is the Central Bank of Nigeria rural Banking
policies of 1977 and this was to bring banking services towards rural family whose
primary economic exercises are Agriculture. Bank is a commercial organization
that takes deposits from and credit towards individuals and organizations. Every
single one bank is concerned basically with making and accepting payments on
behalf of their clients, accepting deposits and making loans to privileged
individual companies, public organizations plus governments.

Rural and community banks (henceforth referred to as rural banks or RCBs)

are a network of 127 self-governing unit banks in Ghana. They are controlled by
the Bank of Ghana and thereby form part of the controlled financial sector in
Ghana. These banks are the major providers of official financial services in rural
areas and also symbolize about half of the whole banking outlets in Ghana (IFAD
2008). By the end of 2008, these banks jointly had 421 branches. As well as head
offices, there were 548 service delivery locations spread throughout the country.
All authoritative regions have at least one bank, although mainly are located in
the Ashanti, Western, Eastern, and Central districts.

Local rural Banks plays a very important role in the agriculture and rural
growth of India. The RRBS have more reached to the rural area of India, through
their enormous network. The success of rural credit in India is largely depends on

their financial strength. RRBs are key financing organization at the rural level

The Influence of Rural Bank Manager ‘s Academic Background and In The Efficiency and
Effectiveness of The Branch Bank S.Y. 2017-2018
 MILLENNIUM CHRISTIAN HIGH SCHOOL OF CAVITE, INC.
ISHRM School System High School Department

which shoulders responsibility of gathering credit needs of different types of

agriculture credit in rural areas.

Rural banks’ main shareholders include local governments, local corporates

and individuals as well as farmers and employees. They are territorially focused
and mainly serve little & micro enterprises and private businesses in less developed
cities and in the region area. Rural banks are still the biggest group of lenders to
agriculture industry and farmers.

A few rural banks now have placed agencies in urban centers, thus shifting
focus off their initial rural investment objectives. They also pay more attention to
the urban customers who are likely to bring to the banks more gainful and
attractive businesses to the neglect of the small rural customers. The threat is that
if the trend is allowed to continue, it may create finance gap stuck between the
small-scale rural entrepreneur and reserved banking as was the case before 1974.

According to a current study by Baylor University, local lending to individuals

based on relational banking has decreased as rural communities have fewer
traditional financial institutions. 6 In addition to diminished relational lending,
research shows the loan default rates are higher when borrowers are not in the
similar geographic marketplace as their lender. That inaccessibility to safe,
reasonable credit is one of the root causes of why people remain poor.

The Influence of Rural Bank Manager ‘s Academic Background and In The Efficiency and
Effectiveness of The Branch Bank S.Y. 2017-2018
 MILLENNIUM CHRISTIAN HIGH SCHOOL OF CAVITE, INC.
ISHRM School System High School Department

BIBLIOGRAPHY

Aragon, J. & Kakinaka, M. & Kim, D. (May 27, 2013) Capital Requirements of
Rural Banks in the Philippines:
http://www.bsp.gov.ph/downloads/publications/2011/BS11_A3.pdf

Guinigundo, D. (August 4,2006) The Philippine financial system: issues and

challenges: https://www.bis.org/publ/bppdf/bispap28t.pdf

Lex Mundi (October 17, 2006) Bank Finance and Regulation:

http://www.lexmundi.com/images/lexmundi/PDF/PG/BankFinance/Phillipines.p
df

Nair, A. & Fissha, A. (June 2, 2010) Rural Banking: The Case of Rural and
Community Banks in Ghana:
http://documents.worldbank.org/curated/en/288531468006608213/pdf/565910
NWP0ARD01UBLIC10GhanaRCBs1web.pdf

Devi, N. S. (April 2014) Problems and Prospects of Regional Rural Banks in India:
https://www.arcjournals.org/pdfs/ijmsr/v2-i3/8.pdf

AMTD Equity Research (January 13, 2017) China Rural Banks, New urbanization,
new growth engine:
http://www.amtdgroup.com/sites/default/files/reports/Rural_banks_sector_repor
t.pdf

Addo, J., Akorsu, P. & Asareldun, A. (March 2015) From Rural Banks to Urban
Banks: Why do Rural Banks move to Urban Areas in emerging Economies:
http://ijecm.co.uk/wp-content/uploads/2015/03/3356.pdf

The Influence of Rural Bank Manager ‘s Academic Background and In The Efficiency and
Effectiveness of The Branch Bank S.Y. 2017-2018
 MILLENNIUM CHRISTIAN HIGH SCHOOL OF CAVITE, INC.
ISHRM School System High School Department

Southern Bancorp (December 19, 2014) Banking in Rural America; Insight from a
Community Development Financial Institution:
http://southernpartners.org/assets/SBCP_CDFIPaper_20141219.pdf

The Influence of Rural Bank Manager ‘s Academic Background and In The Efficiency and
Effectiveness of The Branch Bank S.Y. 2017-2018