are applicable to the banks. in particular, as the functionalities of ppis form an ongoing relationship, comparable aml / cft obligations will have to apply. that is the reason we have been following a risk based approach within the extant aml framework for ppis. we will continue to evolve our guidelines balancing the demand of the ppi industry and extant aml framework. while doing so there are a few aspects to remember. it must be remembered that the schemes cited in other countries cannot be replicated in india in toto. the risk perception while issuing ppis up to usd1000 without kyc in usa may not be same as the risk perception associated with ppis up to rs. 50, 000 / – in india. the permissible limits, top ups and reloadability will depend not only on the purchasing power but also on systems in place to address the risk in terms of strong enforcement and compliance framework. one of the reasons cited for replacing cash with ppis is the trails that ppis will provide. however, it is essential that ppi issuers are in a position to deliver the requisite trails. in some of the cases we have observed there is no proper system to track the card issuance let alone system for tracing the transaction trails. to put it more directly, in a mobile based prepaid system, this auditability is more straight forward if there has been proper adherence to rules while issuing sim cards since minimum kyc standards are prescribed now. the national identity scheme needs to be vigorously integrated with the payment systems to create the necessary synergies. the industry may need to examine how quickly the aadhaar scheme could be used to address the identification and authentication requirements. while this process is ongoing, caution has to be the better part of valour. so, while the demand for relaxation of kyc is well taken, the industry should work on improving the system for providing the necessary trace and transaction trails. there have been demands for increasing the transaction limits. increasing transaction limits by compromising on the kyc would be a risky proposition given its susceptibility to money laundering. as you will be aware increase in transaction limits will need proportionate increase in safety and security of transactions as applicable to other card schemes in the form of an additional factor of authentication. the industry needs to deliberate more actively on this issue and we as a regulator would be willing to act as a catalyst in the process. creating awareness – is the industry doing enough to increase the

nestor a espenilla, jr : revisiting the role of rural banks in countryside development and financial inclusion speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 65th annual convention and general membership meeting of the rural bankers association of the philippines ( rbap ), davao city, 21 may 2018. * * * davao city mayor sara “ inday ” z. duterte, secretary of finance carlos g. dominguez, pdic president roberto b. tan, land bank president alex buenaventura, rbap president giovanni d. gabriento, rbap members, colleagues from the bangko sentral, fellow workers in government, esteemed guests, ladies and gentlemen, a pleasant good morning to everyone! i am honored to visit davao again, for rbap ’ s 65th annual convention and general membership meeting. it is always a pleasure to see and appreciate the city ’ s beauty. i also look forward to sampling some durian. and as mayor sara said, let us support davao ’ s buy buy buy to support the local economy. i commend the outgoing set of rbap officers and directors for their commitment and exemplary performance to promote a sound rural banking industry. rbap ’ s milestones under your leadership are vital to promoting broader countryside development through financial inclusion. your consistent service to our farmers, fishermen, and msmes has become rbap ’ s trademark of service excellence. i remember during last year ’ s charter anniversary symposium in october, we talked about how rural banks have become customers ’ best financial friend or bff 1. now, we celebrate how rural banks are # lodis in bringing necessary financial services to the underserved, unserved, and unbanked filipinos. this term “ lodi ” is filipino millennial speak for “ idol ” and takes off from your theme, “ leading onwards to development and inclusion # lodi. ” to me, this theme indicates the industry ’ s willingness to reposition itself to the growing needs of a new breed of financial customers and to leverage on digital financial technology to advance economic development and financial inclusion objectives. that you have one of the youngest rbap presidents to steer the rural banking industry into this direction is very promising. rural banks as # lodis for financial inclusion rural banks have proven themselves to be lodis in their own right — exemplary