By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) has approved 68 new branch applications in the last quarter of 2018, of which 58 are for branch lite units.
Based on a BSP circular letter, there were only seven regular branch applications during the period – four are from the big banks, namely Bank of the Philippine Islands and Development Bank of the Philippines, and three from rural banks. There were just three microfinance-oriented branch applications and these came from rural banks.
The BSP noted that for the fourth quarter 2018, 45 regular branches by the large lenders – these are the universal and commercial banks – were opened during this period. There were an additional 20 opened thrift bank regular branches and another 20 by rural banks.
Thrift banks opened 75 branch lite units compared to rural banks’ 61 and big banks’ eight branch lite units. Only rural banks opened five microfinance-oriented branches in the last three months of 2018.
The BSP has started listing all non-regular bank branches as branch lite units in 2018. This means that banks’ extension offices, microbanking offices and other banking offices are now referred to as branch lite units.
Regular branches are full-sized banks, mostly traditional brick and mortar branches or contained within a building and offers full banking services. It is a permanent office or place of business other than the head office where a bank may perform activities and provide products and services that are within the scope of its authority and relevant licenses.
The difference between regular branches and branch lite units is that the latter have limited banking activities but could provide a wide range of products and services suited for servicing the needs of the market except for sophisticated clients with aggressive risk tolerance.
The BSP allows conversion of regular branches into branch lite units. A special licensing fee costs P5 million if the applicant is a universal and commercial bank, P3 million for thrift banks and P300,000 for the smaller rural/cooperative bank.
Compared to same time in 2017, the BSP only approved 17 new regular branch applications, of which the big banks had 12 approvals. At the time, the BSP still uses the category of microbanking offices and regular other banking offices.
The BSP said the policy initiative for the rationalization of banking offices is to further develop a more inclusive banking system.