THE CENTRAL BANK is looking to allow lenders to set up “lite” branches which will allow banks to design offices that would fit lower-income segments, as part of efforts to bring more Filipinos onto formal financial channels.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said the regulator is currently drafting a new circular which eases branch requirements for all banks by introducing a “branch-lite” concept.

“The adoption of the branch lite concept provides banks with more flexibility in expanding their network and offering a wider range of financial products and services,” Ms. Fonacier said in a speech before the Chamber of Thrift Banks yesterday.

“A branch lite unit may perform activities and provide any services that any branch may perform or provide, except those suited only to sophisticated clients with high risk tolerance. These are for the low-risk clients.”

Pressed for details, the BSP official said the regulator is eyeing to release formal guidelines for this proposal “before the year ends,” noting that it will serve as a new form of banking office which a lender may set up in the country.

Existing BSP rules allow banks to set up branches — which do deposit-taking, service withdrawals, and maintain “complete sets of books of accounts — as well as extension offices and other banking offices, including microfinance units. Any plans to create new branches need to be approved by the BSP, subject to capitalization and documentary requirements.

“We’d like banks to have flexibility in on-boarding customers and in designing expansion plans, which should be tailor-fitted to the market segment they’d like to serve,” Ms. Fonacier said.

As an example, the official said a lite branch may be opened in a marketplace, which would effectively extend full banking services minus the “intimidating” brick-and-mortar structure of branches often seen in business districts.

“A lite branch may perform activities any branch can provide except those suited to sophisticated clients with high risk tolerance… You can now tailor-fit a branch,” Ms. Fonacier said, noting strong interest among players focused on consumer lending.

There are 571 cities and municipalities in the Philippines which remain underserved or unbanked, according to central bank data.

Separately, the BSP is also developing the basic deposit account to prod more Filipinos to enter formal banking channels, which will serve those who do not have regular savings accounts.

“This is crucial for clients who are still unable to open a regular savings account because of the perceived costs involved and the difficulty in complying with documentary requirements,” Ms. Fonacier said, noting that these accounts may be used for electronic payments.

The central bank and industry players are discussing whether these entry-level accounts can be offered with no maintaining balances and zero premiums for deposit insurance, the official said, although these are yet to be finalized.

The National Baseline Survey on Financial Inclusion released by the central bank in 2015 showed that only 43% of Filipino adults had savings, with 68% of them opting to keep their money at home rather than placing them as bank deposits. — Melissa Luz T. Lopez