BSP keeps tight watch on nonbank lenders

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The central bank has started to keep a tighter watch on nonbanks that extend loans to their customers as part of their business to ensure that the public is protected from possible abusive practices.

 

In a statement Monday, the Bangko Sentral ng Pilipinas (BSP) said it had approved the registration of the initial batch of credit-giving entities (CGE), or companies that extend loans through installment payment schemes.

 

These companies include “real estate dealers or property developers, car and other vehicle dealerships, or appliance stores,” the BSP said.

 

The voluntary registration of these companies is in line with Circulars 755  and 798, issued in April 2012 and June 2013, respectively.

 

The BSP said the registration of these companies was part of “an overall initiative to enhance consumer protection and fair practices through enhanced transparency requirements on loan transactions, and establishment of mechanisms to provide redress and recourse.”

 

Once registered with the BSP, CGEs will be required to comply with the requirements of the Truth in Lending Act or Republic Act 3765 on the disclosure of the true cost of money to clients.

 

“Similar regulations were issued by the BSP to banks and other BSP-supervised nonbank financial institutions,” the BSP said. “Related regulations were also issued by the Securities and Exchange Commission (SEC), Insurance Commission (IC) and the Cooperative Development Authority (CDA),” the BSP said.

 

The first batch of registered CGEs wasmostly non-government organizations, namely Jaime V. Ongpin Foundation,  ASA Philippines Foundation Inc., Center for Agriculture and Rural Development Inc., Lingap Pangkabataan Inc., Rantay sa Pagrang-ay Inc., Kabalikat Para sa Maunlad na Buhay Inc., Aakay ang MILAMDEC Microfinance Foundation Inc. and Aalay sa Kaunlaran Inc.

 

Another CGE was auto dealership Hyundai Alabang Inc.

 

“An entity registering with the BSP as a CGE demonstrates its commitment to corporate social responsibility,” the BSP said.

 

“A registered CGE declares its competitive edge and builds long-term value, accountability, and transparency, making the registered entity more valued by its clients and other stakeholders,” the regulator added.

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  • eight_log

    Yeah right … all you can do is to watch tightly the Bombays and the loansharks … hahahahaha!!!!

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