Recent
BSP
Regula.ons:
        Opportuni.es
for
Rural
Banks
                        Pia
Bernade9e
Roman
Tayag
            ...
Save                                      Invest•  Microentrepreneur
      Borrow   living
in
Baggao,

   Cagayan
•  1st
c...
How
do
Recent
BSP
Regula.ons
Allow
Banks
to
Address
this
Market
Need?
•  Wider
Range
of
Products
•  Expanded
Physical
Netw...
Wide
Range
of
Products
•  Circular
694,
Notes
on
Microfinance
    – Microfinance
Loans
       • Microenterprise
Loans
      ...
Opportunity
for
Rural
Banks
•  Become
more
responsive
to
the
wide
range
of
client
   needs
•  Increase
the
microfinance
cli...
Expanded
Physical
Network
•  Circular
694,
Establishment
of
Micro‐banking
Offices
   (MBOs)
    – Addresses
obstacles
in
est...
Expanded
Physical
Network
•  Circular
694,
Establishment
of
Micro‐banking
Offices
   (MBOs)
    – Expands
the
products
and
s...
Expanded
Physical
Network
•  Circular
694,
Establishment
of
Micro‐banking
Offices
   (MBOs)
    – Provides
requirements
prop...
Opportuni.es
for
Rural
Banks
•  Set
up
presence
in
areas
which
were
too
expensive
to
   serve
(i.e.
hard‐to‐reach,
etc.)
•...
Expanded
Virtual
Reach

•  Circular
649,
Electronic
Money
Circular
    – Defines
electronic
money
    – Allows
the
establis...
Opportunity
for
Rural
Banks
•  Develop
linkages
with
e‐money
issuers.
As
clients
can
   transact
remotely
through
the
e‐mo...
Expanded
Virtual
Reach
•  Circular
704,
Electronic
Money
Network
Service
   Providers
    – Recognizes
the
poten.al
of
E‐m...
Expanded
Virtual
Reach
•  Circular
704,
Electronic
Money
Network
Service
   Providers
    – Allows
the
outsourcing
of
auto...
Opportunity
for
Rural
Banks
•  Become
an
E‐Money
Issuer
without
inves.ng
in
the
   en.re
network
infrastructure

•  By
out...
Lower
Barriers
to
Customer
Acquisi.on
•  Circular
706,
Updated
An.‐Money
Laundering
Rules
   and
Regula.ons
    – Provides...
Lower
Barriers
to
Customer
Acquisi.on
•  Circular
706,
Updated
An.‐Money
Laundering
Rules
   and
Regula.ons
    – Allows
t...
Opportuni.es
for
Rural
Banks
•  Classify
transac.ons,
based
on
appropriate
   framework,
small
value
transac.ons
as
low
ri...
The
opportuni,es
are
here
for
the
taking.
Strong
and
stable
rural
banks
are
well
posi,oned
to
seize
them.


End
of
Presenta.on.

THANK
YOU.


NRT 2011 - Recent BSP Regulations: Opportunities for Rural Banks
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NRT 2011 - Recent BSP Regulations: Opportunities for Rural Banks

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NRT 2011
May 23-24, 2011
Manila

Session 1:
Taking Advantage of New Regulations to Expand Microfinance Services

By: Ms. Pia Bernadette Roman-Tayag,
BSP Inclusive Finance Advocacy Head

Published in: Economy & Finance, Business
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NRT 2011 - Recent BSP Regulations: Opportunities for Rural Banks

  1. 1. Recent
BSP
Regula.ons:
 Opportuni.es
for
Rural
Banks
 Pia
Bernade9e
Roman
Tayag
 Inclusive
Finance
Advocacy
Staff
 Bangko
Sentral
ng
Pilipinas
 RBAP‐MABS
Na.onal
Roundtable
Conference
 23
May
2011

  2. 2. Save Invest•  Microentrepreneur
 Borrow living
in
Baggao,

 Cagayan
•  1st
class
municipality
 Send/ with
no
banking
office
 Receive Expensive
•  She
is
one
of
the
 Money Unsafe
 73,000
living
in
the
 town
 Time
Consuming
 Pay Bills•  She
manages
a
small
 Unsustainable
 sari‐sari
store
business

  3. 3. How
do
Recent
BSP
Regula.ons
Allow
Banks
to
Address
this
Market
Need?
•  Wider
Range
of
Products
•  Expanded
Physical
Network
•  Expanded
Virtual
Reach
•  Lower
Barriers
in
Customer
Acquisi.on

  4. 4. Wide
Range
of
Products
•  Circular
694,
Notes
on
Microfinance
 – Microfinance
Loans
 • Microenterprise
Loans
 • Housing
Microfinance
Loans
 • Micro‐Agri
Loans
 – Microfinance
Savings
Deposit
Account
 – Microinsurance

  5. 5. Opportunity
for
Rural
Banks
•  Become
more
responsive
to
the
wide
range
of
client
 needs
•  Increase
the
microfinance
client
base
•  Provide
microinsurance
products
which
were
 previously
an
exclusive
domain
of
large
universal
and
 commercial
banks
•  Diversify
income
streams

  6. 6. Expanded
Physical
Network
•  Circular
694,
Establishment
of
Micro‐banking
Offices
 (MBOs)
 – Addresses
obstacles
in
establishing
bank
offices
 • Rela.vely
low
cost
(i.e
low
infrastructure,
no
 theore.cal
capital
needed)
 • Need
not
be
a9ached
to
a
microfinance
bank
or
 branch

 • Viable
in
light
of
complete
range
of
product
 offerings

  7. 7. Expanded
Physical
Network
•  Circular
694,
Establishment
of
Micro‐banking
Offices
 (MBOs)
 – Expands
the
products
and
services
that
can
be
 offered
 •  Micro‐loans

 •  Micro‐deposits
 •  Check
deposits
of
exis.ng
microfinance
clients
 •  Microinsurance
 •  E‐money
Conversion
 •  Collec.on/
Pay
out
of
benefits
from
government
 •  U.lity
payments
 •  Purchase
of
foreign
currency

  8. 8. Expanded
Physical
Network
•  Circular
694,
Establishment
of
Micro‐banking
Offices
 (MBOs)
 – Provides
requirements
propor.onate
to
the
level
 of
ac.vity
 • Demonstra.on
of
bank
strength
 • Clear
reason
and
plan
for
the
establishment
of
 MBOs

  9. 9. Opportuni.es
for
Rural
Banks
•  Set
up
presence
in
areas
which
were
too
expensive
to
 serve
(i.e.
hard‐to‐reach,
etc.)
•  Capture
savings
in
areas
which
were
previously
not
 reached
through
opening
of
micro‐deposit
accounts
•  Increase
value
to
exis.ng
clients
•  Lower
costs
of
servicing
exis.ng
clients
•  Entertain
other
non‐bank
customers
which
can
 eventually
become
bank
clients
(i.e.
bills
payment,
 foreign
exchange,
etc.)
•  Possible
opportunity
as
CCT
pay‐out

  10. 10. Expanded
Virtual
Reach

•  Circular
649,
Electronic
Money
Circular
 – Defines
electronic
money
 – Allows
the
establishment
of
e‐money
issuers
 (whether
bank
or
non‐bank)
 – Provides
the
pladorm
for
an
efficient
retail
 payments
pladorm
 – Fosters
the
establishment
of
a
ubiquitous
agent
 network

  11. 11. Opportunity
for
Rural
Banks
•  Develop
linkages
with
e‐money
issuers.
As
clients
can
 transact
remotely
through
the
e‐money
pladorm,
 banks:
 – Increase
value
of
service
to
clients
 – Increase
efficiency
 – Lower
costs
•  With
exis.ng
clients,
develop
an
e‐money
ecosystem
 in
the
local
community
•  Expand
and
reach
more
clients

  12. 12. Expanded
Virtual
Reach
•  Circular
704,
Electronic
Money
Network
Service
 Providers
 – Recognizes
the
poten.al
of
E‐money
as
an
efficient
 retail
paymentc
channel
 – Recognizes
that
the
E‐Money
business
has
 specialized
opera.onal
and
technological
 requirements
 – Allows
en..es
that
want
to
be
EMIs
to
outsource
 to
EMNSPs


  13. 13. Expanded
Virtual
Reach
•  Circular
704,
Electronic
Money
Network
Service
 Providers
 – Allows
the
outsourcing
of
automated
systems,
 network
infrastructure
and
network
of
agents
 – Establishes
clear
outsourcing
rules
and
 arrangements

  14. 14. Opportunity
for
Rural
Banks
•  Become
an
E‐Money
Issuer
without
inves.ng
in
the
 en.re
network
infrastructure

•  By
outsourcing
to
an
EMNSP,
banks
will
be
able
to:
 – Use
the
wide
agent
network
established
by
the
 EMIs
 – Convert
E‐money
 – Use
E‐money
for
the
payment
for
goods/
services
 – Transfer
funds
from
one
electronic
wallet
to
 another

  15. 15. Lower
Barriers
to
Customer
Acquisi.on
•  Circular
706,
Updated
An.‐Money
Laundering
Rules
 and
Regula.ons
 – Provides
scope
for
banks
to
have
a
risk‐based
and
 .ered
system
of
classifying
customers
 – Establishes
a
framework
for
applying
reduced,
 average
and
enhanced
due
diligence
based
on
the
 type
of
customer
as
well
as
for
customer
 acceptance,
reten.on
and
iden.fica.on
process
 and
record
keeping

  16. 16. Lower
Barriers
to
Customer
Acquisi.on
•  Circular
706,
Updated
An.‐Money
Laundering
Rules
 and
Regula.ons
 – Allows
the
outsourcing
or
relying
on
a
third
party,
 the
following:
 • Face‐to‐face
requirement
 • Gathering
of
informa.on
and
documents
 – Uses
the
liberalized
list
of
accepted
IDs

  17. 17. Opportuni.es
for
Rural
Banks
•  Classify
transac.ons,
based
on
appropriate
 framework,
small
value
transac.ons
as
low
risk
•  Lower
cost
in
acquiring
customers
•  Less
physical
barriers
in
reaching
and
serving
new
 markets
•  Decreased
transac.on
cost
in
customer
reten.on
and
 record
keeping,
par.cularly
for
microfinance.
•  Increased
opportunity
in
remi9ance
business





  18. 18. The
opportuni,es
are
here
for
the
taking.
Strong
and
stable
rural
banks
are
well
posi,oned
to
seize
them.


  19. 19. End
of
Presenta.on.

THANK
YOU.



×