QuestionsQuestions (BSP CIRCULAR NO. 1281)
It revises the rules governing the establishment and relocation of branches of commercial and thrift banks to liberalize those rules.
Franchises to establish branches may be bid out by the Central Bank; banks meeting prequalification requirements may be invited to participate.
Thrift banks with head offices outside Metro Manila shall not be allowed to bid for franchises in service areas in Metro Manila.
It is generally awarded to the highest bidder; however, if the bid submitted by a bank with no existing branch/banking office in the relevant service area is at least 90% of the highest bid, the franchise is awarded to that bank.
National Capital Region, Cebu City and Davao City: P4.0 million; 1st Class Cities and 1st Class Municipalities: P2.0 million; Other Areas: None.
30% within seven (7) calendar days from receipt of notice of award, and the remaining 70% within twenty (20) calendar days from payment of the 30%.
The approved bids are considered revoked; the 30% down payment is forfeited in favor of the Central Bank upon failure to pay the balance of 70% within the period.
No. The circular expressly states that a bank shall in no case sell/assign its privilege to establish branches covered by approved bids.
It shall not exceed ten (10) for each bank at any given time; if more than ten bids are submitted, the bank must indicate its priorities.
A bank is not allowed to bid if it has three (3) existing branches in the service area, or if the combined deposits of its branches there constitute 20% of the combined average deposits of all bank branches in the area for the last 12 months prior to the bidding.
No bidding is required; applications are submitted to the Central Bank and processed on a first come, first served basis.
A certified true copy of the board resolution, banking facilities/services to be offered, projected statement of condition for first and second semesters, estimated earnings and expenses for first 12 months, organizational setup (positions), and bank premises and initial outlay.
Total deposits in the service area divided by the break-even level equals the maximum number of branches allowed.
The break-even level sets the deposit threshold per branch. The maximum number minus the actual number of existing branches gives the additional number of branches that may be bidded out.
NCR/Cebu/Davao: P50.0 million; 1st class cities/municipalities: P35.0 million; 2nd & 3rd class cities/2nd class municipalities: P20.0 million; Other Areas: None.
If, in the latest examination, it has specified exceptions/violations under RA 337 (e.g., equity investments beyond ceilings, loans beyond single borrowers’ limits, bank premises beyond ceilings, certain loan deficiencies/excesses) or unsound/unsafe practices such as unauthorized loan releases, non-compliance with approval terms, and loans released before complete documentation—until corrected.
Only within the same service area where the branch is presently located, subject to an exception allowing transfers/relocations to another service area immediately adjacent to the current one.
No. The circular provides that no branch/banking office shall be closed without prior approval of the Central Bank.