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Philippine central bank approves plan for "branch-lite" units

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Philippine central bank approves plan for "branch-lite" units

The Philippine central bank approved a plan for lenders to open branches that are excluded from capital requirement calculations, in a bid to widen their presence to unbanked areas, Business World reported June 5, citing central bank Deputy Governor Chuchi Fonacier.

The Bangko Sentral ng Pilipinas greenlit the opening of 45 "branch-lite" units, the governor said, most of which fall under microfinance-focused rural bank CARD Bank Inc. More applications are being processed.

CARD Bank also converted 752 of its existing microbanking offices into branch-lite units. The report added Philippine National Bank, City Savings Bank Inc. and the Rural Bank of Makati are among other lenders that will open such offices.

A branch-lite outlet is treated as a fully operational bank branch, but exempted from the conventional design standards of the central bank, along with the computation of capital requirements. It targets low-risk clients and is tailored to the needs of a particular community.

Such units may offer clients a minimum deposit of 100 pesos with no maintaining balance, so as to speed up customer onboarding and digital banking activity in the country.

Based on central bank data, there are 554 towns and cities in the Philippines, out of 1,634, with no banking presence as of end-2017. Further, just about a third of adults maintain formal banking accounts, the report said.

As of June 4, US$1 was equivalent to 52.58 Philippine pesos.