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(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:
Non-Monetary Penalty:
Non-monetary penalties shall depend on the degree of capital deficiency incurred by the bank, as follows:
For COMMERCIAL BANKS:
For THRIFT BANKS
For RURAL BANKS
This Circular shall take effect immediately.
Adopted: 7 Sept. 1998
(SGD.) GABRIEL C. SINGSON
Governor
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