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Mr. Gerardo Butardo of Bangko Sentral ng PIlipinas (BSP) discusses latest updates on price transparency and microfinance related regulations by the BSP during the 2012 RBAP-MABS National Roundtable Conference on June 7.
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Session 1: Price Transparency and Microfinance
Related Regula9ons
Gerardo Butardo Bangko Sentral ng Pilipinas
2012 RBAP-MABS National Roundtable Conference June 7-8, 2012
Hyatt Hotel & Manila
LATEST REGULATORY
UPDATES
MABS ROUNDTABLE Hyatt Hotel 07 June 2012
BANGKO SENTRAL NG PILIPINAS
o Loan transaction transparency o Revised MF reports o Microfinance Products o Extension of MSEs exemption
o Bank – NGO relationship o Reduced barriers to customers
acquisition o Expanded Physical Network o Expanded Virtual Reach
o Coverage: o All banks; o NBFIs under BSP supervision; and o Entities with credit-granting
facilities not covered by issuances of BSP, SEC, IC and CDA
o Requires charging of interest on the outstanding balance of a loan
o Defines effective interest rate and requires that this will be the only rate used in all loan documents and marketing materials
o Requires a uniform disclosure of the loan terms
o Requires posting in conspicuous places the revised format of disclosure statement
o Report on Microfinance Products (monthly) and Income Statement on Retail Microfinance Operations (quarterly)
o Contain data on MF loans both retail
and wholesale, and micro-deposits
o Retail MF loan – refers to a loan
directly granted to end-users, e.g. m i c r o - e n t r e p r e n e u r s , microenterprises, etc.
o Wholesale MF loan – refers to a loan
granted to an FI for on-lending to qualified end-users
o “Other Loans – Microenterprises” –
loans granted to microenterprises but not classified as “microfinance loans”
o “Micro-loans” – refer to the
combined balances of “microfinance l o a n s ” a n d “ o t h e r l o a n s – microenterprises”
o Microenterprise Loan Plus or Microfinance Plus – range from P150,001 to P300,000; borrowers w/ track record of at least 2 loan cycles in the range of P50K to P150K
o Micro-Agri loans
o Amended existing regulations to i n c l u d e m i n i m u m p r u d e n t i a l requirements to approve application: o CAMELS at least “3” & MGT score of at least “3”; o CAR of at least 12%; o No major supervisory concerns o No arrearages on MF borrowings
o Micro-Agri loans o Non-compliant bank is given one
examination-cycle to correct; provided the bank submits a viable plan
o Extended exemption of loans granted to micro & smal l e n t e r p r i s e s f r o m c e r t a i n documentary requirements, e.g. ITR, audited FS, etc., up to 31 December 2014
o NGO/foundation engaged in retail MF operation and incorporated by any stockholders, directors, officers of a related bank as “related interest”
o Transactions between banks and related NGOs/foundations shall be covered with notar ized contracts/agreements classified as category A-3 reports
o Bank officers are not allowed to be
involved in the daily MF operations of related NGO/foundation
o Issuance of general principles and
standards governing business relationships between banks & their related NGO/foundations
o Introduction of a risk-based and
t i e red sys tem o f c l ass i f y ing customers, i.e. low, average & high risk)
o A framework for applying reduced,
average and enhanced due diligence, customer acceptance, retention & identification process
o Possibility of outsourcing or relying on a third party on the face to face requirement for KYC, gathering of information and documents
o Establishment of Micro-banking Offices (MBOs) o Expands the products and services that can be offered
o Micro-loans o Micro-deposits o Check deposits of existing microfinance clients o Microinsurance o E-money Conversion o Collection/ Pay out of benefits from government o Utility payments o Purchase of foreign currency
o Electronic Money Circular
o Defines electronic money o Allows the establishment of e-money issuers
(whether bank or non-bank) o Provides the platform for an efficient retail
payments platform o Fosters the establishment of a ubiquitous agent
network
Wider Range of Products • Micro-‐deposits • Microinsurance • Micro-‐agri Loans
• Housing Microfinance • Microfinance Plus
Expanded Physical Network
• Opening of Micro-‐banking Offices (MBOs)
Expanded Virtual Reach • E-‐money Issuers
• E-‐money Network Service Providers
Lower Barriers to Customer Acquisi9on
• Updated AnI-‐Money Laundering Rules
Consumer Protec9on and Financial Literacy
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