Perks await banks offering basic deposit accounts – BSP

Perks await banks offering basic deposit accounts – BSP

MANILA, Philippines — Banks ramping up their basic deposit account portfolio are now entitled to incentives, including the reduction of annual supervisory fees for two years and the waiver of central bank fees, the Bangko Sentral ng Pilipinas (BSP) said.

BSP Deputy Governor Chuchi Fonacier said the Monetary Board has approved the adoption of temporary regulatory relief for banks that offer basic deposit accounts.

These perks, she said, include the lowering of the annual supervisory fees for 2022 and 2023 by reducing the bank’s average assessable assets by the average amount of basic deposit account maintained in the preceding year.

“For this purpose, the average amount of basic deposit account maintained in the preceding year will be computed based on the bank’s basic deposit account balance as of quarter-end reporting period and adjusted by a multiplier of five,” Fonacier said.

Likewise, she said BSP fees related to the application of advanced electronic payment and financial supervision (EPFS) would be waived for 2022 for banks that intend to use the service to support the offering of basic deposit accounts.

The BSP official said banks could allow the opening of basic deposit accounts even without the presentation of identification (ID) cards as long as customers submit duly signed and notarized certification, either in physical or electronic form, that he or she has no valid ID.

The activities of the basic deposit account should be subject to ongoing monitoring by banks to identify potential abuse of the relaxed requirement and suspicious transactions should be reported to the Anti-Money Laundering Council (AMLC).

Furthermore, Fonacier said the basic deposit account should be converted into a regular deposit account once the P50,000 maximum threshold balance is exceeded.

The basic deposit account features an initial deposit requirement capped at P100 and simplified identification requirements to open an account. It has no maintaining balance and dormancy charges.

Since the introduction of the basic deposit account framework in 2018 to encourage more Filipinos to open bank accounts, there are now more than 130 banks offering the low cost, no frills deposit account.

BSP Governor Benjamin Diokno earlier reported the number of basic deposit accounts reached 7.4 million as of the end of the second quarter this year from only four million in 2019.

Likewise, Diokno said the aggregate amount of basic deposit accounts reached P4.9 billion as of end-June this year.

With the pandemic serving as catalyst, the number of active electronic money accounts almost doubled to 34.7 million in 2020 from 17.9 million in 2019 and the share of volume of digital payments to total retail transactions reached 20.1 percent from 14 percent.

Under the Digital Payments Transformation Roadmap, the BSP aims to increase the number of Filipino adults with bank accounts to 70 percent and convert 50 percent of total retail transactions to electronic channels by 2023.