The Bangko Sentral ng Pilipinas (BSP) revised their regulations on financial consumer protection, with a particular provision that orders banks to avoid discrimination against clients that belong to “vulnerable groups.”
In a recently released statement, the BSP announced that the Monetary Board approved the revision of the BSP Regulations on Financial Consumer Protection Framework under Circular 857 issued in 2014.
In particular, the new framework retains the five consumer protection standards of conduct—disclosure and transparency, protection of client information, fair treatment, effective recourse mechanism, and financial education and awareness.
In addition, the new framework emphasizes, among others, that BSP-supervised financial institutions should not employ practices that discriminate or take advantage of vulnerable groups, such as low-income earners or persons with disability.
“This is part of the BSP’s commitment to promote broad and convenient access to high-quality financial services and consider the interest of the general public, as mandated by its amended charter,” the BSP said.
“In doing so, the BSP aims to ensure that financial service providers conduct ethical business practices and do not engage in practices that may cause harm to the consumer in the conduct of their business,” it added.
To facilitate transition, banks are mandated to perform a gap analysis of their current consumer protection practices in relation to the new rules and to propose an action plan duly approved by the board of directors to comply with.
The BSP said the new circular also has principles-based consumer protection regulations that are aligned with its risk governance and compliance frameworks and are consistent with international practices and standards.
“Also, taking into account the emerging risks associated with digital financial products and services, the circular provides flexibility for the banks to strategize its consumer protection approach commensurate with its business model, corporate structure and risk profile,” the BSP added.