MORE banks are opting to open up “branch-lite” units, particularly in the countryside, in an effort to expand their reach without adhering to the stricter policy of the Bangko Sentral ng Pilipinas (BSP) required in opening aregular branch.
Data from the BSP as published in Circular Letter 2018.085 showed thrift and rural banks opened a total of 54 branch-lite units in July to September 2018 alone.
This is about a year after the BSP allowed the establishment of these so-called branch-lite units as annexes of banks, in an effort to “promote access to efficient and competitive
banking services.”
Thrift and rural banks took particular advantage of this regulation, with 27 new branch-lite units stemming from thrift banks, and 27 new branch-lite units branching from rural and cooperative banks in the third quarter of the year.
The BSP defines branch-lite units as an office or place of business of a bank that performs limited banking activities and records its transactions in the books of the head office or the branch to which it is annexed.
Since these units are limited in the services they are offering, they are also subject to proportionate regulatory framework, which means less strict rules and more flexibility to execute financial strategies and innovations.
Bulacan, Batangas, Pangasinan and Puerto Princesa were among the top areas where thrift banks established their branch-lite units, while Quirino, North Cotabato and Isabela were the top picks for rural and cooperative banks.
While branch-lite units are particularly attractive for these smaller banks as their main market is the countryside, some big banks also put up their own branch-lite units during the third quarter of the year.
In particular, the Development Bank of the Philippines put up a branch-lite unit in Naga City during the period while LandBank of the Philippines put up a branch in Tuao, Cagayan.
The Philippine National Bank, meanwhile, put up three branch-lite units during the period: one in Baybay City, one in Hinunangan, Southern Leyte and one in the Island Garden City
of Samal.
The country is also looking to have more of these simpler banking offices as the BSP also approved more than 100 branch-lite unit applications in the third quarter of the year.