Quantcast
Latest Stories

BSP: Small banks may now sell financial products

Rural customers may take out loans, insurance policies

By

Rural and thrift banks are now allowed to sell financial products such as insurance plans and credit cards of their sister firms, according to the central bank.

The cross-selling of products was formerly restricted to universal banks, under the Bangko Sentral ng Pilipinas’ (BSP) previous guidelines. By allowing the small banks to deal in financial products, the BSP hopes to curb the activities of loan sharks and improve access to formal financial services in the Philippines, where over a third of the population is still considered “unbanked.”

“This reform initiative makes available to consumers a broader array of financial products using the existing branch network of the banking system,” BSP Amando M. Tetangco Jr. earlier said. The changes in cross-selling rules were initially announced last month.

Cross-selling is an international practice that separates the production of a financial product or service from its distribution. Under the guidelines approved by the BSP’s Monetary Board, bank premises are used as access points for financial products offered by related parties.

Under the new set of rules, all types of banks may now cross-sell credit cards and auto, home mortgage, personal and other retail loans; term, life, non-life and other protection-type insurance products; cash, debit and related products; and other similar financial instruments that may be authorized by the BSP.

While all types of banks are now covered by the new rules, the BSP said a lender would still need to maintain a CAMELS rating of at least “3” before it can engage in cross-selling.

A bank’s financial health may be measured in terms of CAMELS, which stands for capital adequacy, assets, management capability, earnings, liquidity, and sensitivity to market risks.

The new rules restrict the kinds of products that can be cross-sold. Small banks may only deal in products that carry little to no investment risk to protect consumers from volatile financial markets.

The BSP also said bank employees should be clearly distinguished from those of a bank’s sister company who deal in financial products.

These segregation rules were added “to avoid any impression that products cross-sold within bank premises are guaranteed by the bank,” the BSP said.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Bangko Sentral ng Pilipinas , Banking , cross-selling , Finance , financial products , Philippines , rural banks , small banks , thrift banks



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • What Went Before: Malacañang allies alleged involvement in pork scam
  • Timeline: Napoles tell-all
  • 12 senators on Napoles ‘pork’ list, says Lacson
  • Napoles surgery in Makati hospital successful
  • Save the queen? Aide takes fall for Enrile, Gigi Reyes
  • Sports

  • Mixers trim Aces; Painters repulse Bolts
  • Donaire junks Garcia as coach, taps father
  • ’Bye Ginebra: No heavy heart this time
  • UAAP board tackles new rules
  • Baguio climb to decide Le Tour de Filipinas
  • Lifestyle

  • The best flavors of summer in one bite, and more
  • Homemade yogurt, bread blended with pizza, even ramen
  • Visiting chefs from Denmark get creative with ‘ube,’ ‘ buko,’ ‘calamansi,’ mangoes
  • Salted baked potatoes
  • A first in a mall: Authentic Greek yogurt–made fresh in front of diners
  • Entertainment

  • Return of ‘Ibong Adarna’
  • Practical Phytos plans his future
  • In love … with acting
  • From prison to the peak of success
  • ‘Asedillo’ location thrives
  • Business

  • This time, BIR goes after florists
  • Philippine Airlines to stop shipment of shark fins
  • PH banks not ready for Asean integration
  • Stocks down on profit-taking
  • Banks allowed to use ‘cloud’
  • Technology

  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Opinion

  • Editorial cartoon, April 24, 2014
  • Talking to Janet
  • Respite
  • Bucket list
  • JPII in 1981: walking a tightrope
  • Global Nation

  • PH seeks ‘clearer assurance’ from US
  • China and rivals sign naval pact to ease maritime tensions
  • What Went Before: Manila bus hostage crisis
  • Obama arrives in Tokyo, first stop of 4-nation tour
  • Believe it or not: Filipinos love US more than Yanks
  • Marketplace