price transparency and microfinance related regulations
DESCRIPTION
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.TRANSCRIPT
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