Amendment to Item 2 of the calculation of reserve requirements during the holidays in December 2002

CIRCULAR LETTER Series of 2002

TO: All Rural, Cooperative and Microfinance Banks

Sec. 22 of Republic Act No. 7353 requires rural banks to contribute to the Bangko Sentral Ng Pilipinas (BSP) an annual fee (supervisory fee) to help defray the cost of maintaining the appropriate supervising Department within the Bangko Sentral in an amount to be determined by the Monetary Board but in no case to exceed 1/40 of 1% of its average total assets during the preceding year.

Section 28, R.A. No. 7653, requires banks to pay to the BSP within the first thirty (30) days of each year, an annual fee (supervisory fee) in an amount equal to the percentage as may be prescribed by the Monetary Board of its average total assets during the preceding year.

The Monetary Board in its Resolution No. 48 dated January 7, 2000, prescribes the mode of computing the annual banking/supervision fee as follows:

x x x The Board decided that annual banking/supervision fees of rural banks beginning fiscal year 1999 be computed using a measurement of average total assets based on the banks’ balance sheets as of month-end for the months of March, June, September and December and dividing by 4 the sum of end-of-month balances.

The computation of the supervisory fee is illustrated as follows:

(All amounts in Thousand Pesos)

2002

March

June

September

December

Total

Total Assets P 1,000 P 2,000 P 3,000 P 4,000 P 10,000

Less:

Cash on Hand P     10 P     20 P     50 P     80 P     160

Due from Other Banks        50        70       80      150        350

Due from BSP        20        50       70       70        210

Total Deductions P     80 P   140 P 200 P 300 P     720

Net Assessable Assets P  920 P 1,860 P 2,800 P 3,700 P  9,280

Average end-of-month balances (divide by 4)         P   2,320

Annual Supervisory Fee – Subsec. X608.1 MOR (1/ 40 of 1% or .00025)           P0.580

Rural, cooperative and microfinance banks are, therefore, enjoined to compute and pay the supervisory fees on or before January 30 of each year starting/effective 2003 and every year thereafter.

The amount of the fee as computed by the banks shall be subject to BSP review and verification, and appropriate adjustment, as the case may be.

Non-payment of the supervisory fee within the prescribed period shall subject the concerned bank to the sanctions prescribed under Sections 34, 35, 36 and 37 of R.A. No. 7653.

ALBERTO V. REYES Deputy Governor