Minimum Capitalization of Banks

BANGKO SENTRAL NG PILIPINAS

OFFICE OF THE GOVERNOR

CIRCULAR NO. 854 Series of 2014

Subject: Minimum Capitalization of Banks

the new minimum capitalization of banks. The Monetary Board, in its Resolution No. 1607 dated 9 October 2014, approved

Section 1. Subsection X111.1 of the Manual of Regulation for Banks (MORB) on Minimum Capitalization is hereby amended, as follows:

of banks shall be as follows: "Subsection X111.1 Minimum Capitalization. The minimum capitalization

Bank Category Proposed Minimum Capitalization Universal Banks Head Office only 3.00 billion

P Up to 10 branches 11 to 100 branches1 More than 100 branches'/ 20.00 billion 15.00 billion 6.00 billion

Commercial Banks

Head Office only D 2.00 billion Up to 10 branches1/ 11 to 100 branches1 More than 100 branches" 10.00 billion 15.00 billion 4.00 billion

Head Office in National Capitat Region Thrift Banks Head Office only P 500 million

. More than 50 branches1 Up to 10 branches? 11 to 50 branches1 1.00 billion 750 million 2.00 billion

National Capital Region Head Office in All Other Areas " Outside Up to 10 branches1/ 11 to 50 branches? More than 50 branches? Head Office onty 200 million 300 million 800 million 400 million

Bank Category Proposed Minimum Capitalization "Rural and Cooperative Banks Head Office in National Capital Region Head Office only p 50 million

Up to 10 branches1/ 11 to 50 branches1/ More than 50 branches/ 100 million 200 million 75 million

Head Office in All Other Areas Outside (All Cities up to 3rd class municipalities) National Capital Region Head Office only 20 million

R Up to 10 branches1 11 to 50 branches? 40 million 30 million

C

More than 50 branches/ 80 million

(4th class to 6th class municipalities) Head Office in All Other Areas Outside National Capital Region -Head Office only P 10 million

-Up to 10 branches/ :11 to 50 branches1 More than 50 branches/ 40 miflion 20 million 15 million

I7 Branches - inciusive of Head Office

accounted for by branches located in areas of higher classification as provided in Subsection X151.4 on the branching guidelines. majority of an RB's total assets and/or majority of its total liabilities are 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 of a TB/RB in an area of higher classification, and (d) when The above shall also be the required minimum capitalization (a) upon

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 current deposit unit/expanded foreign currency deposit unit

e Issuance of foreign letters of credit (LCs) for TBs; (FCDU/EFCDU);

f Acceptance of demand deposit and NOW accounts for TBs and RBs/Coop

Banks; and g. Acting as third-party custodian/registry;

Page 2 of 3

be complied with on a continuing basis. 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 which shall

circular within which to comply. BSP, shall be allowed five (5) years from effectivity of this circular within which to meet the above minimum capital requirements. Banks granted with special banking authorities/licenses which require compliance with minimum capital requirements shall be given five (5) years from effectivity of this Transitory Provisions. Banks which are existing, or which are already authorized by the Monetary Board but not yet operating, or persons from whom completed applications have been received but pending action by the

their articles of incorporation/cooperation. capital stock, affected banks shall cause the corresponding amendments to purpose within one (1) year from date of effectivity of this circular. If the Banks which comply with the new capital levels shall submit to the BSP a certification to this effect within thirty (30) calendar days from date of effectivity of this circular. Banks not meeting the required minimum capital must submit to the BSP an acceptable capital build-up program for this prescribed minimum capital necessitates an increase in the authorized

under existing banking laws and/or BSP rules and regulations." The appropriate supervising and examining department of the BSP will build-up program. The BSP may require appropriate actions and/or impose sanctions for non-compliance with the capital build-up program as provided evaluate the continuing compliance of banks to the aforementioned capital

No. 696 dated 19 October 2010 and Circular No. 715 dated 4 March 2011 are Summarized in Appendix 104 of the Manual of Regulations for Banks. Section 2. The previous BSP issuances on minimum capitai requirements as provided in Circular No. 156 dated 19 March 1998, Circular No. 257 dated 15 August 2000, Circular

its official publication either in the Official Gazette or in a newspaper of general Section 3. Effectivity. The Circular shall take effect fifteen (15) calendar days following circulation.

FOR THE MONETARY BOARD:

AMANDO M. TETANGCO, JR.

Governor 2} October 2014

Page 3 of 3