Question & AnswerQ&A (CIRCULAR NO. 988)
The Circular covers banks and quasi-banks (QBs) including their subsidiaries and affiliates engaged in allied activities, non-stock savings and loan associations (NSSLAs), other non-bank institutions with trust licenses, and their directors/trustees and/or officers.
No, it does not apply where specific monetary penalties are provided under applicable laws or other Bangko Sentral rules and regulations, but it covers appeal, collection, and payment guidelines even for those penalties.
A maximum monetary penalty of P30,000.00 per calendar day for each violation/offense may be imposed, depending on the asset size of the bank and the severity of the violation.
Penalty levels are set on a scale from low to high based on asset size brackets, ranging from P2,500 to P30,000 per violation per day, with higher asset sizes facing higher penalties for high severity violations.
Factors include the harm caused or potential harm to the bank and its stakeholders, the seriousness of the violation or irregularity, and the intentionality and frequency of the offense, provided the penalty will not adversely impact the bank's operations, liquidity or capitalization.
The Bangko Sentral may assess total monetary penalties equivalent to the gain derived or loss avoided to ensure penalties are commensurate with the offense.
The supervising department notifies the bank/director or officer of the violation and penalty amount and gives fifteen (15) banking/business days to explain why the penalty should not be imposed. The imposition recommendation is approved by the Governor or the Monetary Board, whose decision is communicated to the concerned party.
Yes, requests for reconsideration can be filed within fifteen (15) calendar days from receipt of the decision from the Governor/Monetary Board, and appeals can be made to the Monetary Board if the Governor denies the reconsideration request.
Penalties must be paid within fifteen (15) calendar days from notice of decision. For banks, unpaid penalties are automatically debited from their demand deposit account with the Bangko Sentral. For directors/officers, their employer bank advances payment or they pay directly if no longer connected to the bank. Late payment incurs an additional charge of six percent (6%) per annum.
Such directors or officers must pay the penalties directly to the Bangko Sentral in cash, check, or other acceptable means within the specified payment period.
Yes, the provisions apply to quasi-banks, NSSLAs, and other non-bank financial institutions with trust licenses with certain modifications to reflect institutional differences, as specified in the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).
The Circular takes effect fifteen (15) days following its publication in the Official Gazette or in a newspaper of general circulation.
The general principles include root cause diagnosis, matching severity of enforcement to the supervisory issue, successive or simultaneous enforcement actions, monitorability and follow-through, and escalation of enforcement actions.
Yes, monetary penalties can be imposed singly or together with non-monetary sanctions if the circumstances warrant such combined action.
Sections X902, Subsection X902.1, and related appendices including Appendix 29 were amended, and references in other sections related to sanctions under R.A. 7653 were updated.
Their employer bank or quasi-bank advances the payment via automatic debit from their demand deposit account with the Bangko Sentral within fifteen (15) calendar days from notice of decision.
Subsections X902.2 of the MORB and 4902Q.2 of the MORNBFI were deleted, and certain appendices like Appendix 67 of the MORB and Q-39, T-2, and T-2a of the MORNBFI were deleted; however, guidelines under Circular No. 496 still apply to pawnshops.
The minimum (low) penalty level is P15,000 and the maximum (high) penalty level is P30,000 per violation per calendar day.