Minimum Capital Requirement for Rural Banks

BnryKp Sentraf ng Sihpinas MAYNILA, PILIPINAS OFFICE OF THE GOVERNOR Circular No.696 Series of 2OT_ Subject : Minimum Capital Requirement for Rural Banks Pursuant to Monetary Board Resolution No. 1452 dated 14 october 2010. the following provisions of the Manual of Regulations for Banks (MoRB) are hereby amended as follows: section 1. subsec. x111.1on minimum capitalization is hereby amended to read as follows: "subsec. x111.1 Minimum capitalization. The required minimum capitalization (a) upon establishment of a new bank, (b) upon conversion of an existing bank from a lower to a higher category bank and vice versa, (c) upon relocation of the head office or a TBTRB in an area of highei classification, and (d) _when majority of an RB's total assets and/or majority of its totaldeposit liabilities are regularly accounted for by branches located in areas of higher classification as provided in subsec. x1s1.4 on the branching guidelines, shall be as follows: Required Minimum Bank Category Caoitalization a. UBs F 4.95 billion b. KBs 2.40 billion c. TBs with Head Office in: (1) Metro Manila 325 million (2) Outside Metro Manita 52 million d. RBs with Head Office in: (1) Metro Manita 100 million (2) Cities of Cebu and Davao 50 million (3) Al!other cities 25 million (a) t],'to +" cliss municipatities 10 million (S) St to O* ctass munEipatities 5 million e. Coop Banks 10 million PnrunrueuplNc MATATAG, BANsANG pRrunrnc A Mabini st., Malate 1004, Manira, phirippines a rrunkrine (632) 52+70-110 uRl:www.bsp.gov.ph o e.mail: [email protected]

For the grant of the following special banking authorities: a. Quasi-banking functions for TBs; b. Trust and other fiduciary business for U/KBs and TBs; c. Limited trust for TBs and RBs/Coop Banks; d. Foreign culrency deposit uniUexpanded foreign currency deposit unit (FCDU/EFCDU); e. lssuance of foreign letters of credit (LCs) for TBs; f. Acceptance of demand deposit and NOW accounts for TBs and RBs/Coop Banks; and g. Acting as third party securities custodian/registry; the higher of (a) the required minimum capital under this Subsection at the time of the application for the grant of special banking authority or (b) the amount specified in the applicable Sections/Subsections for the grant of special banking authorities shall be the required minimum capital wttich shall be complied with on a continuing basis. Transitory Provision. Approved but not yet operating RBs as well as pending and complete applications for establishment of a new RB or conversion of an existing bank from a higher category to an RB or for the grant of special banking authorities, as of the effectivity of the implementing Circular shall not be covered by the new minimum capital requirement for RBs." Section 2. Subsec. X151.4 on branching guidelines is hereby amended to read as follows: "Subsec. X151.4 Bnnching guidelines- Branches may be established, subject to the following guidelines: ..XXX "d. As a general rule, banks shall be allowed to establish branches anyahere in the Philippines, except in the cities of Makati, Mandaluyong, Minila, parafraque, Pasay, Pasig, Quezon and San Juan (restricted areas): Provided, however, That RBs/Coop Banks shall not be allowed to establish branches in Metro Manila: Provided, further, That- .XXX "(4) Subject to the restrictions in ltems "5", "6', '7" and "8" hereof, an RB with combined capital accounts of at least P10.0 million, may establish branches in cities/municipalities of higher classification and with corresponding higher capitalization requirements, except in Metro Manila: provided, Thit where the majority of the RB's total assets and/or majority of its total deposit liabilities are regularly accounted for by branches located in such cities/municipalities of higher classification, the RB shall comply with the required minimum capital under subsection X111.1 for that city/municipaiity of the highest classification within one (1) year trom the BSP finding.

Section 3. Subsec. )<2.01.1 on prerequisites to accept or create demand deposits for thrift banks/rural banks/cooperative banks is hereby amended to read as follows: "Subsec. X201.1 Prerequisites to accept or create demand deposrls for Thrift Banks/Rural Banks/Cooperative Banks.In addition to the Standard Pregualification Requirements for the Grant of Banking Authorities enumerated in Appendix 5 a TB/RB/Coop Bank applying for authority to accept or create demand deposits shall also comply with the following requirements: "a. The applicant TBlRB/Coop Bank must have complied with the minimum capital required under Subsec. X1 11.1. The terms capitaland nef assefs shall have the same meaning as in Sec. X11 1. ob. xxx "c. x x x-" Section 4. subsec. x501.2 on qualification requirements for FCDU or EFCDU is hereby amended to read as follows: "Subsec. X501.2 Qualification requiremenE "a. XXX "b. xxx "c. RBs/Coop Banks may, subject to prior Monetary Board approval, be authorized to operate an FCDU: provided, That they meet the minimum capital under subsec. X1 1 1.1 or P20.0 million, whichever is higher. x x x." section 5. subsection X111.2 on capital build-up program and subsection x1 11.3 on Memorandum of Understanding, prompt corrective action program and sanctions are hereby deleted. Section 6. Effectivity. This Circular shall take effect fifteen (15) calendar days follorrving its publication either in the official Gazette or in a newspaper of general circulation. \am FOR THE MONETARY BOARD: AMAND/ M. TETANGCO, JR. t Govemor ?1 octouerzoto