BSP approves changes to phase 2 of the foreign currency deposit system

MANILA – The Bangko Sentral ng Pilipinas said on Thursday that the Monetary Council approved the second phase of amendments to the currency deposit system.

As part of the second phase amendments, banks will only need to notify the BSP of their intention to engage in expanded foreign currency deposit unit (FCDU) operations, the BSP said in a statement. ,

Previously, banks had to seek prior approval from the central bank, he added.

“The second phase of the reforms will provide banks with the possibility of carrying out efficient and flexible liquidity management of funds denominated in foreign currencies (FX) by relaxing the strict conditions for loans to the Ordinary Banking Unit (RBU) by the E / FCDU.

“In view of the liberalization of the foreign exchange regulatory environment, banks are expected to put in place an appropriate risk management system and integrate it into the overall risk management process to ensure that material risks arising from transactions denominated foreign exchange are properly identified, measured, monitored, and controlled, ”he added.

The coverage of the rules has also been extended to include Islamic banks and digital banks in the list of entities authorized to conduct foreign exchange transactions.

The amendment also streamlines licensing requirements for banks seeking authority from the FCDU, the BSP said.

PASB said the first phase of the reform was implemented in May 2020.

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