PDIC mulls insurance for quasi deposits
Published Aug 26, 2019 12:00 am
By Lee C. Chipongian
The banking sector’s co-regulator, the Philippine Deposit Insurance Corp. (PDIC), is studying the possibility of including e-money as part of its insurance coverage.
PDIC
At the moment, e-money or more popularly known as “e-load” which is money electronically stored in cash cards, stored value cards or e-wallets via mobile phones and other devices, are considered quasi deposits and not covered under PDIC.
“We’re studying coverage of quasi-deposits – these are e-load money – and we want to know what is the international practice (for insuring e-load). We are looking at that now,” said PDIC President Roberto B. Tan, formerly National Treasurer and finance undersecretary.
Tan said there is no immediate plan to include e-money under PDIC coverage, currently P500,000 maximum per depositor per bank, but it needs to be studied because it is a fast-growing e-money sector.
PDIC has already tied up with the Asian Development Bank to conduct the study. Tan said the objective is to have a better understanding of the e-money business and to “explore” how they can design – if required – insurance coverage and therefore provide “protection for savers” using e-money.
E-money issuers or EMIs are regulated by the Bangko Sentral ng Pilipinas (BSP) after issuing an EMI regulation in 2009. Since e-money is redeemable only at face value, does not earn interest and it is not a deposit product, PDIC does not insure it. E-money instruments have a load limit of P100,000 per month.
As of end-June this year, the BSP is supervising 31 banks with EMIs, two non-banks with EMIs Omnipay and Metrobank Card, and 12 EMIs such as Globe/G-Xchange for its G-Cash, PayMaya, AliPay, and Grab’s GPay.
In 2009, the BSP issued its first EMI circular to “provide protection for consumers and to promote innovations in fund transfer mechanisms.” Under this circular, these purely EMIs mush have P100 million as capital and are engaged only in the business of e-money.
PDIC
At the moment, e-money or more popularly known as “e-load” which is money electronically stored in cash cards, stored value cards or e-wallets via mobile phones and other devices, are considered quasi deposits and not covered under PDIC.
“We’re studying coverage of quasi-deposits – these are e-load money – and we want to know what is the international practice (for insuring e-load). We are looking at that now,” said PDIC President Roberto B. Tan, formerly National Treasurer and finance undersecretary.
Tan said there is no immediate plan to include e-money under PDIC coverage, currently P500,000 maximum per depositor per bank, but it needs to be studied because it is a fast-growing e-money sector.
PDIC has already tied up with the Asian Development Bank to conduct the study. Tan said the objective is to have a better understanding of the e-money business and to “explore” how they can design – if required – insurance coverage and therefore provide “protection for savers” using e-money.
E-money issuers or EMIs are regulated by the Bangko Sentral ng Pilipinas (BSP) after issuing an EMI regulation in 2009. Since e-money is redeemable only at face value, does not earn interest and it is not a deposit product, PDIC does not insure it. E-money instruments have a load limit of P100,000 per month.
As of end-June this year, the BSP is supervising 31 banks with EMIs, two non-banks with EMIs Omnipay and Metrobank Card, and 12 EMIs such as Globe/G-Xchange for its G-Cash, PayMaya, AliPay, and Grab’s GPay.
In 2009, the BSP issued its first EMI circular to “provide protection for consumers and to promote innovations in fund transfer mechanisms.” Under this circular, these purely EMIs mush have P100 million as capital and are engaged only in the business of e-money.