BSP revokes license of another money changer

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has revoked the license of another money changer as it continues to ramp up its campaign against illegally operating money service businesses (MSBs).

The regulator said the Monetary Board has cancelled the certificate of registration of Nashima Money Changer as a foreign exchange dealer or money changer for serious violation of its deed of undertaking.

The company’s license was revoked for violating provisions of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI), as well as Republic Act 9160 or the Anti-Money Laundering Act (AMLA) of 2001.

This brought to five the number of MSBs whose licenses to operate were cancelled by the BSP since 2018. Last year it cancelled the certificate of registration of one MSB, while in 2018 it revoked the licenses of three MSBs.

Early this month, the BSP blacklisted four unregistered money changers, namely Adahn Money Changer, Mudzmar Money Changing Services and Zhenrihada Money Changing Services which are all operating in Barangay Plainview in Mandaluyong, as well as LM’s Money Changer in Laoag City in Ilocos Norte.

According to the central bank, the MSBs were found operating without BSP registration in violation of rules and regulations governing operations and reporting obligations of non-bank entities engaged in remittance and money changing and/or foreign exchange dealing.

As of end 2020, there were 7,214 registered MSBs operating nationwide serving as major financial service access points for individuals, small businesses and social amelioration beneficiaries during the COVID-19 pandemic, especially in areas where banks’ presence is lacking.

MSB entities include remittance agent and sub-agent, remittance platform provider, electronic or e-money issuer, as well as money changer or foreign exchange dealer.

Majority or 47.8 percent of the MSB is engaged exclusively in remittance transfer business, while 38.7 percent offer remittance, money changing, and foreign exchange dealings.

MSBs are mostly large-scale remittance head offices and branches that also offer money changing and foreign exchange business with average monthly network volume of transactions of at least P75 million.

These entities are required to maintain capital of at least P50 million.

Just like pawnshops, the BSP said MSBs have become critical and relevant financial service access points to reach the financially unserved and underserved areas of the country, thus helping in achieving the financial inclusion objectives of the BSP, especially during the peak of the COVID-19 pandemic.

The BSP also makes sure that MSBs are not used as a venue for money laundering and terrorism financing activities.