BSP Circular No. 176 (1998)

(NAR) VOL. 9 NO. 4 / OCTOBER - DECEMBER 1998

[ BSP CIRCULAR NO. 176, September 07, 1998 ]

SANCTIONS FOR NON-COMPLIANCE WITH MINIMUM CAPITAL REQUIREMENTS

Pursuant to Monetary Board Resolution No. 1266 dated September 2, 1998, the following sanctions for non-compliance with minimum capital requirements are hereby prescribed: Monetary Penalty: For delayed or non-submission of the capital build-up program reckoned from the time the bank was notified in writing up to the time program has been submitted per banking day of delay, a monetary penalty of: Type of Bank Amount of Penalty Expanded & Non-Expanded Commercial P 10,000.00 Banks Thrift Banks P 5,000.00 Rural Banks P 1,000.00 Non-Monetary Penalty: Non-monetary penalties shall depend on the degree of capital deficiency incurred by the bank, as follows: For COMMERCIAL BANKS: % of Capital Deficiency Penalty - Suspension of authority to invest in non-allied Up to 20% undertakings (for EKBs only) - Suspension of authority to invest in allied undertakings - Suspension of securities and dealership functions (for EKBs only) - Suspension of branching privileges - Suspension of declaration of cash dividends - Suspension of authority to invest in non-allied Up to 40% undertakings (for EKBs only) - Suspension of authority to invest in allied undertakings - Suspension of securities and dealership functions (for EKBs only) - Suspension of branching privileges - Suspension of declaration of cash dividends- Restrictions on overall loan growth/investments (new loans to the extent of collections only) - Restrictions on lending affiliates - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or handle government deposits - Suspension of authority to invest in non-allied Up to 60% undertakings (for EKBs only) - Suspension of authority to invest in allied undertakings - Suspension of securities and dealership functions (for EKBs only) - Suspension of branching privileges - Suspension of declaration of cash dividends - Restrictions on overall loan growth/investments (new loans to the extent of collections only) - Restrictions on lending affiliates - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or handle government deposits - Suspension of authority to engage in quasi-banking activities - Suspension of authority to engage in derivative activities - Suspension of FCDU/EFCDU activities - Suspension of trust operations - Suspension of authority to invest in non-allied Up to 80% undertakings (for EKBs only) - Suspension of authority to invest in allied undertakings - Suspension of securities and dealership functions (for EKBs only) - Suspension of branching privileges - Suspension of declaration of cash dividends - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or handle government deposits - Suspension of authority to engage in quasi-banking activities - Suspension of authority to engage in derivative activities - Suspension of FCDU/EFCDU activities - Suspension of trust operations - Suspension of international banking activities - Suspension of lending activities More than 80% - Suspension of clearing privileges - Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws - Cease and desistFor THRIFT BANKS % of Capital Deficiency Penalty Up to 20% - Suspension of branching privileges - Suspension of declaration of cash dividends Up to 40% - Suspension of branching privileges - Suspension of declaration of cash dividends - Restrictions on overall loan growth/investments (new loans to the extent of collections only) - Restrictions on lending to affiliates - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or create demand deposits or operate NOW accounts - Suspension of authority to accept government deposits Up to 60% - Suspension of branching privileges - Suspension of declaration of cash dividends - Restrictions on overall loan growth/investments (new loans to the extent of collections only) - Restrictions on lending to affiliates - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or create demand deposits or operate NOW accounts - Suspension of authority to accept government deposits - Suspension of authority to engage in quasi-banking activities - Suspension of FCDU activities - Suspension of authority to invest in allied undertakings - Suspension of trust operations Up to 80% - Suspension of branching privileges - Suspension of declaration of cash dividends - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or create demand deposits or operate NOW accounts - Suspension of authority to accept government deposits - Suspension of authority to engage in quasi-banking activities - Suspension of FCDU activities - Suspension of authority to invest in allied undertakings - Suspension of trust operations - Suspension of lending activities - Suspension of issuance of domestic LCs More than 80% - Suspension of clearing privileges - Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws- Cease and desist For RURAL BANKS Up to 20 % - Suspension of branching privileges - Suspension of declaration of cash dividends Up to 40% - Suspension of branching privileges - Suspension of declaration of cash dividends - Restrictions on overall loan growth/investments (new loans to the extent of collections only) - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or create demand deposits or operate NOW accounts - Suspension of authority to accept government deposits Up to 60% - Suspension of branching privileges - Suspension of declaration of cash dividends - Restrictions on overall loan growth/investments (new loans to the extent of collections only) - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or create demand deposits or operate NOW accounts - Suspension of authority to accept government deposits - Suspension of authority to invest in allied undertakings Up to 80% - Suspension of branching privileges - Suspension of declaration of cash dividends - Denial of access to BSP rediscounting facilities - Suspension of authority to accept or create demand deposits or operate NOW accounts - Suspension of authority to accept government deposits - Suspension of authority to invest in allied undertakings - Suspension of lending/investment activities More than 80% - Suspension of clearing privileges - Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws - Cease and desist This Circular shall take effect immediately. Adopted: 7 Sept. 1998

(SGD.) GABRIEL C. SINGSON GovernorSource: Supreme Court E-Library