MANUAL OF REGULATIONS - Bangko Sentral Ng …

1 MANUAL OF REGULATIONSFFFFFOR OR OR OR OR BBBBBANKANKANKANKANKSSSSSFOREWORDThe 2008 MANUAL of REGULATIONS for Banks (MORB) is an updated compilationof banking REGULATIONS and policy issuances of the Bangko Sentral ng pilipinas (BSP).Available in hard and soft copies, it is a convenient reference and guide for banks inthe conduct of their updated MORB incorporates regulatory policies issued to align bankingpractices on risk management, good corporate governance, and capital adequacy,accounting and reporting with international standards. It also includes rulesimplementing legislative reform measures, the more significant of which are theGeneral Banking Law of 2000, the Anti-Money Laundering Act of 2001 and the SpecialPurpose Vehicle Act of providing banks and the banking public easy access to this information, theupdated MORB seeks to facilitate compliance with the BSP s supervisory and regulatoryrequirements that will contribute to the enhancement of the partnership between BSPand the banking sector, and ultimately to the strengthening of the Philippine BankingSystem and the M.

2 TETANGCO, JR. GovernorFOREWORDSoon after the establishment of the new Bangko Sentral ng pilipinas (BSP), theMonetary Board recognized the need not only to update but also to improve the presentationof the MANUAL of REGULATIONS for Banks to make it a more useful and accessible informationresource for the banking industry and the interested public. A special committee wastherefore created to revise the old MANUAL revised format MANUAL is the outcome of that effort. It benefits from the inputsof many concerned departments of the BSP as well as the various banking industryassociations. By combining the multi-dimensional perspective, we are hopeful that thisnew MANUAL and its subsequent updates will be able to more effectively disseminate theregulatory issuances of the BSP on a timely basis and provide appropriate guidance to thebanking also believe that it will be a especially useful tool at this time when the BSPhas come up with many new banking REGULATIONS and issuances in response to theunprecedented challenges posed by the Asian , we recognize that there will always be room for improvement.

3 Ourtask is therefore a continuing one of constant search for a better product to provide betterservices to the C. SINGSON GovernorvPREFACE(2008 Revised Edition)The 2008 MANUAL of REGULATIONS for Banks (MORB) is the latest updated edition fromthe initial issuance in 1996 . The updates consist of the significant policy developments andchanges in statutory laws. It shall serve as the principal source of banking REGULATIONS issuedby the Monetary Board and the Governor of the BSP and shall be cited as the authority forenjoining compliance with the rules and REGULATIONS embodied accomplish the work of proposing revision to the Old MANUAL , the Monetary Boardof the BSP, in its Resolution No. 1203 dated December 7, 1994, directed the creation of amulti-departmental Ad Hoc Review Committee.

4 The Committee was officially constitutedunder Office Order No. 2 Series of 1995 and was reconstituted several times the aforesaid office order, the Committee is tasked to update the Manuals on acontinuing basis (i) to incorporate relevant issuances (ii) propose revision/deletion of provisionswhich have become obsolete, redundant, irrelevant or inconsistent with laws/ REGULATIONS (iii) reformulate provisions as the need arises and (iv) oversee printing of the Manuals/Updates in coordination with the Corporate Affairs present Committee, as reconstituted under Office Order No. 430, Seriesof 2007 dated 08 June 2007, is composed of: Mr. Alberto A. Reyes, Director, CentralPoint of Contact Department (CPCD] II, Chairman; Atty. Magdalena D. Imperio, DeputyDirector, Office of the General Counsel and Legal Services (OGCLS), Vice Chairman;Ms.)

5 Ma. Corazon T. Alva, Acting Deputy Director, Examination Department (ED) I;Ms. Ma. Belinda G. Caraan, Acting Deputy Director/Head, Financial Consumer AffairsGroup (FCAG); Atty. Lord Eileen S. Tagle, Legal Officer III, OGCLS; Ms. Maria CynthiaM. Sison, Bank Officer IV, Office of the Supervisory Policy Development (OSPD);Ms. Concepcion A. Garcia, Bank Officer IV, OSPD; Atty. Florabelle S. Madrid, Manager,CPCD I, members; and Mr. Nestor A. Espenilla, Jr., Deputy Governor, Supervisionand Examination Sector, Committee Secretariat is composed of Ms. Celedina P. Garbosa, Acting. Manager,CPCD II, Head; Ms. Ma. Corazon B. Bilgera, Bank Officer II, OSPD; Ms. Ma. Cecilia U. Contreras,Supervision and Examination Specialist I, CPCD II, Bangko Sentral ng PilipinasPREFACE(2005 Edition)The 2005 MANUAL of REGULATIONS for Banks (MORB) is an updated edition of the1996 MORB.

6 The updates consist of the significant policy developments and changesin statutory laws. It shall serve as the principal source of banking REGULATIONS issued bythe Monetary Board and the Governor of the BSP and shall be cited as the authority forenjoining compliance with the rules and REGULATIONS embodied multi-departmental Committee on the Updating of the MANUAL of Regulationsfor Banks and Non-Banks Financial Institutions was created under Office Order , Series of 2007 dated 08 June 2007. Under the aforesaid office order, theCommittee is tasked to update the Manuals on a continuing basis (i) to incorporaterelevant issuances (ii) propose revision/deletion of provisions which have becomeobsolete, redundant, irrelevant or inconsistent with laws/ REGULATIONS (iii) reformulateprovisions as the need arises and (iv) oversee printing of the Manuals/Updates incoordination with the Corporate Affairs Committee is composed of Deputy Director Alberto A.

7 Reyes (CentralPoint of Contact [CPC] II), Chairman; Deputy Director Magdalena D. Imperio (Officeof the General Counsel and Legal Services [OGCLS]), Vice Chairman; Atty. PolicarpoG. Barcarse, Manager II (Centralized Applications and Licensing Group [CALG]); R. Wylengco, Manager II (Supervision and Examination Department [SED]III); Ms. Jocelyn L. Lobas, Manager II (SED V); Atty. Ruben B. Parto, Acting Manager II(SED I); Ms. Ma. Corazon T. Alva, Acting Manager II (SED II); Ms. Ma. Belinda , Bank Officer IV (Office of Supervisory Policy Development [OSPD]); Eileen S. Tagle, Bank Attorney I, (OGCLS); Ms. Maria Cynthia M. Sison, BankOfficer III (OSPD); Mr. Armando M. Dizon, Bank Officer II (CALG)); Atty. FlorabelleS. Madrid, Bank Officer I (CPC I), members; and Deputy Governor Nestor A.

8 Espenilla,Jr. of the Supervision and Examination Sector, Committee Secretariat is composed of Ms. Celedina P. Garbosa, (SED IV), Head; Ms. Ma. Corazon B. Bilgera, Bank Officer I (OSPD); P. Marcelino, Administrative Services Officer III (SED V); Mr. Felix B. Corsino,Jr., Administrative Services Officer III (SED III), Bangko Sentral ng PilipinasviPREFACE(1996 Edition)The MANUAL of REGULATIONS Banks (the New MANUAL ) is not only an updated editionbut also a revised and consolidated version of the first three volumes of the present Manualof REGULATIONS for Banks and Other Financial Intermediaries, Book I, II and III (the OldManual ). Its adoption was impelled by certain considerations, namely: (1) that the CentralBank of the Philippines as the administrative agency of the monetary, banking and creditsystem which promulgated the Old MANUAL has been replaced by the Bangko Sentral NgPilipinas (BSP) as the central monetary authority, (2) that the Old MANUAL was last updatedas of 31 December 1989 and since that time, significant developments in the statutory lawand the financial system of the country have rendered many of its provisions obsolete orirrelevant, and (3) that there was need to simplify the code of banking REGULATIONS forready accessibility to, and the convenience of, the accomplish the work of proposing revisions to the Old MANUAL , the MonetaryBoard of the BSP, in its Resolution No.

9 1203 dated 07 December 1994, directed the creationof a multi-departmental Ad Hoc Review Committee. This committee was officiallyconstituted under Office Order No. 2, Series of 1995 and consisted of Deputy GeneralCounsel Melpin A. Gonzaga (Office of the General Counsel and Legal Services), aschairman; Deputy Director Ma. Dolores B. Yuvienco (Supervisory Reports and StudiesOffice); Deputy Director Rolando A. Q. Agustin (Department of Commercial Banks I);Deputy Director Danilo A. Monasterio (Department of Rural Banks); Deputy DirectorErlinda S. J. Marzan (Department of Thrift Banks and Non-Bank Financial Institutions), asmembers; and Managing Director Fe B. Barin (Office of the Monetary Board), as technical staff of the Ad Hoc Committee was composed of Atty. Magdalena D.

10 Imperio,Bank Attorney III, as head; and Mr. Fernando B. Caballa, Manager II; Mr. Lauro C. Abuzo,Bank Officer III, Atty. Policarpo G. Barcarse, Manager II; Mr. Nicanor F. Rillera, ManagerII; and Mr. Aristides R. Wylengco, Manager II, as members. Deputy Governor Armando , the BSP General Counsel, acted as committee the aforesaid office order, the Ad Hoc Committee was instructed to examine,evaluate and review the provisions of the four (4) volumes of the Old MANUAL for purposesof (1) deleting therefrom provisions which are obsolete, redundant, irrelevant, superfluousor inconsistent with law, (2) amending provisions so as to make them consistent with eachother or to harmonize them with existing statutes, executive issuances and official policies,and (3) reformulating provisions to make them more responsive to the needs and concernsof the banking and financial intermediation discharging its mandated tasks, the Ad Hoc Review Committee sought thecomments of certain departments of the BSP, particularly, Treasury, Foreign Exchange,Economic Research, Cash, Accounting, and Loans and Credit, on the proposed changes toprovisions of the Old MANUAL relevant to their operations.