BSP says tighter due diligence for large withdrawals only needed once per client

THE BANGKO SENTRAL ng Pilipinas (BSP) said banks only need to conduct enhanced due diligence (EDD) once per customer for cash withdrawals over P500,000 and not per transaction to prevent delays.

In a circular dated Feb. 6, the central bank clarified that clients only need to submit supporting documents once to verify the legitimacy of their covered transactions.

“In implementing the enhanced due diligence requirements under BSP Circular No. 1218, BSFIs (BSP-supervised financial institutions) shall conduct EDD for cash withdrawals exceeding P500,000 on a per customer basis, instead of per transaction basis,” the BSP said. “This shall cover the customer’s usual business transactions.”

“BSFIs must ensure that EDD procedures do not unduly delay legitimate transactions by streamlining processes and providing branch personnel with targeted training to promote consistent, efficient, and effective implementation.”

The BSP said banks may also employ a due diligence process tailored to a customer’s risk profile, nature of business, and transaction patterns. This can be applied to their other transactions like inter-branch or interbank cash requirements, or loan disbursements.

“Meanwhile, more rigorous EDD shall be applied when transactions deviate from a customer’s expected behavior or present heightened risks,” it said.

In September last year, the BSP issued a circular imposing a P500,000 ceiling on cash withdrawals due to emerging anti-money laundering risks from the flood control corruption scandal.

It allows clients to withdraw a maximum of P500,000 or its equivalent in foreign currency at once or via multiple transactions within one banking day. However, withdrawals above the threshold may still be allowed if customers show a legitimate business purpose.

BSFIs must review these transactions by performing EDD based on the documents provided by a client. — Katherine K. Chan