The Bangko Sentral ng Pilipinas plans to roll out a framework to make the opening of banks accounts easier in a bid to reach out to unbanked individuals.
Bangko Sentral Deputy Governor Nestor Espenilla Jr. said this move would contribute to the financial inclusion efforts of the government.
“We are going to fast-track this because that’s the entry point for the unbanked. Low requirements, no fees, no frills… It’s easy to open,” Espenilla told reporters in an interview.
“It is still in the process but the idea is that the requirements for KYC [know your customers] should be easier, fees should be lighter or none. Those are the basics and also the barrier to entry,” he said.
Espenilla said these banks accounts should have no maintaining balance.
He said with the new framework, the beneficiaries of the government’s conditional cash transfer program would be encouraged to open their own bank accounts.
“People most of the time choose not to open a bank account due to so much requirements, even if it involves small- value transactions….. That is the pain points,” he said.
Bangko Sentral earlier urged banks and other financial institutions to put up more branches nationwide so that financial services would be felt by the large number of unbanked Filipino households.
The result of the latest Consumer Finance Survey showed 86 percent of Filipino households did not have a deposit account, while only 14 percent saved their money in banks.
The foremost reason cited by respondents for not opening a deposit account was not having enough money to keep an account. They also cited the far location of a bank, high service charges, a high minimum balance and lack of trust on banks.
The survey showed that majority of household heads employed in private establishments and government were banked. In contrast, majority of household heads who were self-employed or were working for private household and other household’s farms or were in other informal occupations were unbanked.
Banks were the most popular type of depository institution. These included commercial banks (50.2 percent), rural/cooperative banks (13.8 percent), savings/thrift banks (10.1 percent), and microfinance banks (9 percent).
The banking system held 83.1 percent of deposit accounts of households. Other depository institutions of households were multi-purpose/credit cooperative (11.4 percent), paluwagan (4.1 percent) and savings and loan association (3.6 percent).