Banks’ basic deposit accounts (BDA) increased by 19 percent to 7.9 million as of end 2021 compared to 6.6 million in 2020, indicating more Filipinos getting access to formal financial services, according to the Bangko Sentral ng Pilipinas (BSP).
The BSP on Monday, May 30, said that as of end-December last year, BDA deposits amounted to P5.1 billion, up by 7.6 percent from P4.7 billion in 2020.
There are now 138 banks offering BDAs from 121 banks in 2020.
BDAs are low-cost, no-frills account with an initial deposit of just P100 or less. The central bank first introduced the BDA in 2018. It also has no maintaining balance, no dormancy charges, and requires only simple identification for account opening. Banks can customize their BDA products by utilizing technological innovations to on-board and service clients, said the BSP.
“Since ownership of an account is an important first step to perform digital payments, BDAs support BSP’s mutually reinforcing goals of financial inclusion and payments digitalization,” said the BSP.
Last November, to get more Filipinos to sign up for a BDA, the BSP issued regulatory relief measures. In January this year, the BSP also released a FAQ or Frequently Asked Questions as additional guidance and clarifications on BDAs’ regulatory framework.
The BSP has been encouraging banks to promote use of the BDA for financial inclusion.
The 2019 BSP Financial Inclusion Survey (FIS) showed that 29 percent or 20.9 million Filipino adults have bank accounts. The top three considerations when opening an account are initial deposit, interest rate, and maintaining balance.
Next to not having enough money, the 2019 FIS revealed that the second top reason for not owning an account is the perceived lack of need, said the BSP.
Meantime, banks with BDAs enjoy zero reserve requirement ratio as perks. However, the BSP will impose reserves when the account balance exceeds P50,000 to prevent misuse of BDAs. When it is more than P50,000, the host bank will convert a BDA into a regular account.
BDAs also enjoy reduced KYC or “Know Your Customer” requirements but the moment the balance increases above the threshold, they will automatically be shifted to an enhanced KYC scrutiny.
Source: Manila Bulletin