FIST bill now a law

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THE Financial Institutions Strategic Transfer (FIST) bill, a measure designed to create specialized asset-managing corporations, is now a law, says Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno.

“That’s great news! FIST law will allow banks to easily dispose of bad assets through Asset Management Companies. The new law will help keep the banking system stable despite the effects of the COVID-19 pandemic,” Diokno said in a tweet.

The FIST bill seeks to create specialized asset-managing corporations that would acquire “bad loans and stagnant properties” from embattled financial institutions.

Under the measure, a FIST corporation may invest in, or acquire non-performing assets (NPAs) from financial institutions; and engage third parties to manage, operate, collect, and dispose of acquired NPAs.

“It will ease the NPL (Non-Performing Loans) ratios of banks moving forward. FIST is expected to reduce the NPL ratio by about 0.63 to 7.0 percentage points,” Diokno said.

“Anticipating the signing of the FIST bill into law, the draft Implementing Rules and Regulations (IRR) is already with the Securities and Exchange Commission or SEC (with inputs from the BSP) as the lead agency. The said IRR is being circulated to the industry for comments,” he added.

Diokno previously pushed for the bill, saying that borrowers’ capacity to pay may be weakened by a disruption in their cash flows by the end of 2020.

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