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The Role of Legal Compliance and Sound Business Practices in the Sustainability of Rural Banks

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  • Jay A. Roslinda

    (Jose Rizal Memorial State University, Philippines)

Abstract

This study titled “The Role of Legal Compliance and Sound Business Practices in the Sustainability of Rural Banks,†explores the vital connection between adherence to legal standards, ethical operations, and the long-term sustainability of rural banking institutions. The findings revealed that legal compliance among rural banks encompasses multiple dimensions, including strict observance of Bangko Sentral ng Pilipinas (BSP) regulations, maintenance of institutional integrity, adherence to legal certifications, effective reserve management, and the assurance of stability and insurance. Moreover, sound business practices emerged as essential pillars of sustainability, highlighting profitability, growth, market assessment, strategic planning and monitoring, innovative marketing, and the significant influence of leadership styles—whether visionary, autocratic, or supportive—along with financial rewards and employee recognition. Economic themes underscored the banks’ continuous efforts to enhance financial performance through policy adaptation and effective strategies led by motivated and competent officers. Likewise, legal themes emphasized the banks’ identity as good corporate citizens committed to upholding safe, ethical, and sound banking operations. Overall, the study affirms that the sustainability of rural banks is deeply anchored in their unwavering legal compliance, dynamic leadership, and the consistent execution of sound business practices that safeguard both institutional growth and public trust.

Suggested Citation

  • Jay A. Roslinda, 2025. "The Role of Legal Compliance and Sound Business Practices in the Sustainability of Rural Banks," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 9827-9853, September.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-9:p:9827-9853
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    References listed on IDEAS

    as
    1. Kosmas Njanike, 2009. "The Impact of Effective Credit Risk Management on Bank Survival," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 9(2), pages 173-184.
    2. David Henderson, 2009. "Misguided Corporate Virtue: The Case Against Csr, And The True Role Of Business Today," Economic Affairs, Wiley Blackwell, vol. 29(4), pages 11-15, December.
    3. Olalekan Usiobaifo Asikhia, 2016. "Ethical Banking Determinants across Nations: A Meta-Analysis," Journal of Economics and Behavioral Studies, AMH International, vol. 8(3), pages 115-126.
    4. Jay A. Roslinda, 2025. "Business Strategies Among Rural Banks in Relation to Their Performance," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(7), pages 4040-4068, July.
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