(NAR) VOL. 29 NO. 1/ JANUARY - MARCH 18
“Sec. X902 Payment of Monetary Penalties and Other Charges. The following regulations shall govern the payment of monetary penalties and other charges by banks, and/or their directors and/or officers.”Section 2. Subsection X902.1 of the MORB is hereby amended as follows:
a. Statement of Policy
The Bangko Sentral recognizes the need to impose monetary penalties as one of the possible sanctions to hold banks, and/or their directors and/or officers accountable for their conduct and to deter the future commission of violations.
This Subsection sets forth the guidelines in the imposition of monetary penalties as may be warranted under the circumstances based on the following general principles laid down in the Bangko Sentral Supervisory Enforcement Policy provided under Section X009 of the MORB taking into consideration their impact on the bank’s financial condition:
(1) Root cause diagnosis;
(2) Consistently matching the severity of enforcement action to the supervisory issue;
(3) Successive or simultaneous deployment of enforcement actions; (4) Monitorability and follow-through; and
(5) Escalation of enforcement actions.
Accordingly, the Bangko Sentral may impose monetary penalties, singly or together with non-monetary sanctions, if appropriate, even at the outset or as an escalated sanction.
b. The following are the guidelines on the imposition of monetary penalties on banks, and/or their directors and/or officers and the payment of such monetary penalties and other charges:
(1) Banks, and/or their directors and/or officers shall be imposed the monetary penalties prescribed under applicable laws or other Bangko Sentral rules and regulations.
In the absence of provision on monetary penalty for the violation/offense, banks and/or their directors and/or officers may be imposed a maximum monetary penalty of P30,000.00 per calendar day for each violation/ offense in accordance with the following schedule:
Asset Size | U p to P20 0 million | Above P200 | Above P500 | Above P1 billion | Abov e P1 0 | Above P50 billion |
Penalty | ||||||
High | 5 ,000 | 10,000 | 15,000 | 20,000 | 25 , 000 | 30 ,000 |
Low | 2,500 | 5 ,000 | 7 , 500 | 10,000 | 12 , 500 | 15.000 |
The Bangko Sentral may use a penalty rate prescribed under the next higher range of asset size after considering the following attendant circumstances: (a) the harm caused or potential harm caused to the bank and/or its stakeholders; (b) the seriousness of the violation or irregularity; and (c) the intentionality and frequency; Provided, That the resulting penalty will have no adverse impact on the BSFI’s operations, liquidity and/or capitalization.
lf the monetary penalty is less than the gain derived or loss avoided by the bank and/or director and/or officer in committing the violation/s, the Bangko Sentral may assess total monetary penalties equivalent to the gain derived or loss avoided.
The appropriate supervising department shall notify the bank/director or officer concerned of the violation and the corresponding amount of monetary penalty, together with a directive for the bank/director or officer concerned to explain within fifteen (15) banking/business days from receipt of the letter why the assessed monetary penalty should not be imposed against it/him/her. The recommendation to impose monetary penalties shall be approved by the Governor or the Monetary Board, as the case may be. The decision of the Governor/Monetary Board shall be communicated to the bank/director or officer concerned.
However, the Bangko Sentral is not precluded from imposing non- monetary sanctions along with monetary penalties if circumstances so warrant.
(2) Basis for the computation of the period or duration of penalty. xxx
(3) Request for Reconsideration or Appeal. A request for reconsideration on the monetary penalty approved by the Governor/Monetary Board is allowed. The bank/director or officer concerned shall be notified of thedecision of the Governor/Monetary Board thereon. An appeal from the decision of the Governor on the request for reconsideration may be made to the Monetary Board.
A request for reconsideration or appeal shall be filed within fifteen (15) calendar days from receipt of the notice of the decision of the Governor/Monetary Board.
(4) Payment of Monetary Penalties. Banks, and/or their directors and/or officers shall pay the monetary penalties within fifteen (15) calendar days from receipt of the notice of the decision of the Governor/Monetary Board or receipt of the notice of the decision denying the appeal or request for reconsideration, where applicable.
In the case of banks, penalties which remain unpaid after due date shall be automatically debited against their corresponding demand deposit account (DDA) with the Bangko Sentral.Section 3. Applicability to non-bank financial institutions (NBFls). The provisions under Sections 1 and 2 above shall likewise apply to QBs, NSSLAs, and other NBFIs with trust license as follows:
In the case of directors and/or officers, their employer bank shall advance the payment of the penalty to the Bangko Sentral in their behalf on or before due date through automatic debit of its DDA with the Bangko Sentral. In case the director and/or officer is no longer connected with the bank, payment thereof shall be for the account of the director and/or officer who shall pay directly to the Bangko Sentral in the form of cash or check or such other acceptable means of payment and in accordance with the provisions of Subsec. X902.4.
For uniform implementation of the above regulations, the procedural guidelines embodied in Appendix 29, MORB shall be observed.
(5) Additional Charge for Late Payment of Monetary Penalty. Late payment of monetary penalty shall be subject to an additional charge of six percent (6%) per annum to be computed from the time said penalty becomes due and payable up to the time of actual payment.
a) Subsections 4601S.1 and 4902Q.1 of the MORNBFI shall cite the reference of the Bangko Sentral Supervisory Enforcement Policy to Section 4009Q of the MORNBFI instead of Section X009 of the MORB;Section 4. Item 6 of Appendix 29 of the MORB and Q-22 of the MORNBFI are hereby amended as follows:
b) Subsection 4501S.1 of the MORNBFI shall use the term “trustees” instead of “directors”;
c) Subsection 4601S.1c of the MORNBFI shall cite that monetary penalties are approved only by the Monetary Board;
d) Subsection 4902Q.ld shall cite that QBs shall, within fifteen (15) calendar days from receipt of the notice of decision of the Governor/Monetary Board, pay the fines for reserve deficiency, reportorial delay/deficiency, refusal to permit examination, or failure to comply with, or violation of any law or any order, instruction or regulation issued by the Monetary Board, or any order, instruction or ruling by the Governor;
e) Subsection 4601S.1d shall cite that all NSSLAs and their trustees and/or officers shall pay the penalties in the form of cash or check or such other acceptable means of payment and in accordance with the provisions of Subsection 4902Q.4 of the MORNBFI; and
f) subsections 4601S.1d and 4902Q.1d shall cite the reference of the procedural guidelines to Appendix Q-22 of the MORNBFI instead of Appendix 29 of the MORB.
“Except as otherwise indicated, any violation of the provisions of this Part shall be subject to Sections 36 and 37 of Republic Act No. 7553.b. Sections 4199Q, 4299Q, 4399Q, 4599Q, 4699Q, 4799Q and 4999Q of the MORNBFI, as follows:
The guidelines for the imposition of sanctions falling under Section 37 of Republic Act No. 7653 on banks, and/or their directors and/or officers are shown in Section X009 and Subsection X902.1of the MORB.”