MB allows banks to tap stores to act as agents

Filipinos who have no access to financial institutions will now have a chance to be part of the government’s financial inclusion program after the Bangko Sentral ng Pilipinas (BSP) allowed banks to tap cash agents that include retail stores.

The policy-making Mone­tary Board (MB) issued guide­lines recently, allowing banks to tap convenience stores, pharmacies and other high­ly-accessible retail outlets to accept and disburse cash on its behalf, assist in the online self-service deposit process, withdrawals and fund trans­fers, and bill payments.

BSP, in a statement, said these cash agents, who may be tapped as such after get­ting BSP approval, may also conduct know-your-custom­er procedures, forward appli­cations for loans and account openings, and sell and ser­vice insurance.

It explained that cash agents “are typically cash-rich third party entities with many outlets that conduct regular business in fixed loca­tions anywhere in the coun­try.”

It said these entities “en­able banks to leverage on innovative digital solutions to serve a wider client base, particularly in the low-income and rural areas where there is limited commercial incentive to establish a full branch or even a micro-banking office (MBO).”

”Through this new cost-efficient service chan­nel, serving the currently unbanked and low-income segments can become more viable and sustainable for banks,” it said.

BSP said more than 36 percent of all municipalities in the country have no banking presence, but bulk of these are serviced with non-bank financial institutions such as pawnshops, cooperatives, and lending investors.

In line with the issuance of the new guidelines, the MB also relaxed existing rules on offsite deposit servicing and deposit solicitation by not requiring the submission of operational requirements and conditions prior to delivery of these services.

”The amended regu­lations provide banks with more flexibility in designing appropriate and cost-efficient ways to render deposit pick-up and delivery services and as a result, enhance client ex­perience,” the BSP said.

The BSP said banks need to ensure “adequacy of risk management and internal control systems for these lib­eralized deposit servicing ac­tivities.”

”The BSP will evaluate the quality and sufficiency of these risk management and control systems before grant­ing authorization to perform banking services outside bank premises,” it added.