Digital Banks to Register as Submitting Entities under CISA law
On April 28, 2022, the Credit Information Corporation (CIC) issued a press release directing digital banks accredited by the the Bangko Sentral ng Pilipinas (BSP) to register as a Submitting Entity (SE) in accordance with Republic Act 9510 or the Credit Information System Act (CISA).
The CIC earlier released Letter Circular No. 2022-05 series of 2022 notifying digital banks of their inclusion under the coverage of CISA, and informing them to commence registration as an SE within 10 calendar days from the issuance of the BSP Circular Letter granting them of their Certificate of Authority to Operate.
BSP Circular No. 1105, series of 2020 defines a digital bank as, “[that which] offers financial products and services that are processed end-to-end through a digital platform or electronic channels with no physical branch, sub-branch, or branch-lite unit offering financial products and services.”
Submitting Entities refer to entities that provide credit facilities such as banks, quasi-banks, trust entities, investment houses, financing companies, cooperatives, non-governmental, micro-financing organizations, credit card companies, insurance companies, and government lending institutions.
According to CIC President and CEO Joshua Baltazar: “The registration of digital banks as SEs is a valuable addition to the CIC database, especially as digital banks have the potential of penetrating the unbanked sectors[.]”
The press release highlighted that compliance may aid in the financial recovery of micro, small and medium enterprises (MSMEs). Good payment behavior may serve as proof of creditworthiness.
PCEO Baltazar also underscored the value of diverse and comprehensive credit data. He stated that: “Being a key driver of the country’s digital transformation, [digital bank’s] participation in the Credit Information System can serve as a catalyst for broad-based financial inclusion and improved access to credit.”
The full press release can be found here.
Letter Circular No. 2022-05 series of 2022 can be accessed here.