BSP CIRCULAR LETTER, November 23, 2000
COMPUTATION OF PENALTIES UNDER P. D. 717
of the Manual of Regulations, as amended by Circular 236, which provides
that for non-compliance/under-compliance with the mandatory credit
allocation for agri-agra credit, “a daily fine in proportion to degree of compliance shall be imposed depending on the total assets of the banks as of reporting period”.
A sample computation of penalties to be imposed on a bank for
under-compliance/non-compliance with the requirements of the Agri-Agra
Law is illustrated below:
Illustration A:
A bank with total assets of P100 million has a degree of
compliance with the agri-agra credit allocation requirement of 45% (i.e.
only 45% of the required 25% of its loanable funds was allocated for
agri-agra purposes.Formula: Maximum Daily Fine x Degree of undercompliance x # of days with under-compliance
|
Where: Actual Ratio of Compliance with: |
|
|
10% Credit Allocation Requirement |
5.00% |
|
15% Credit Allocation Requirement |
6.25% |
|
25% Total Agri-Agra Credit Requirement |
11.25% |
|
Degree of Compliance |
45.00% |
|
Degree of under-compliance 100% – (11.25% ¸ 25%) |
55.00% |
|
Maximum Daily Fine for under-compliance(for banks with assets of P100 million and below) |
P100.00 |
|
Assuming the 55% undercompliance |
P55.00 |
|
Number of days with undercompliance |
15.00 |
|
Amount of Penalty |
P825.00 |
Illustration B:
Bank A with total assets of P100 million has a degree of
compliance with the agra credit allocation requirement of 50% and with
agri credit of 133%, while Bank B with total assets of P100 million has a
degree of compliance with the agra credit of 120% and with agri credit
of 86.17%. It is assumed that the rule on offsetting, i. e. excess
compliance in the 10% agra credit may be used to offset a deficiency, if
any, in the 15% agri-credit, but not vice-versa, was complied.
|
Bank A |
Bank B |
|
|
Where: Actual Ratio of Compliance with: |
||
|
a. 10% Credit Allocation Requirement |
5% |
12%* |
|
b. 15% Credit Allocation Requirement |
20%** |
13% |
|
c. 25% Total Agri-Agra Credit Requirement |
25% |
25% |
|
Total degree of compliance: Bank A (5%+15%) : |
25% |
80% |
|
Bank B (12% + 13%): |
25% |
100% |
|
Total degree of under-compliance |
20% |
0% |
|
Maximum Daily Fine for under-compliance(for banks with assets of P100 million and below) |
P100.00 |
P100.00 |
|
Daily Penalty (P100.00 x total degree of u/compliance) |
P20.00 |
– |
|
Number of days with under-compliance |
15 |
– |
|
Amount of Penalty |
P300.00 |
– |
* Excess compliance is eligible for offsetting
** Excess compliance is not eligible for offsetting
For information/guidance.
Adopted: 23 Nov. 2000
(SGD.) ALBERTO REYES
Deputy Governor