BSP to tighten rules on bank deposits

The Bangko Sentral ng Pilipinas (BSP) plans to issue a new circular that will further tighten the rules on the opening of a bank deposit by a prospective client.

BSP Gov. Rafael B. Buenaventura said this is going to be a very difficult task because the monetary authorities have to contend with certain limitations under the Bank Secrecy Law.

For instance, Buenaventura said it will be very difficult to verify if the individual banks are indeed following such rules and regulations.

Considering all these things, Buenaventura said the BSP will try to come up with rules that will not violate the bank secrecy law. He said the BSP, is studying some options which it is discussing with its legal counsel as well as with the Bankers Association of the Philippines.

The BSP governor admitted that while the BSP had already issued a circular imposing a stricter "know your client" policy, individual banks have their own internal rules and practices.

Buenaventura also acknowledged the fact that some bank branches are not as strict as they should be when it comes to big accounts in order to boost their deposits.

He said bank branches also have to meet quotas on deposit generation.

Thus, Buenaventura said, "we can come up with all the beautiful rules, but if we cannot verify them, it becomes difficult."

He said the BSP, will just have to try to find a way to monitor the banks without violating the law.

The BSP’s move is an indirect offshoot of the current impeachment trial wherein some bank records are now being looked into.

The impeachment case has shown that some deposits were opened using aliases and that the banks were not as strict in ensuring the identity of their depositor. The BSP, Buenaventura said, would like to adopt a standard that would be based on peer pressure.

He expressed the view that standards based on peer pressure would have a more potent effect on the banks.

Thus, if all banks are following the same standard, a bank that deviates would stand out.

The BSP issued last September a circular imposing stricter guidelines on numbered accounts and the know-your-client policy as part of its anti-money laundering efforts.