BSP allows mobile ATMs outside Metro Manila

MANILA, Philippines—The Bangko Sentral ng Pilipinas has allowed mobile automated teller machines to operate outside Metro Manila amid efforts to extend banking services to more people.

The BSP issued Circular No. 735, which has removed the restriction that would limit the movement of mobile ATMS to within the National Capital Region.

In particular, the circular amends a section of the BSP’s manual of regulations for banks, which allows banks to set up stationary ATMs as well as mobile ones outside their branches provided that the sites are in centers of activity like shopping centers, supermarkets, hospitals and university campuses.

The BSP announced earlier that the Monetary Board (MB) approved changes to regulations on single borrower’s limit (SBL) related to interbank exposures of small banks.

Under the amendment, loans and credit accommodations including deposits maintained by a bank with another bank shall be subject to the SBL of 25 percent of the lending or depositing bank’s net worth or P100 million, whichever is higher.

The ceiling of P100 million will benefit banks with net worth of less than P400 million since banks with a higher net worth will already be covered by the 25-percent limit.

Banks that will benefit from the change are small banks, which play an important role in the government’s efforts to promote comprehensive rural development by making needed credit available and readily accessible in the rural areas not being served by bigger banks.

These banks have deposits and other exposures with other banks, which are necessary in their day-to-day operations, but which may be considered large as a percentage of their respective net worth.

The SBL is a measure imposed on banks to prevent undue credit concentration or excessive exposures to a particular borrower or group of related borrowers including banks.

Banking experts explain that excessive credit exposures may cause significant losses to a bank in case the borrowers default on their obligations.