Question & AnswerQ&A (CIRCULAR NO. 890)
The main purpose of Circular No. 890 is to approve amendments to the Manual of Regulations for Banks (MORB) and Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) by the Monetary Board to align various circular provisions, update sections and appendices, and ensure consistency within the regulatory framework.
The provisions of Circular No. 829 are renumbered and aligned as sections or chapters in the MORB/MORNBFI such as definitions, treatment and disposition of counterfeit currency, reproduction of legal tender, clean note policy, replacement and redemption of mutilated notes, penalties, and other related subjects.
Appending this framework ensures that banks and non-bank financial institutions comply with enhanced regulatory guidelines under Basel III for dealing with domestic systemically important banks, reflecting updated risk management and supervisory requirements.
These are the Europay, MasterCard, and Visa (EMV) Implementation Guidelines which serve as standards for the chip-enabled card technology to enhance transaction security, now made part of MORB to guide banks on implementation standards.
The guidelines cover market participants and investment products for PERA, including applicability, eligibility criteria, qualification and accreditation requirements, application procedures, security for faithful performance of administrators, grounds for suspension or revocation, penalties, and reportorial requirements.
It renumbers and adjusts section/subsection citations from previous circulars to align them with the current MORB/MORNBFI numbering system for consistency and clarity in regulatory references.
Certain transitory provisions of earlier circulars such as 823, 824, 830, 832, and 844 are footnoted in relevant MORB/MORNBFI sections, helping institutions manage compliance during transitional regulatory periods.
Thrift banks, including their branches and extensions, can market microinsurance products approved by the Insurance Commission as an allied undertaking under the General Banking Law, subject to compliance with the prescribed regulatory framework and necessary licensing.
MIFT instructions must be signature-verified, accompanied by a customer agreement outlining manual instruction procedures and responsibilities. Additional security such as call-backs, test word verification, controlled PIN codes, or other validation mechanisms must be utilized, with faxed instructions sent from secure environments and monitored to prevent fraud.
Circular No. 827 deleted Section X116, Subsections X116.1 to X116.7, and Appendix 63a of the MORB. References to these deleted provisions in other MORB sections were changed to refer to applicable and existing capital adequacy frameworks.