QuestionsQuestions (BSP CIRCULAR NO. 696)
It amends the Manual of Regulations for Banks (MORB) provisions on the minimum capitalization requirement for rural banks (and related entities), and also updates certain branching and other prerequisites.
It amends Subsec. X111.1 on minimum capitalization.
It depends on (1) the bank category, and for rural banks specifically, (2) the classification of the location of the rural bank’s head office (Metro Manila, Cebu/Davao cities, other cities, and municipal income classes).
PHP 100 million.
PHP 50 million.
PHP 25 million.
PHP 10 million.
PHP 5 million.
It applies upon: (a) establishment of a new bank; (b) conversion between categories; (c) relocation of head office of a TB/RB to an area of higher classification; and (d) when majority of the RB’s total assets and/or total deposit liabilities are regularly accounted for by branches in areas of higher classification (per branching guidelines).
For granting special banking authorities, the required minimum capital is the higher of (1) the required minimum capital under X111.1 at the time of application, or (2) the amount specified in the applicable sections for the special authority; it must be complied with on a continuing basis.
The transitory provision states that approved but not yet operating RBs, and pending/complete applications for establishment of a new RB, conversion from higher to RB, or grant of special banking authorities as of effectivity, shall not be covered by the new minimum capital requirement for RBs.
It amended Subsec. X151.4 by adding/clarifying rules on where branches may be established and, specifically, how RBs must comply with higher minimum capitalization if they regularly derive majority assets/deposits from branches in higher-classified areas.
Banks may generally establish branches anywhere in the Philippines, except in specific restricted areas (Makati, Mandaluyong, Manila, Parañaque, Pasay, Pasig, Quezon City, and San Juan).
No. As a proviso, RBs/Coop Banks shall not be allowed to establish branches in Metro Manila.
The RB must have combined capital accounts of at least PHP 10.0 million.
If the majority of the RB’s total assets and/or total deposit liabilities are regularly accounted for by branches located in such higher-classification areas, the RB must comply with the required minimum capital for the highest classification within one (1) year from the BSP finding.
The applicant must have complied with the minimum capital required under Subsec. X111.1.
It must meet the minimum capital under Subsec. X111.1 or PHP 20.0 million, whichever is higher (subject to prior Monetary Board approval).
Subsection X111.2 (capital build-up program) and Subsection X111.3 (Memorandum of Understanding, prompt corrective action program and sanctions) were deleted.
Fifteen (15) calendar days following its publication either in the Official Gazette or in a newspaper of general circulation.