Amendments to the provisions of Section X266 and Subsection X266.1 of the Manual of Regulations for Banks

CIRCULAR NO. 305 Series of 2001

Pursuant to Monetary Board Resolution No. 1615 dated October 11, 2001, the provisions of Section X266 and Subsection X266.1 of the Manual of Regulations for Banks are hereby amended to read, as follows:

“Sec. X266 Deposit Pick-up/Cash Delivery Services. The following are the guidelines on the deposit pick-up/cash delivery services of banks;

a. As a general rule, deposit pick-up/cash delivery services shall be limited to the following:

(1) To service the need of valued clients whose daily average deposit amounts to: P500 thousand – for Metro Manila and Metro Cebu clients/ depositors P300 thousand – for outside Metro Manila and Metro Cebu clients/ depositors

(2) To be serviced during regular banking hours and days only, unless the nature of the business and the volume of the deposits/cash would warrant servicing beyond regular banking hours and days, in which case justification therefor should be submitted to the satisfaction of the appropriate supervising and examining department.

b.  Prior BSP authority is not required before banks can engage in deposit pick-up/cash delivery services, provided, the following conditions are complied with:

(1) Pick-up of deposits/cash delivery shall be made with the use of armored cars, which shall not be operated as a mobile bank used in soliciting deposits from the general public, or in any manner in carrying out banking transactions/services other than to afford security of deposit/cash items in transit;

(2) Pick-up of deposits/cash delivery may be made with the use of non-armored vehicles on an unscheduled request; Provided, That:

(a) all armored vehicles have already been fielded and the request has to be served immediately; and

(b) it is within a five (5) kilometer radius of a servicing banking office.

(3) The risk of loss involved in the pick-up of deposits/ cash delivery shall be adequately covered by insurance, and the armored car/ non-armored car to be used shall be provided, with at least two (2) armed guards and supervised by at least two (2) officers of the bank;

(4) The deposit/cash delivery transactions shall be booked in accordance with existing regulation;

(5) Pick-up of deposits /cash delivery shall not be allowed on days other than the bank’s regular banking days;

(6) The strictest measure of safeguards, control and confidentiality will be adopted in implementing the services;

(7) A separate record/log book for each armored car/non-armored car shall be maintained by the bank which shall contain the information on the deposit pick-up/ cash delivery activities of the armored car/ non-armored car to be supported by “trip tickets” signed by a responsible officer of the bank;

(8) Records and/or such other reports that may be required of the bank from time to time shall be made available for examination/inspection by the authorized representative(s) of the appropriate supervising department of the BSP; and

c.  If the use of the non-armored car under b(2) becomes regular, the bank shall engage an armored car to take its place.  Regularity shall mean daily ( i.e., regular banking days) or periodic (e.g., every 15th or end of the month) servicing of a valued client within a three (3) month period.

d.  If any of the above conditions are not met, the BSP may suspend the deposit pick-up/cash delivery operations of the bank without prejudice to the imposition of sanctions under Section 37 of R.A. No. 7653.

“X266.1Operation of armored cars. Except for item b(2) of Section X266, banks shall use armored cars to afford security in collection and/or delivering cash or securities and other valuables from or to their clients, branch or extension offices or the BSP, provided such armored cars are not operated as mobile banks.”

This Circular shall take effect immediately.

FOR THE MONETARY BOARD:

RAFAEL B. BUENAVENTURA Governor