The Market Monitor Minding the Nation's Business
The Bangko Sentral ng Pilipinas’ (BSP) Monetary Board (MB) has eased deposit requirements to entice more Filipinos to save while tightening rules on huge bank deposits to prevent money laundering.
For more Filipinos to open bank accounts, the MB provided for the creation of so-called “restricted accounts” that allows minimum identification requirements but are limited to local transactions.
The new ruling is contained in the revised regulations on anti-money laundering (AML) and terrorist financing (TF) the MB approved on February 23.
The revised rules call for tougher customer due diligence procedure and a practical way of sourcing official documents through the use of other reliable and independent source of data and information on customers.
Under the restricted account clause, depositors must have a maximum annual total deposit of P100,000 and “the account shall not be allowed to receive/send foreign remittances.”
The MB said the identification requirements for people opening a restricted account is basically a valid identification card (ID) but banks are allowed
to register need to get the customer’s complete name, birth date, source of funds, present and/or permanent address and nationality.
Banks also need to “ensure that it has in its records a clear photograph and signature or thumbprint of the customer.”
“With the advent of new technologies in the financial system, the new rules recognize and allow the use of information and communication technology in the conduct of customer identification subject to implementation of appropriate measures to manage attendant risks,” the BSP said.
“Finally, to realize desired change towards effective implementation, escalation of supervisory enforcement action is introduced in cases of heightened AML/CFT supervisory concerns as reflected in the overall AML risk rating of the covered person,” it said adding that covered persons are given six months upon the effective of the new rules to update their AML/CFT policies.
The BSP said the enhanced anti-money laundering/combating the financing of terrorism (AML/CFT) regulations is among the “ongoing efforts to strengthen the financial system’s safeguards against ML and TF balanced against the objective of also promoting financial inclusion of the unbanked.”
Among the main factors used for the amendments are the latest revised implementing rules and regulations of the Anti-Money Laundering Act (AMLA) that took effect last January 7, the lessons learned from the recent ML/FT cases, the latest Financial Action Task Force (FATF) recommendations and guidance papers, specifically those that tackled the use of risk-based approach to AML/ CFT standards and striking balance between financial integrity and financial inclusion.
The AML regulations of the manual of regulations for banks and manual regulations for non-bank financial institutions define “covered persons” as entities regulated by the central bank and these include banks, non-banks, quasi-banks (QBs), trust entities, non-stock savings and loans associations, pawnshops, foreign exchange dealers, money changers, remittance and transfer companies, electronic money issuers, and other financial institutions regulated by the BSP through special laws.
Social media risk plan for banks.
The MB also required banks to have a social media risk management program to protect it from possible reputational risks, among others.
In a circular, the MB said banks need to adopt a commensurate risk management mechanisms and governance structure to effectively identify, measure, manage and monitor risks from social media platforms.
It said this measure stresses additional dimensions on traditional risks such as legal, reputational, strategic, operational and on compliance.
It identified the additional risks as the growing threats on information security and fraud like account take-over, malware attacks, and phishing and spoofing schemes.
The issuance of a circular on social media risks management program was “timely and suitable” because of the rising number of Filipinos who were active in social media, now at around 47 percent of the over 100 million population, the BSP said.
“BSP recognizes that social media presents vast potential benefits and opportunities for greater economic advancement and financial inclusion.
The guidelines ensure that the necessary safeguards, governance structure and standards are in place to effectively manage the associated risks,” it added.
The BSP said banks’ social media risk management program “should, at a minimum, be able to address potential reputational risks as well as provide guidance on acceptable use of social media by employees, whether for official or personal purposes.”
“BSFIs (BSP Supervised Financial Institutions), in formulating and implementing their social media policies, should see to it that existing rules and regulations on financial consumer protection, cyber-security, outsourcing and anti-money laundering, among others, are complied with,” it added.
RIZA LOZADA