Cebu bankers back BSP’s low deposit account policy
The Cebu Bankers Club expressed support to the central bank's policy to increase deposit account ownership by opening low deposit accounts.
CBC president Mario Fritz Palileo said this is definitely a good move by the Bangko Sentral ng Pilipinas.
"This is a good move by BSP which is the thrust of Governor Nestor Espenilla, Jr.," he told The FREEMAN.
The bank executive called for the need for banks to set up an online platform where clients can open accounts without having to make an initial deposit.
"For this to happen, my opinion is to provide a venue through online where clients do not need to make an initial deposit in opening an account, especially savings account," Palileo explained.
The CBC official added that banks must allow clients to only make a deposit when they visit the bank breach.
He believes other bank transactions like opening an account can be done online.
The CBC was optimistic this new BSP policy will further increase the number of Filipinos owning a bank account.
People particularly those in marginalized sectors generally do not have deposit accounts because of high opening and maintaining balance.
Now the BSP wants banks to offer deposit accounts with less than P100 opening amount and no minimum maintaining balance.
BSP-Cebu regional director Leonides Sumbi earlier said this move is one of the keys to increase financial inclusion in the country.
"The very low opening balance would allow people with not much to save to avail of banking services for a very minimal amount," she said.
Ownership of an account provides Filipinos the tool to save and transact money in a safe, convenient and affordable manner. It can unlock access to a wider range of financial services to meet their various needs, including credit, insurance and investments.
According to World Bank Global Findex (2014), only 31.3 percent of Filipino adults have formal accounts. The usual barriers include costs, lack of money, lack of documentary requirements, and perceived low utility of a bank account, among others.
The features of basic deposit account set by BSP include simplified knowyour-customer (KYC) requirements; an opening amount of less than P100; no minimum maintaining balance; and no dormancy charges.
These features meet the need of the unbanked for a low-cost, no-frills deposit account which they can open even if they do not have the standard identification documents.
"Banks can customize their basic deposit account product to serve wider markets and harness technological innovations in client onboarding and servicing of the account, provided the necessary controls are in place and the specified minimum key features are strictly observed," the bank regulator earlier said.
The basic deposit account supports the implementation of the National Retail Payments System (NRPS) that aims to increase adoption of digital payments in the country.
By having a transactional account, the previously unbanked will be able to participate in the digital finance ecosystem and benefit from electronic fund transfers for their remittance and payment needs. The BSP expects that the basic deposit account will provide the much needed boost in expanding formal account ownership and usage in the country, particularly among the unserved lowincome markets.