The new move is a part of a liberalized scheme better known as cross-selling framework, Bangko Sentral ng Pilipinas said in a statement.
"Cross-selling is a market practice where bank premises serve as a distribution channel for financial products that are not those of the bank," according to a statement by the country’s central bank.
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As per the new rule, the banks can cross-sell traditional protection-type insurance products such as life policies, even if the insurance product is from an entity that is not within same banking group or financial conglomerate as the bank.
Moreover, the lenders are allowed to use their premises as a market place for collective investment schemes or products, which includes mutual funds, unit investment trust funds and variable unit-linked life insurance policies.
However, the liberal policy comes with stringent disclosure requirements, with an aim to protect consumer and is meant to make potential investors aware of the investment risks.
The latest rule has been approved by the monetary board, the policy-setting body of Bangko Sentral.
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