Question & AnswerQ&A (BSP CIRCULAR NO. 837)
The primary purpose is to amend pertinent regulations on Salary Loans to promote sustainable development of consumer lending under fair and sound credit practices.
Salary Loans are unsecured loans granted to individuals based on regular salary, pension, or other fixed compensation, where repayment is made from future remunerations through salary deduction, debit from borrower's deposit account, over-the-counter payment, or other payment arrangements agreed upon by borrower and lender.
The Manual of Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) are amended.
The Manual of Accounts was revised to include a specific classification for Salary Loans under Loans to Individuals for Consumption Purposes, and the reporting templates were updated to show a line for Salary Loans.
Yes, the Simplified Financial Reporting Package for Rural and Cooperative Banks (SFRP) reporting templates were similarly revised to include Salary Loans.
Banks and Non-Stock Savings and Loan Associations (NSSLAs) shall adopt the revised templates effective with the report ending June 30, 2014.
They are classified as (c.8c) Salary Loans under Loans to Individuals for Consumption Purposes, representing the amortized cost of unsecured loans granted based on salary or fixed compensation.
Repayment can be through salary deduction, debit from borrower's deposit account, over-the-counter payment, or any other payment arrangement agreed upon by borrower and lender.
The text of the circular as provided does not specify penalties; it only mandates adoption of the amended reporting templates and definitions.
The Monetary Board of the Bangko Sentral ng Pilipinas approved the amendments under Resolution No. 894 dated June 5, 2014.