THE central bank has rolled out the guidelines for the grant and implementation of aid for rural banks as they migrate to a modern banking system.
According to the Bangko Sentral ng Pilipinas (BSP) Memorandum M-2026-042, one of the key components under the ‘Rural Bank Strengthening Program’ (RBSP) technical assistance is to support rural lenders in the migration from ‘legacy information technology systems to cloud-based or software-as-a-service (SaaS) core banking systems (CBS).’
According to the central bank, a SaaS CBS is a ‘cloud-hosted core banking system operated by an external provider and accessed by the bank over secure electronic channels on a subscription or usage basis and is treated as outsourcing of IT systems under BSP regulations.’
The BSP said the technical assistance (TA) shall include helping rural banks acquire and subscribe to a SaaS CBS for a limited period to enable enhancements in their operational efficiency, operational resilience, business continuity, cybersecurity, and regulatory compliance capabilities.
In the long run, the TA, likewise, aims to support the ‘viability and competitiveness’ of rural banks amid the increasing digitalization in the financial system, the central bank explained further.
As such, the BSP released the guidelines, qualification requirements, documentary requirements, procedures and other governing rules for the grant and implementation of the TA.
‘The TA shall provide qualified banks with support for the implementation and multi-year subscription to a Saas CBS, subject to the BSP’s evaluation and approval in accordance with these guidelines,’ The central bank said in the memorandum.
The BSP explained that the support shall include the services necessary to implement and operationalize the CBS. The latter includes system configuration, data migration, system integration, testing, user training, commissioning, cloud infrastructure, technical support, system updates, and maintenance services.
The implementation period of the assistance shall be six months maximum, reckoned from the date of issuance by the BSP to the Service Provider of the deployment notice covering the Recipient rural bank.
The implementation period shall cover the deployment of the CBS up to successful full system ‘go-live.’
Meanwhile, the BSP said the TA shall cover the fixed subscription period of 36 months from the end of the implementation period.
‘The subscription period shall cover the continued access to and operation of the CBS and related support services upon successful system Go-Live,’ the central bank said.
A recipient rural bank refers to a rural bank whose application for the RBSP digitalization TA has been approved by the BSP and has ‘duly executed’ a related agreement with the central bank.
Rural banks shall submit documentary requirements for their application for the TA. Those seeking to receive TA shall also submit a certification from the president of the bank that the lender has no existing subscription to a SaaS CBS platform at the time of the application for the aid. Rural banks should also submit accomplished self-assessment checklist signed by the president and accomplished IT outsourcing questionnaire.