BSP approves rules for ‘branch-lite’ units
By Melissa Luz T. Lopez,
Senior Reporter
THE CENTRAL BANK will soon allow banks to set up dressed-down branches nationwide, as the regulator eases rules on banking offices in a bid to boost financial inclusion.
In a statement, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) said they have approved the option for banks to set up “branch-lite” units, which will allow lenders to set up simplified service outlets from the prescribed brick-and-mortar space.
“A branch-lite is considered a full branch, but then the bank would have the flexibility in designing the branch. It could be the look may not be so formal, because you can’t avoid that some people may be intimidated with the look of a branch,” BSP Deputy Governor Chuchi G. Fonacier told reporters in a recent ambush interview.
For one, Ms. Fonacier said a lite branch may be set up in a marketplace, which would effectively extend full banking services within a structure that’s more open and enticing to low-income Filipinos, versus the imposing vibe of branches often seen in business districts.
Lower processing fees will also be imposed on transactions done in these smaller bank outlets.
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. However, branch-lite offices will be excluded from the computation of capital requirements.
All banks may choose to set up branch-lite units, although such plans would still have to be approved by the Monetary Board similar to proposals to open other banking offices.
Through this, the BSP hopes to bring financial services to 570 cities and towns in the country which have no access to banks.
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.
“With simplified and more flexible provisions, banks will be better able to expand in areas which are unbanked and underserved,” the central bank said, noting that the new rules allow enough room to tailor-fit services for the low-income market.
“The banking products offered in branch-lite units shall exclude those suited for sophisticated clients with high risk tolerance,” the BSP added.
Ms. Fonacier said the branch-lite offices would likewise “level the playing field” between banks and non-bank players in serving rural areas, as it allows room for competition in serving these markets.
Another reform eyed by the central bank is the creation of basic deposit accounts which will have no maintaining balances. This is seen to serve as the entry point for unbanked Filipinos to finally get aboard the formal financial system.
