BSP to grant incentive to early adopters of new small business loan form

The Bangko Sentral ng Pilipinas (BSP) will grant a regulatory incentive for banks and financial institutions that are already using the standard business loan application form (SBLAF) ahead of the mandatory adoption in April. 

The central bank, in a memo signed by BSP Deputy Governor Chuchi G. Fonacier on Jan. 10, said the Monetary Board has approved the grant of an incentive for the early adoption of the SBLAF templates as provided in Circular No. 1156 dated Sept. 30, 2022. 

“The regulatory incentive for early adoption by covered entities under Circular No. 1156 shall be in the form of a reduction in the annual supervisory fee (ASF) for each of the years 2024 and 2025. The reduction shall be equivalent to twenty percent (20%) of the assessed ASF or PHP 2 million, whichever is lower,” it said. 

Banks, BSP-supervised non-bank government financial institutions, and leasing companies with quasi-banking licenses that are not subsidiaries of banks are considered as covered entities, the BSP said.

These entities must also fully implement the SBLAF templates six months before the start of the mandatory adoption on April 28. 

The templates must be used for all covered loan applications, the BSP said. It should also be accessible through all applicable channels such as in bank branches, offices, agents, online portals, or apps where borrowers may submit their loan applications. 

“The submission of SBLAF reporting requirements as stipulated in Circular No. 1156 is not a condition for the early adoption, thus, the said report will be submitted in the same manner and submission deadline for those covered entities that have not early adopted,” the BSP said. 

In October 2022, the BSP started requiring financial institutions to use the SBLAF to make credit more accessible for small businesses. 

The SBLAF is expected to help borrowers better familiarize themselves with the loan process and find loan applications less intimidating. 

To be eligible for the regulatory incentive, the president or an officer of the bank should issue a certification and a sworn statement attesting to their full implementation of the SBLAF templates.

An electronic copy of the signed certification and certified true copy of the resolutions should be submitted within 15 banking days to the BSP. 

“Post-verification of the covered entity’s eligibility for the early adoption incentive may be conducted, as deemed necessary,” the BSP said.

Any misrepresentation will require an institution to return the incentive, the central bank said. The financial institution will also be subjected to applicable enforcement actions. — Keisha B. Ta-asan