Some senators on Thursday have called on the country’s banks to take responsibility for the operations of their “cash agents” to make sure that the banking public is protected, especially those who rely on “padala” or money sent by relatives to help them get by during the coronavirus (COVID-19) pandemic.
Senator Grace Poe, who chairs the Senate committee on banks, financial institutions and currencies, made the pitch as the panel looked forward to formalizing accountabilities and making banks take responsibility for their cash agents through the approval of the various bills that aims to establish the “Bangko sa Baryo Act.”
The measures—Senate Bill Nos 1643 and 1682 and House Bill No. 6924—seek to institutionalize the Bangko Sentral ng Pilipinas (BSP) Circular No. 940 which allows banks to serve clients through cash agents who can accept and disburse cash on behalf of the bank.
The BSP has been pushing for the measure to attain financial inclusion in far-flung provinces in the country as the proposal seeks to enable banks to expand service delivery channels thorugh cash agents.
“Many of our countrymen are intimidated to go to banks, that’s why there’s this informal economy and underground lenders. Even if the terms aren’t good, they gravitate towards them out of familiarity,” Poe said during the committee hearing.
“This is precisely the objective of the bills…they want the amount remitted by OFWs (overseas Filipino workers) to be free from exorbitant, if not usurious interest rates, and prohibitive banking fees,” she said.
“Especially in this time of a global pandemic, it is truly unconscionable to subject our OFWs to such an inequitable ordeal,” Poe pointed out.
According to the BSP, there are currently 17,000 cash agents in the country now serving at least 79 percent of the country’s population.
The BSP said 13 banks have contracted cash agent operations and they are authorized to select their cash agents using their own criteria.
While the BSP requires banks to get its approval in selecting cash agents, the choice and the parameters of their engagement also rest with the banks.
“We must ensure full accountability as we seek to institutionalize the inclusion of cash agents in serving the unbanked,” Poe stressed.
Senate Minority Leader Franklin Drilon also said it is imperative that banks “exercise due diligence” to ensure that its cash agents comply with applicable rules, regulations and policies on anti-money laundering, consumer protection, bank secrecy and customer data confidentiality.
“Instead of due diligence, it should be ‘extraordinary’ diligence,” Drilon stressed as he suggests changes on the “principal liability for agents” clause in the proposed measure.
“We should make the rules clear so that the depositing public will not be holding the empty bag. We should exact the highest degree of diligence on these cash agents,” the minority leader further said. [