SANCTIONS FOR NON-COMPLIANCE WITH MINIMUM CAPITAL REQUIREMENTS
National Administrative Register September 2, 1998 [ BSP CIRCULAR NO. 176, September 07, 1998 ]
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 Banks | P 10,000.00 |
| 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 |
| Up to 20% | – Suspension of authority to invest in non-allied 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 | |
| Up to 40% | – Suspension of authority to invest in non-allied 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 | |
| Up to 60% | – Suspension of authority to invest in non-allied 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 | |
| Up to 80% | – Suspension of authority to invest in non-allied 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 desist |
For 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
Governor