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BSP revises guidelines on operations of e-money

Citing protecting customers from IT-related risks, the Bangko Sentral ng Pilipinas (BSP) has announced the changes in the electronic money (e-money) operations in the Philippines.

In a media advisory, the BSP said the revised guidelines included setting higher liquidity and capital requirements for electronic money issuers (EMI) depending on the scale of operations.

“The amendments are geared toward equipping EMIs in attending to the evolving needs and behaviors of consumers and in responding to the existing and emerging risks in the financial sector, such as cybersecurity and money laundering,” said Bangko Sentral Governor Felipe Medalla. “The revised guidelines reaffirm the BSP’s commitment to upholding the welfare of Filipinos by promoting a safe, secure, and inclusive financial system.”

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Under the amended guidelines, “EMIs with monthly outstanding e-money balance of at least P100 million are required to maintain liquid assets in trust accounts equivalent to at least 50% of their outstanding e-money balance and to cover the remaining balance with placements in bank deposits, government securities, or other liquid assets acceptable to the BSP. 

Capital requirements

EMIs with outstanding E-money balance below P100 million may continue to comply with the liquidity requirements by holding eligible liquid assets.

The amendments also simplified the classification of EMIs into two categories: EMI-Banks

EMI Non-Bank Financial Institutions (EMI-NBFI), wherein the latter may include cooperatives. EMIs previously classified as EMI-Others will be grouped under EMI-NBFI. 

Under the new rules, EMIs with large-scale operations, or those with a 12-month average value of aggregated inflow and outflow transactions equal to or greater than P25.0 billion, are now required to set out higher minimum capital requirements as they have higher risk exposures. They are now required to maintain minimum capital of P200 million while the minimum capital requirement for small-scale EMIs is P100 million.

The BSP lifted the P100,000 monthly aggregate load limit and now allows EMIs to set pre-defined limits and thresholds per client category based on the results of their institutional risk assessment and customer due diligence process.

The guidelines also expanded the definition of e-money to include those that may be transferred to other accounts as compared with earlier regulations limiting it to only those withdrawable in cash or cash equivalent.  The new rules broadened the acceptability of e-money to include merchants and issuers using the same mobile application.

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