THE Bangko Sentral ng Pilipinas (BSP) is looking at setting a “hard deadline” for banks to comply with the required upgrade of card technology, after some banks failed to meet the required shift within deadline.
In a recent interview, BSP Deputy Governor for the Supervision and Examination Sector Nestor Espenilla Jr. admitted that banks have varying degrees of preparedness in the mandated shift from the magnetic-stripe card technology to the chip-based card technology.
The Central Bank has earlier ordered banks to shift their issued cards from magnetic-stripe technology to a more secure EMV chip-enabled card by the start of 2017.
However, Espenilla said banks are still on their way to meeting the requirement.
“The reality is not everyone is completely ready. Others are more ready than some and that’s specifically more challenging for the bigger banks with lots of card base,” he said.
As such, the BSP is looking to set a hard deadline for all banks, with stiff sanctions for non-compliance.
Espenilla said the Central Bank has not set the specifics of the deadline yet, as reports are still to be submitted to the Monetary Board.
At present, the Central Bank adopts a liability shift framework, where banks that still use the magnetic-stripe technology are fully accountable for the potential losses owing to the weaknesses of the technology.
“There’s already, in a way, a market punishment. But we also still need another deadline regarding everybody possibly a hard deadline,” Espenilla said.
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