BSP expected to allow rural, thrift banks to do cross-selling
The Bangko Sentral ng Pilipinas is issuing a regulation that will allow thrift and rural banks to engage in cross-selling of financial instruments.
According to BSP Deputy Governor Nestor Espenilla Jr., the central bank is now refining the draft regulation after gathering inputs from banking industry members.
“Results of the BSP’s review of the industry proposal are favorable for allowing cross-selling by thrift and rural banks. We are now in the final stage of refining (the draft regulation),” Espenilla told reporters.
The banking industry earlier asked the BSP to allow smaller banks to do cross selling.
Cross selling is selling by a bank of financial instruments issued by another entity. At present, only universal and commercial banks are allowed to engage in cross-selling.
Espenilla said that under the draft regulation, products that thrift and rural banks could cross sell included insurance and credit instruments.
Industry players said that if thrift and rural banks would be allowed to engage in cross-selling, financial products would become accessible to a bigger segment of the country’s population. They said such a measure would complement efforts to make average Filipinos financially savvy.
Of the estimated 9,300 banks’ head offices and branches in the country, thrift and rural banks account for about 4,100, BSP data as of September 2012 showed.
Moreover, thrift and rural bank cater primarily to consumers and middle- to low-income earners. Financial products will, thus, be made accessible to people from these income groups and to small entrepreneurs if thrift and rural banks will be allowed to cross sell.
The expected issuance of this regulation is consistent with the BSP’s objective of making financial services reach more Filipinos, Espenilla said.
It is likewise seen to complement calls for banks to tap more clients in the micro and small enterprises segment of the market. Extension of loans and other financial services to low- and middle-income earners is seen as a prudent strategy to help reduce poverty.
