Resolution JPRF-F-2023-089: Reforming the Regulation on Checking Deposits via Basic Accounts to Strengthen Financial Inclusion

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th floor | Postal Code: 170507 | Quito - Ecuador | THE FINANCIAL POLICY AND REGULATION BOARD CONSIDERING:
That, Article 3, number 1, of the Constitution of the Republic of Ecuador, establishes as primary duties of the State to guarantee without any discrimination the effective enjoyment of the rights established in the Constitution and in international instruments, particularly education, health, food, social security, and water for its inhabitants; That, Article 9 of the Supreme Norm guarantees that foreign persons who are in Ecuadorian territory will have the same rights and duties as Ecuadorians, in accordance with the Constitution; That, Article 11, number 2, of the Fundamental Charter, determines that the exercise of rights shall be governed by the principle that all persons are equal and will enjoy the same rights, duties, and opportunities, and that no one may be discriminated against; That, Article 66, number 28, of the Fundamental Norm, recognizes and guarantees to persons the right to personal and collective identity, which includes having a name and surname, duly registered and freely chosen; That, Article 308 of the Magna Carta, determines that financial activities are a public order service, and may be exercised, with prior authorization of the State, in accordance with the law; they will have the fundamental purpose of preserving deposits and meeting financing requirements for the achievement of the country's development objectives; and, that the State will promote access to financial services and the democratization of credit; That, Article 309 ibidem precepts that the national financial system is composed of the public, private, and popular and solidary sectors, which intermediates public resources. Each of these sectors will have specific and differentiated control norms and entities, which will be responsible for preserving their security, stability, transparency, and solidity; That, Article 392 of the Constitution of the Republic, recognizes that the State will watch over the rights of persons in human mobility and will exercise the direction of migratory policy through the competent organ in coordination with the different levels of government; That, Article 4, numbers 4 and 6 of the Organic Code of Money and Finance, Book I, consecrates as principles that inspire the provisions of said Code, the principle of inclusion and equity; and, the protection of citizens' rights; That, Article 13 of the aforementioned Organic Code, Book I, creates the Financial Policy and Regulation Board as part of the Executive Function, responsible for the formulation of credit, financial, securities, insurance, and prepaid comprehensive health care service policy and regulation; That, Article 14.1, numbers 10 and 15 letters c. and d., of the aforementioned Code, consecrates the functions of the Financial Policy and Regulation Board, among which are those of promoting financial inclusion processes and the full exercise of the rights of financial users, and also establishing, within the framework of its competencies, any measure that contributes to the
creation of products oriented to promote and facilitate the financial inclusion of priority attention groups and foster financial inclusion, promoting the participation of financial entities, securities, insurance, and prepaid comprehensive health care services;

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th floor | Postal Code: 170507 | Quito - Ecuador | That, Article 150 of the cited Code above, provides that entities of the national financial system will be subject to the regulation issued by the Financial Policy and Regulation Board; That, Article 151 of the aforementioned Organic Code states that the regulation must recognize the nature and particular characteristics of each of the sectors of the national financial system and that the regulation may be differentiated by sector, by segment, by activity, among others; That, Article 369 of the aforementioned Organic Code, determines that the purpose and objectives of public financial entities will exercise financial activities in a sustainable, efficient, and equitable manner, stating that the financing they grant will seek economic inclusion, among others, of persons in human mobility; That, Article 1 of the Organic Law of Human Mobility, establishes as its object the regulation of the exercise of rights, obligations, and mechanisms linked to persons in human mobility, which comprises emigrants, immigrants, persons in transit, returned Ecuadorians, those requiring international protection; and, their families; That, with Resolutions No. 503-2019-F of March 01, 2019 and No. 612-2020-F of November 26, 2020, issued by the Monetary and Financial Policy and Regulation Board, Chapter XV "Norm that regulates checking deposits via basic accounts in financial entities under the control of the Banking Superintendence", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, was substituted and reformed, in order; That, the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2023-0098-M of November 14, 2023, submits to the President of the Board the following reports:
i) Legal Report No. JPRF-CJF-2023-058 dated November 10, 2023, which concludes: a) The Financial Policy and Regulation Board, as responsible for the formulation of policy and regulation of the financial system, has legal competence to regulate the contracting and opening of Basic Accounts; and, apply the provisions of the Organic Code of Money and Finance, Book I, in accordance with what is established in its article 14.1 number 1; b) The Reform Proposal contained in Technical Report No. JPRF-CTIFSP-2023-0013 of November 10, 2023, issued by the Technical Coordination of Financial Inclusion and Prepaid Health Policy, is framed within the current legal framework, so its issuance is legally viable within the framework of the competencies and powers attributed to the Financial Policy and Regulation Board. ii) Technical Report No. JPRF-CTIFSP-2023-0013 dated November 10, 2023, which concludes that, the normative reform proposal aims to strengthen the financial inclusion of natural persons, with a particular focus on priority attention groups, such as recipients of monetary transfers by the Ecuadorian Government and migrants settled in national territory. To this end, the advantages offered by basic accounts have been improved through several measures: the elimination of the limit on permitted accounts, the increase in the number of permitted transactions, an increase in deposit, withdrawal, and balance limits to encourage their use, improvements in service channels to reduce the risk of fraud and other vulnerabilities associated with debit cards, greater flexibility in identity documents to facilitate the opening of these accounts for migrant persons, the implementation of a simplified anti-money laundering regime considering the net risk of the client, and continuous communication by financial entities to the final beneficiary to promote access and use of this type of account.

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th floor | Postal Code: 170507 | Quito - Ecuador | That, the Financial Policy and Regulation Board, in ordinary session held by technological means, convened on November 27, 2023 and carried out through video conference on November 29, 2023, learned of Memorandum No. JPRF-ST-2023-0098-M of November 14, 2023, issued by the Technical Secretary of the Board; as well as the aforementioned reports from the Technical Coordination of Financial Inclusion and Prepaid Health Policy and Regulation and from the Legal Coordination of Financial Policy and Norms, in addition to the corresponding resolution project; That, the Financial Policy and Regulation Board, in ordinary session held by technological means, convened on November 27, 2023 and carried out through video conference on November 29, 2023, learned of and approved the following Resolution; and, In exercise of its functions, RESOLVES:
ARTICLE FIRST.– Substitute the text of article 2 of Section I "DEFINITION AND CHARACTERISTICS OF THE BASIC ACCOUNT", Chapter XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, with the following:
"Art 2.- Transactions.- The basic account allows a natural person to access at least the following transactions:

1. Deposits, withdrawals, and inquiries;
2. Payment of public and private services;
3. Payment and/or collection of remuneration or salaries;
4. Payments to the financial entity and to third parties;
5. Purchases or consumption in affiliated establishments through the debit card or other electronic payment means;
6. Sending and receiving national transfers and remittances from abroad; and,
7. Crediting in general up to the limits established in article 4."
   ARTICLE SECOND.– Substitute the text of article 4 of Section I "DEFINITION AND CHARACTERISTICS OF THE BASIC ACCOUNT", Chapter XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, with the following:
   "Art. 4.- Limit.- Entities must control regarding the same holder of the basic account that:
8. The balance does not exceed the value of four unified basic salaries; and,

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th floor | Postal Code: 170507 | Quito - Ecuador |
2. The accumulated monthly deposits and withdrawals do not exceed six unified basic salaries.
The financial entity may set amounts lower than those indicated, based on its risk analysis."
ARTICLE THIRD.– Substitute the text of article 8 of Section I "DEFINITION AND CHARACTERISTICS OF THE BASIC ACCOUNT", Chapter XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, with the following:
"Art. 8.- Service Channels.- Transactions and other services associated with basic accounts may be provided in physical or electronic channels, own or third-party, enabled by financial entities.
For their execution, holders may use the payment means permitted by current regulations and that financial entities have available.
For the use of the cell phone as a payment means, basic account holders must register their cell phone number with the financial entity following the procedure established in the basic account contract, being their exclusive responsibility the update or modification of the registered number.
The financial entity may issue, at the holder's cost, at least one chip debit card."
ARTICLE FOURTH.– Substitute the text of article 9 of Section II "OF THE BASIC ACCOUNT CONTRACT", Chapter XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, with the following:
"Art. 9.- Contracting and Opening.- The opening of the basic account will be done without the need for an initial deposit.
The contracting of a basic account may be carried out through physical or virtual channels, enabled for such purposes by financial entities, including non-bank correspondents or equivalents, under any of the following modalities:

1. In-person mode.- The opening of the "Basic Account" may occur at the financial entity, or through the network of non-bank correspondents or equivalents.
   In the first case, the financial entity will verify the identity of the applicant through the corresponding document, provided for in the current legal framework; and, if it authorizes the creation of the "Basic Account", it will deliver to the client the respective contracts and the electronic devices provided for their management. In the event that the creation of the "Basic Account" is carried out through the network of non-bank correspondents or equivalents, these must be previously authorized to collect and deliver, on behalf of the financial entities, the information and documentation related to this type of product. For this effect, non-bank correspondents or equivalents will request identification documents from interested parties and, if the financial entity authorizes the creation of the "Basic Account", it will deliver to the client the respective contracts and the electronic devices provided for their management.

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th floor | Postal Code: 170507 | Quito - Ecuador | In the case of persons in a situation of human mobility, the presentation of any of the documents indicated below will be considered the sole requirement for the opening of a basic account:

1. Valid identity document or ID card in accordance with the Organic Law on the Management of Identity and Civil Data;
2. Valid passport issued by the country of origin in accordance with the Organic Law on the Management of Identity and Civil Data;
3. Any type of visa granted by the Ecuadorian State, as stated in the Law on Human Mobility; or,
4. In applicable cases, what is established in Executive Decree No. 436 of June 01, 2022, must be taken into account.
5. Non-presence mode by electronic means.- The contracting of the basic account may also be carried out through non-presence virtual channels, enabled by financial entities, among which may be included cell phones that have messaging with USSD protocol or APP or WEB type applications that have been enabled for such purpose by the financial entity.
   In this case, the contracting and opening process of the account will be governed by what is stipulated in the contract and in the same channel, without the need for the applicant to deliver physical documentation, being valid the acceptance of contractual conditions by electronic means. Those persons who are obliged to present some document to open these accounts must do so necessarily in in-person mode. The financial entity will ensure that the instrumentation of contracts by electronic means is carried out under the protection of what is established in the Law on Electronic Commerce, Electronic Signatures and Data Messages, and other current regulations."
   ARTICLE FIFTH.– Repeal articles 11 "Permitted Accounts" and 12 "Obligation of Financial Entities" of Section II "OF THE BASIC ACCOUNT CONTRACT", Chapter XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions.
   ARTICLE SIXTH.– Substitute the text of article 17 of Section II "OF THE BASIC ACCOUNT CONTRACT", Chapter XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, with the following:
   "Art. 17.- Charges and Costs for Services.- The charges and costs related to the basic account are established in Chapter XXV "Financial Services Public and Private Financial Sector", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities and Insurance Resolutions."

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th floor | Postal Code: 170507 | Quito - Ecuador |
ARTICLE SEVENTH.– Substitute the text of General Provision First of Section II "OF THE BASIC ACCOUNT CONTRACT", Chapter XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, with the following:
"FIRST.- All operations carried out through basic accounts will have a lawful origin and destination, and holders must comply at all times with the Organic Law on Prevention, Detection and Eradication of the Crime of Money Laundering and Financing of Crimes and other applicable regulations.
Financial entities, in compliance with their obligations provided for in the current legal framework, will implement and apply simplified anti-money laundering and financing of terrorism prevention controls, according to their policies based on the net risk assigned to the client, which will be subject at all times to the provisions issued by the Banking Superintendence and other authorities within their competencies. Financial entities may require holders, and they will have the obligation to deliver, all the information and documentation necessary to explain and justify the operations carried out through basic accounts. In the event of non-compliance with this obligation by the holders, financial entities may proceed to cancel the basic accounts and prohibit their use, without prejudice to the other legal effects provided for in these cases."
ARTICLE EIGHTH.– Incorporate after General Provision Fifth of Section II "OF THE BASIC ACCOUNT CONTRACT", Chapter XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, the following General Provisions:
"SIXTH.- The Banking Superintendence will incorporate in its statistical portal monthly information regarding basic accounts.
SEVENTH.- The Banking Superintendence will order controlled entities to carry out training processes so that respective personnel know about basic accounts and dissemination through communication campaigns.
EIGHTH.- The Banking Superintendence will notify this Resolution to controlled financial entities for its application."
ARTICLE NINTH.- Add in Section II "OF THE BASIC ACCOUNT CONTRACT", CHAPTER XV "NORM THAT REGULATES CHECKING DEPOSITS VIA BASIC ACCOUNTS IN FINANCIAL ENTITIES UNDER THE CONTROL OF THE BANKING SUPERINTENDENCE", Title II "NATIONAL FINANCIAL SYSTEM", Book I "MONETARY AND FINANCIAL SYSTEM" of the Codification of Monetary, Financial, Securities and Insurance Resolutions, the following Transitional Provisions:
"FIRST: Within sixty (60) days counted from the date of issuance of this Resolution, the Banking Superintendence will issue control norms for its application.

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Governmental Financial Management Platform. Yellow Block, 5th floor | Postal Code: 170507 | Quito - Ecuador | SECOND: The Banking Superintendence in coordination with the Superintendence of Popular and Solidarity Economy will define the information structure regarding basic accounts, within sixty (60) days counted from the issuance of this Resolution." FINAL PROVISION.- This Resolution will enter into force from its publication in the Official Register. Publish this Resolution on the website of the Financial Policy and Regulation Board within a maximum term of two (2) days from its issuance. COMMUNICATE.- Given in the Metropolitan District of Quito, on November 29, 2023. THE PRESIDENT, Mgs. María Paulina Vela Zambrano The resolution above was processed and signed by Master María Paulina Vela Zambrano, President of the Financial Policy and Regulation Board, in the Metropolitan District of Quito, on November 29, 2023.- I CERTIFY. TECHNICAL SECRETARY Mgs. Nelly Arias Zavala