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NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE 
S.B. No. 1710
23 JAN 19 P5:30
RECEIVED BY; C/) 
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Introduced by SENATOR IMEE R. MARCOS
AN ACT
ENABLING BANKS TO EXPAND SERVICE DELIVERY CHANNELS 
THROUGH CASH AGENTS AND PROVIDING GUIDELINES THEREFOR
EXPLANATORY NOTE
Article II, Section 20 of the 1987 Constitution provides that, "The State 
recognizes the indispensable roie of the private sector, encourages private enterprise, 
and provides incentives to needed investments."
Financial inclusion refers to individuals and businesses having access to financial 
services, including payments, savings, credit and insurance. Access to financial services 
is widely quoted as a key enabler in reducing poverty. However, a major obstacle 
toward financial inclusion is cost, especially that associated with customers living in far- 
flung areas. In the Philippines, more than 15% of all cities and municipalities have no 
banking presence. The BSP estimates that more than 44% of the country's adult 
population remains unbanked, with only 23% of Filipino adults owning a bank account. 
As such, there is a need to expand the reach of the financial sector.
In January 2017, the Bangko Sentrai ng Pilipinas approved the guidelines for 
new bank service channels and relaxed existing regulations on deposit taking activities 
outside bank services. Under the new regulations, banks are now allowed, with prior 
BSP authorization, to serve clients through cash agents. Cash agents can also perform


Know-your-Customer procedures as well as collect and forward application documents 
for loan and account opening. They may also sell and service insurance as may be 
authorized by the Insurance Commission.
The proposed measure institutionalizes the new BSP guidelines while further 
enhancing the concept of banking through cash agents. It aims to provide various 
incentives to entities who will establish its business in the remote areas of the country 
such as waiver of government fees, free training for personnel, tax benefits, and other 
benefits. The local government units shall play a crucial role in assigning areas as 
"remote" and assess the same for necessity of banking presence.
The measure defines what cash agents are and provide the corresponding 
eligibility requirements. The measure aims to ensure that agents, as extensions of the 
banking system, can provide adequate financial service.
For the abovementioned reasons, the passage of this bill is earnestly sought.
ME€^tTMARCOS


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NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
F/rst Regular Session 
)
SENATE
S.B. No. 1710
23 JAN 19 P5 30
HECEIVfcO B\.
Introduced by SENATOR IMEE R. MARCOS
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AN ACT
ENABLING BANKS TO EXPAND SERVICE DELIVERY CHANNELS 
THROUGH CASH AGENTS AND PROVIDING GUIDELINES THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
SECTION 1. Short Title. -This Act shall be known as the "ExpandedBanking 
Services Act"
SEC. 2. Declaration of Policy. - The State recognizes the vital role of banks in 
providing an environment conducive to the sustained development of the national 
economy. Towards this end, the State shall create an enabling regulatory environment 
for innovations and allow banks to exponentially expand reach through cash agents 
and serve a wider client base, particularly in the low-income and rural areas.
SEC. 3. Definition of Terms. - As used in this Act:
a) 
Cash Agent refers to a third-party person with either a
i. 
retail outlet such as but not limited to convenience stores, 
pharmacies and other highly accessible retail outlets contracted to 
deliver bank services as provided in Section 7 of this Act, or
ii. 
an e-wallet operating system;
b) 
Contracting Bank refers to any bank requesting authority from the Bangko 
Sentrai ng Pilipinas (BSP) to expand service delivery channels through 
cash agents;
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c) 
Electronic Wallet (e-wallet) refers to a software or application which 
allows the user to store money for any future online transaction.
d) 
Remote area refers to an area that either is a long distance from highly 
populated settlements or lacks transportation links that are typical in 
more populated areas duly identified by the concerned Local Government 
Unit (LGU) in coordination with the BSP;
d) Person refers to a natural or juridical person.
The Monetary Board may, by regulation, further define or clarify terms used 
consistent with this Act.
SEC. 4. Eligibility Requirements for Cash Agents. - A Cash Agent may file an 
application with a Contracting Bank provided that the following requirements are met:
a) It is a duly registered business in the Philippines;
b) It has engaged in commercial activity for at least one (1) year;
c) It has conducted its commercial activities continuously in a place and area 
that is known to the public, or in the case of e-wallet providers, has established a 
principal headquarters known to the public;
d) It possesses sufficient capacity to properly operate electronic devices; and
e) It has the necessary infrastructure to undertake banking operations.
SEC. 5. Preliminary Screening. - Upon submission of the eligibility requirements 
for a Cash Agent, the Contracting Bank shall conduct a preliminary screening of the 
documents ensuring that:
a) The result of the preliminary screening shall be released within five (5) 
working days;
b) In case a Cash Agent fails the preliminary screening, the Contracting Bank 
shall return the documents and notify the Cash Agent of the grounds for failure. The 
Cash Agent may re-submit the documentary requirements within thirty (30) days from 
denial;and
c) In case a Cash Agent passes the preliminary screening, the Contracting Bank 
shall forward the application to the BSP:
Provided, That, the Contracting Bank shall have an electronic banking solution 
to implement its cash agent operations and comply with the requirements of Part Seven


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of the Manual of Regulations for Banks (MORB), on the Guidelines on Electronic Banking 
Services and Operations. The bank shall deploy to its cash agents a device through 
which its customers can perform secure online, real-time deposit and withdrawal 
transactions on their own bank account, fund transfers, bills payment, and self-service 
transactions: Provided, further, That the Board of Directors of the Contracting Bank 
shall adopt clearly-defined written policies, procedures, and controls for its Cash Agent 
operations, including Cash Agent selection, exercise of due diligence, and customer 
care arrangements.
SEC. 6. Evaluation Process. - The BSP shall create an online evaluation process 
for a Cash Agent application while ensuring that:
a) Cash Agent demonstrates good reputation and credit history, has no previous 
civil and criminal record, and has a deposit account with the Contracting Bank against 
which all bank transactions will be conducted;
b) Theresult of the application shall be released within seven (7) working days 
upon the application by the Contracting Bank;
c) In case an application shall be rejected, the applicant shall be given a 
Registered, written notification that indicates and explains the ground/s for rejection;
d) In case an application shall be approved, BSP shall issue an Authority to Utilize 
As Cash Agent to Contracting Bank valid for two (2) years. The Authority to Utilize As 
Cash Agent shall be displayed conspicuously in the Cash Agent's retail outlet.
SEC. 7. Revocation of Authorization. - The BSP shall revoke the Authority Utilize 
as Cash Agent if a Cash Agent no longer meets the standards set to qualify for the 
requirements under this Act.
SEC. 8. BankTransactions and Services. - A duly-authorized Cash Agent may 
perform any or all of the following bank transactions/services:
a) Accept and disburse cash on the bank's behalf in connection with the following
self-service transactions of customers.
i. Deposit and withdrawal transactions performed by the customer on one's bank
account;
ii. Fund transfers performed by the customer;
iii. Bills payment; and


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iv. Payments due to government institutions, such as contributions to the Social 
Security System and premiums payable to the Philippine Health Insurance Corporation, 
PAG-IBIG and others;
b) 
Collect and forward applications for opening a savings account;
c) 
Forward loan application documents to Contracting Bank;
d) 
Perform Initial Customer Identity Verification:
i. 
Conduct customer due diligence (CDD) investigations in opening low 
transactional and low risk accounts or accounts subject to deposit and 
transactional limits;
ii. 
Prevent anti-money laundering and countering financing of terrorism 
activities;
cash;
banks;
e) Other transactions:
i. Payment (including loan repayments) using credit and debit cards, checks, and
ii. Transfers between bank accounts including those to be remitted to other
iii. Balance inquiries; and
iv. Check encashment.
SEC. 9. Investment Incentives. - A Cash Agent that establishes operations in a 
remote area shall be entitled to the following incentives:
a) Free training of Cash Agent personnel on various bank processes conducted 
by the BSP;
b) Expedited processing of permits and certificates that are requisites to 
business registration and operation; and
c) Expedited processing of local government permits and other related 
documents.
The Department of Trade and Industry (DTI) shall require the Securities and 
Exchange Commission (SEC) and the local government unit (LGU) involved to create 
mechanism for expedited processing from application to approval.


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SEC. 10. Role of LGUs. - The concerned LGU shall encourage and provide 
incentives to a Cash Agent in relation to the purpose of this Act pursuant to Republic 
Act No. 7160, otherwise known as the Local Government Code of 1991.
The concerned LGU shall conduct training programs in the barangay on financial 
literacy and capacity-building to increase understanding of different financial services 
and products.
SEC. 11. Subcontracting Agents. - A Cash Agent cannot subcontract its 
operations or business to third parties.
SEC. 12. Agent Exclusivity. - BSP may permit temporary agent exclusivity for a 
period not exceeding two (2) years. Otherwise, the Cash Agent shall enter into an 
agreement with another Contracting Bank.
SEC. 13. Fees. - A Cash Agent may set customer fees and charge customers 
directly: Provided, That the Contracting Bank and the BSP shall monitor such pricing 
for signs of exploitation or customer confusion.
SEC. 14. Principal Liability for Agents. - The Contracting Bank is liable for all 
actions and omissions of the Cash Agent, provided such act is within the bounds of the 
agency. The Contracting Bank shall exercise due diligence to ensure its Cash Agents 
comply with applicable rules, regulations, and policies on anti-money laundering, 
consumer protection, bank secrecy and customer data confidentiality.
SEC. 15. Prohibited Acts. - In addition to acts or omissions already penalized 
by existing laws, the following shall constitute as prohibited acts for any cash agent 
and are hereby declared to be unlawful:
(a) Make any false entry in any bank report or statement or participate in any 
fraudulent transaction, thereby affecting the financial interest of, or causing damage 
to, the bank or any person;
(b) Without order of a court of competent jurisdiction, disclose to any 
unauthorized person any information relative to the funds or properties in the custody 
of the bank belonging to private individuals, corporations, or any other entity:
Provided, That with respect to bank deposits, the provisions of existing laws shall 
prevail;


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(c) Accept gifts, fees or commissions or any other form of remuneration in 
connection with the approval of a loan or other credit accommodation from said bank;
(d) Conduct business in an unsafe or unsound manner, which resulted or may 
result in material loss or damage, or abnormal risk or danger to the safety, stability, 
liquidity or solvency of the institution.
SEC. 16. Penalty Clause. - Whenever a cash agent violates any of the provisions 
of this Act, the person or persons responsible for such violation shall be punished by a 
fine of not less than Fifty Thousand Pesos (PhP 50,000) nor more than Two Hundred 
Thousand Pesos (PhP 200,000) or by imprisonment of not less than two (2) years nor 
more than ten (10) years, or both, at the discretion of the court.
SEC. 17. Implementing Rules and Regulations. - Upon the effectivity of this 
Act, the implementing rules and regulations necessary shall be issued by the concerned 
departments and agencies within thirty (30) days upon the effectivity of this Act. 
Provided, That the failure of the concerned departments and agencies to promulgate 
the rules and regulations shall not prevent the implementation of this Act.
SEC. 18. Separability Clause. - If, for any reason or reasons, any part or 
provision of this Act shall be declared as unconstitutional or invalid, the other parts or 
provisions hereof which are not affected thereby shall continue to be in full force and 
effect.
SEC. 19. Repealing Clause. - All provisions of existing laws, orders, rules and 
regulations or parts thereof which are in conflict or inconsistent with the provisions of 
this Act are hereby repealed, amended or modified accordingly.
SEC. 20. Effectivity. - This Act shall take effect immediately upon its publication 
in the Official Gazette or in a newspaper of general circulation in the Philippines.
Approved,