Simultaneous imposition of administrative sanctions and penalties for non-compliance with/or non-reporting of mandated credit allocation to small enterprises (SMEs)

CIRCULAR NO. 127 Series of 1997

The Monetary Board, in its Resolution No. 506 dated April 30, 1997 approved the simultaneous imposition of the following administrative sanctions and penalties for non-compliance with/or non-reporting of mandated credit allocation to small enterprises (SMEs), as an amendment of Section 8 of Circular No. 1288, as amended, which shall read as follows;

"Section 8, Without prejudice to the penal sanctions in Section 14 of R.A. No. 6977, any or all of the following administrative sanctions shall be imposed for non-compliance with/or non-reporting of mandated credit allocation to small enterprises and for any other violation of this Circular:

A. For non-compliance with the mandated credit allocation to small enterprises for each reporting period.

Suspension of rediscounting privileges;

Suspension of the privilege to establish branches until the mandated credit allocation to small enterprises for the four (4) quarters immediately preceding the date of application has been fully complied with; and/or

Fine

i) First Offense

Fine not exceeding P5,000 for rural banks (RBs), P10,000 for thrift banks (TBs) and P20,000 for expanded commercial banks (EKBs) and commercial banks (KBs); and

Warning to the responsible officer and members of the Board and President/Chief Executive Officer that subsequent offense shall be subject to more severe sanctions.

ii) Second Offense

Fine not exceeding P10,000 for RBs, P15,000 for TBs and P25,000 for EKBs and KBs; and

Reprimand to the responsible officers and members of the Board and President/Chief Executive Officer.

iii) For third and subsequent offense

Fine of P15,000 for RBs, P20,000 for TBs and P30,000 for EKBs and KBs; and

Fine not exceeding P20,000 each for the responsible officers and members of the Board and President/Chief Executive Officer.

B) For non-reporting

Non-reporting entities shall be fined equivalent to monetary penalties charged for non-submission of a major report under Subsections 1161.2b, 2161.2b and 3161.2b (Books I-III) of the Manual of Regulations for Banks and Other Financial Intermediaries, as follows:

EKBs/KBs not exceeding P200 per day of delay TBs not exceeding 100 per day of delay RBs not exceeding 30 per day of delay

C) For Other Violations

Fines in the amount stated in Item A(3) of this Circular shall be imposed for other violations."

For the Monetary Board:

EDGARDO P. ZIALCITA Officer-in-Charge