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Friday, March 29, 2024

‘Banks’ accountability for cash agents will protect consumers’

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SENATOR Grace L. Poe reminded banks to “take responsibility” for their cash agents.

Poe conveyed the reminder as she chaired a hearing on July 22 of the Senate committee on banks and financial institutions. The hearing was held jointly with the committees on labor, national defense and reconciliation. The members tackled the proposed “Bangko sa Baryo” and “Philippine Veterans Bank” bills and the proposed Overseas Filipino Workers (OFW) Remittance Protection Act, among other pending bills.

At the outset, Poe asserted that “holding banks accountable for the actions of their cash agents will provide better protection for consumers, especially those who rely on the ‘padala’ (remittance) of their relatives to help them get by during these trying times.”

She suggested that the central bank’s push for financial inclusion will benefit from the necessary safeguards and encourage more to consider tapping the services of formal channels.

“Many of our countrymen are intimidated to go to banks; that’s why there is this informal economy and underground lenders,” Poe said noting that “even if the terms are not good, they gravitate toward them out of familiarity.”

Poe pointed this out at the hearing called to tackle proposals for a “Bangko sa Baryo” that seeks to serve the banking needs of provincial clients all over the country.

At the same time, the senator took note that the Bangko Sentral ng Pilipinas (BSP) reported to the panel there are 17,000 cash agents in the country “now serving 79 percent of the country that suggests 21 percent remain un-served.”

The BSP said that 13 banks have cash agent operations and it is purely up to the banks on how they would choose their cash agents based on their selection criteria. The BSP added that while it “requires banks to get its approval when getting cash agents, the choice of which cash agents to get and the parameters of their engagement also rest with the banks.”

In turn, the Senate panel is now looking at formalizing accountabilities and making banks take responsibility for their cash agents by spelling out safeguards in the proposed law.

“We must ensure full accountability as we seek to institutionalize the inclusion of cash agents in serving the unbanked,” Poe said.

She added that apart from the remittances to relatives within the Philippines, OFWs will also benefit from such safeguards.

At the same time, the Philippine Statistics Authority estimated the number of OFWs at 2.2 million in 2019 and their remittances amounted to over $33.5 billion.

Read full article on BusinessMirror

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