Bangko Sentral ng Pilipinas (File photo / Philippine Daily Inquirer)
In a bid to promote efficiency and reduce business costs, the central bank on Monday said it would no longer require financial institutions to seek prior approval for the most basic banking operations like closing or relocating branches — part of the regulator’s broader thrust of streamlining its licensing scheme.
In a statement, the Bangko Sentral ng Pilipinas said the Monetary Board approved the move in line with the thrust of applying the risk-based approach to the licensing process and promote ease of doing business on supervised financial institutions asking for special authorities.
The guidelines classify licenses for special authorities into three categories namely, Types A, B and C licenses.
“The requirements set out for each category are proportionate to the magnitude of risks that may arise from engaging in a specific activity and take into account the capability of the [financial institutions] to manage the risks,” the central bank said.
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Banks’ move to rationalize their branch networks are classified as Type C activities which no longer require prior approval since these are largely part of business decisions made to manage operations.
“The [financial institution] only needs to notify the BSP that it intends to engage in Type C activities, which include, among others, relocation of approved but unopened branches or ‘branch lite’ units, permanent closure and surrender of branch license and servicing of deposits outside bank premises,” the BSP said.
