Banks can now use their premises to market and sell the financial products of their related parties under a banking group or a financial conglomerate, the Bangko Sentral ng Pilipinas (BSP) announced on Tuesday.
In a statement, the central bank said that the Monetary Board (MB) has liberalized the framework for the cross-selling of financial products by banks.
Cross-selling is an international practice that separates the production of a financial product or service from its distribution, it explained.
The BSP added that under the new guidelines approved by the board, bank premises are used as an access point for financial products offered by related parties.
The new rules now allow all types of banks to perform cross-selling. They also dispensed with the submission of product-by-product documentary requirements under the previous guideline, the central bank said.
It said that banks may now cross-sell credit cards and auto, home mortgage, personal and other retail loans; term, life, nonlife and other protection-type insurance products; cash, debit and related products and other similar financial instruments that may be authorized by the MB.
“This reform initiative makes available to consumers a broader array of financial products using the existing branch network of the banking system,” BSP Governor and MB Chairman Amando Tetangco Jr. said.
Furthermore, the BSP noted that while documentary requirements have been streamlined, governance standards have been strengthened.
It said that an oversight mechanism specific to cross-selling has been outlined in the new rules. Among others, a complaints handling mechanism has been instituted.
“BSP is cognizant of the need to sustain high standards of risk management. This is the reason why we limit the products to those without investment risk and allow only banks with Camels rating of at least 3 to perform cross-selling,” Tetangco added.
Mayvelin U. Caraballo