Question & AnswerQ&A (BSP CIRCULAR NO. 715, S. 2011)
The minimum capitalization requirements apply upon establishment of a new bank, conversion of a bank from a lower to a higher category and vice versa, relocation of the head office of a thrift bank or rural bank in an area of higher classification, and when the majority of a rural bank's total assets or deposit liabilities are accounted for by branches in higher-classified areas.
The required minimum capitalization for a thrift bank with its head office in Metro Manila is 1 billion Philippine Pesos.
The minimum capitalization requirement for a rural bank with its head office in a 1st to 4th class municipality is 10 million Philippine Pesos.
Special banking authorities that require higher minimum capitalization include quasi-banking functions for TBs, trust and other fiduciary businesses for upper and commercial banks and TBs, limited trust for TBs and RBs/Coop Banks, foreign currency deposit units, issuance of foreign letters of credit for TBs, acceptance of demand deposit and NOW accounts, and acting as third party securities custodian or registry.
The minimum capitalization requirement for cooperative banks is 10 million Philippine Pesos.
No, approved but not yet operating rural banks and thrift banks as well as pending and complete applications for establishment or conversion before the effectivity of Circular No. 715 are not covered by the new minimum capital requirements.
Theoretical capital is assigned based on the location of the head office and the bank classification: For example, for Universal Banks/KBs, it's P100 million in Metro Manila; for Thrift Banks, P25 million; and for Rural Banks/Coop Banks, P10 million. Lower amounts are assigned for other cities and municipalities according to class.
The minimum capitalization required for knowledge banks (KBs) is 2.40 billion Philippine Pesos.
The circular takes effect fifteen (15) calendar days following its publication in the Official Gazette or in a newspaper of general circulation.
The circular was signed by Juan De Zuaiga, Jr., Officer-in-Charge of the Monetary Board.