The rules and regulations of the BSP that govern the credit card operations of the banks and subsidiary credit card companies are not enough to screen out delinquent borrowers. As a prudential measure to protect banks and subsidiary credit card companies, the BSP requires these institutions to set up an appropriate system for managing their risk exposures to credit card operations and to document these exposures in a complete and concise manner. Before issuing credit cards, banks and their subsidiary credit card companies must exercise due diligence by ascertaining that applicants have a good credit standing and are financially capable.
