Sanctions for non-compliance with minimum capital requirements
CIRCULAR NO. 176 Series of 1998
Pursuant to Monetary Board Resolution No. 1266 dated September 2, 1998, the following sanctions for non-compliance with minimum capital requirements are hereby prescribed:
Monetary Penalty:
For delayed or non-submission of the capital build-up program reckoned from the time the bank was notified in writing up to the time program has been submitted per banking day of delay, a monetary penalty of:
Type of Bank
Amount of Penalty
Expanded & Non-Expanded Commercial Banks
P10,000.00
Thrift Banks
P5,000.00
Rural Banks
P1,000.00
Non-Monetary Penalty:
Non-monetary penalties shall depend on the degree of capital deficiency incurred by the bank, as follows:
For COMMERCIAL BANKS:
% of Capital Deficiency
Penalty
Up to 20%
Suspension of authority to invest in non-allied undertakings (for EKBs only)
Suspension of authority to invest in allied undertakings
Suspension of securities and dealership functions (for EKBs only)
Suspension of branching privileges
Suspension of declaration of cash dividends
Up to 40%
Suspension of authority to invest in non-allied undertakings (for EKBs only)
Suspension of authority to invest in allied undertakings
Suspension of securities and dealership functions (for EKBs only)
Suspension of branching privileges
Suspension of declaration of cash dividends
Restrictions on overall loan growth/investments (new loans to the extent of collections only)
Restrictions on lending affiliates
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or handle government deposits
Up to 60%
Suspension of authority to invest in non-allied undertakings (for EKBs only)
Suspension of authority to invest in allied undertakings
Suspension of securities and dealership functions (for EKBs only)
Suspension of branching privileges
Suspension of declaration of cash dividends
Restrictions on overall loan growth/investments (new loans to the extent of collections only)
Restrictions on lending affiliates
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or handle government deposits
Suspension of authority to engage in quasi-banking activities
Suspension of authority to engage in derivative activities
Suspension of FCDU/EFCDU activities
Suspension of trust operations
Up to 80%
Suspension of authority to invest in non-allied undertakings (for EKBs only)
Suspension of authority to invest in allied undertakings
Suspension of securities and dealership functions (for EKBs only)
Suspension of branching privileges
Suspension of declaration of cash dividends
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or handle government deposits
Suspension of authority to engage in quasi-banking activities
Suspension of authority to engage in derivative activities
Suspension of FCDU/EFCDU activities
Suspension of trust operations
Suspension of international banking activities
Suspension of lending activities
More than 80%
Suspension of clearing privileges
Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws
Cease and desist
For THRIFT BANKS:
% of Capital Deficiency
Penalty
Up to 20%
Suspension of branching privileges
Suspension of declaration of cash dividends
Up to 40%
Suspension of branching privileges
Suspension of declaration of cash dividends
Restrictions on overall loan growth/investments (new loans to the extent of collections only)
Restrictions on lending to affiliates
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or create demand deposits or operate NOW accounts
Suspension of authority to accept government deposits
Up to 60%
Suspension of branching privileges
Suspension of declaration of cash dividends
Restrictions on overall loan growth/investments (new loans to the extent of collections only)
Restrictions on lending to affiliates
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or create demand deposits or operate NOW accounts
Suspension of authority to accept government deposits
Suspension of authority to engage in quasi-banking activities
Suspension of FCDU activities
Suspension of authority to invest in allied undertakings
Suspension of trust operations
Up to 80%
Suspension of branching privileges
Suspension of declaration of cash dividends
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or create demand deposits or operate NOW accounts
Suspension of authority to accept government deposits
Suspension of authority to engage in quasi-banking activities
Suspension of FCDU activities
Suspension of authority to invest in allied undertakings
Suspension of trust operations
Suspension of lending activities
Suspension of issuance of domestic LCs
More than 80%
Suspension of clearing privileges
Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws
Cease and desist
For RURAL BANKS:
% of Capital Deficiency
Penalty
Up to 20 %
Suspension of branching privileges
Suspension of declaration of cash dividends
Up to 40%
Suspension of branching privileges
Suspension of declaration of cash dividends
Restrictions on overall loan growth/investments (new loans to the extent of collections only)
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or create demand deposits or operate NOW accounts
Suspension of authority to accept government deposits
Up to 60%
Suspension of branching privileges
Suspension of declaration of cash dividends
Restrictions on overall loan growth/investments (new loans to the extent of collections only)
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or create demand deposits or operate NOW accounts
Suspension of authority to accept government deposits
Suspension of authority to invest in allied undertakings
Up to 80%
Suspension of branching privileges
Suspension of declaration of cash dividends
Denial of access to BSP rediscounting facilities
Suspension of authority to accept or create demand deposits or operate NOW accounts
Suspension of authority to accept government deposits
Suspension of authority to invest in allied undertakings
Suspension of lending/investment activities
More than 80%
Suspension of clearing privileges
Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws
Cease and desist
This Circular shall take effect immediately.
FOR THE MONETARY BOARD:
GABRIEL C. SINGSON Governor
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