BSP expands scope of micro-banking

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has issued a circular expanding the scope of allowable activities in micro-banking offices to further boost the government’s efforts in promoting financial inclusion.

BSP Governor Amando Tetangco Jr. issued Circular 901 Series of 2016 amending the Manual of Regulations for Banks (MORB) on the activities and services allowable for micro-banking offices.

“The amendment aims to expand the range of services that can be performed in micro-banking offices in line with the BSP’s thrust to promote greater access to a wide range of financial services for all Filipinos,” Tetangco said.

The BSP is tasked to promote and maximize the delivery of efficient and competitive banking services to underserved markets.

Under the new issuance, micro-banking offices would now be allowed to approve, open, and accept micro-deposits with an average daily savings account balance not exceeding P40,000 including initial deposit and service withdrawals provided that the necessary controls are in place.

The bank regulator said banks should ensure the timely accounting and proper recording of all financial transaction of its microfinance other banking offices or micro-banking offices.

Likewise, banks are required to observe adequate internal control procedures to ensure the safety of funds and reliability of financial record and reports emanating from all transactions.

Banks, the BSP added, should also take into account microfinance other banking offices of micro-banking offices and their activities in their respective compliance programs.

Latest data from the BSP showed there are 531 micro-banking offices present in 337 municipalities. It noted 11 out of 19 previously unbanked municipalities gained banking presence as a result of the establishment micro-banking offices while the remaining eight municipalities became banked because of regular other banking offices in 2014.

According to the central bank, banks have also taken advantage of the opportunities as the number of banks with micro-banking offices increased to 35 banks in 2014 from just five in 2011.

Banks are able to expand their reach at lower costs as monthly operating expense of a micro-banking office is seven to eight times lower compared to a bank branch.

Micro-banking offices are scaled-down offices providing a specified range of banking activities and services such as acceptance of micro-deposits, disbursement of micro-loans, selling of microinsurance, purchase of foreign currency, bills payments, government pay-outs, and e-money conversion.

Prior to the recently approved measure, micro-banking offices could perform the customer identification process and facilitate account activation but the approval and actual opening of the deposit account shall be done only at the head office or branch.

Clients who want to transact in micro-banking offices would therefore still need to go to a head office or branch to open a deposit account.