BSP issues stricter transparency rules

For cash agents, remittance centers

Banks with cash agents should ensure customers have access to information verification and could easily file complaints when needed as part of stricter rules on cash agent operations, according to Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier.

Fonacier also said that non-banks with remittance and transfer companies (RTCs) are instructed to implement measures to properly inform and protect consumers, and to have more transparency particularly in accrediting remittance sub-agents (RSAs).

Fonacier signed and released the two memorandum orders late Friday.

“Full disclosure and utmost transparency, to the extent allowed under applicable laws and regulations, are the critical elements that empower the consumer to make comparisons and informed financial decisions,” she said in Memorandum Order No. M-2021-032 (Guidelines on Disclosure and Transparency of Remittance and Transfer Companies and their Remittance Sub-Agents).

“This is made possible by providing the consumer with ready access to information that accurately represents the nature and structure of the product or service, its

terms and conditions, as well as its fundamental benefits and risks,” she added.

Fonacier reminded non-banks operating remittance businesses to provide its customers what it called a “reasonable holistic” understanding of the products and services they are getting especially benefits and risks.

In a separate reminder as Memorandum Order No. M-2021-031 (Guidelines on Cash Agents), Fonacier said banks must always make sure their customers are “adequately informed and protected” when transacting with their cash agents, and “should provide mechanisms for their customers to verify accredited agents and to lodge complaints for agent-related transactions.”

The BSP currently allow banks to have third parties as cash agents based on outsourcing, electronic banking, anti-money laundering, consumer protection, bank secrecy, and customer data confidentiality rules. Through these cash agents, customers can transact online, do real-time deposit and withdrawal transactions for their own accounts, fund transfers, bills payment (self service transactions), and payments.

Fonacier however reminded banks that they are accountable to their customers for all bank-related transactions via their cash agents. The BSP described these cash agents as cash rich third party entities operating many outlets such as convenience stores, pharmacies and other highly accessible retail outlets.

Based on the memo, the BSP wants a bank with cash agent operation to: clearly state in all advertising and marketing materials, terms and conditions on

the use of agents, and other forms of communication, that the banking products and services are products and services of the bank; and to ensure identification of the bank’s accredited cash agents and to protect the customers from transacting with unauthorized agents.

“The bank shall establish a mechanism for handling complaints on cash

agent-related transactions including the committed turn-around time to respond to its clients. The said mechanism should be posted in the bank’s website,” said Fonacier.

The memo also have other instructions such as a statement that the cash agent is accredited by the bank, and to publish on its website or in any other media platforms, an updated list of its accredited cash agents.

Rules on cash agents, under BSP’s “expansive network of low-cost touchpoint” agenda, was first approved in 2017 where banks can serve clients through cash agents which can accept and disburse cash on behalf of the bank. As per BSP rules, cash agents can perform Know-Your-Customer procedures as well as collect and forward application documents for loan and account opening.

Based on the BSP’s 2019 financial inclusion survey, they’ve registered some 17,057 cash agents.

In the meantime, the BSP issued a reminder over the weekend that banks

— under the provisions of Republic Act No. 1105 or the Philippine Identification System Act (PhilSys) — that the PhilID card by itself is sufficient proof of identification and all banks are directed to honor and accept the national ID in all bank transactions without the need to present any other documentary requirements.

Citing the same 2019 survey, the BSP said documentary requirements is one of the top challenges in opening a bank account. “With the PhilID card, unbanked Filipinos will be empowered to open bank accounts, including basic deposit accounts (BDA),” said the BSP.

BDAs are low-cost and easy-to-open account, with just P100 initial deposit. The latest data show that 133 banks have BDAs. As of end-2020, there are P4.7 billion worth of BDAs.

“The PhilSys will be a strategic enabler for a more inclusive new economy, bringing us closer to our shared vision of prosperity for all,” said BSP Governor Benjamin E. Diokno in the statement.

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