Key Prohibition on Penalties
- No liquidated damages of 3% per month shall be imposed on unpaid overnight clearing line availments on the next clearing day.
- Deletion of paragraph c of Section 4 of the previous Circular-Letter (dated September 3, 1998) which contained provisions on liquidated damages.
Amendment to Section 4 on Availments Against Approved Loan Line
- Section 4 amended to define the availing process and payment requirements:
- (a) Electronic notice from BSP Accounting Department serves as the formal availing notification.
- Upon receipt, the Debt Liquidation Committee (DLC) must immediately post the loan transaction to the bank's loan ledger.
- (b) Each availment must be fully paid by automatic debit from the bank’s demand deposit account with BSP on the next clearing day without the need to issue a demand.
Operational Procedures
- Electronic notification constitutes automatic and formal availing request.
- DLC's immediate posting ensures accurate loan accounting.
- Automatic debit ensures prompt payment compliance and removes the need for demand issuance.
Effective Date and Authority
- Circular-Letter takes effect retroactively from April 28, 2000.
- Issued by Officer-In-Charge Armand L. Suratos under Monetary Board Resolution No. 1230 dated July 21, 2000.
Important Legal Concepts
- Eliminates the imposition of penalties on overnight clearing line availments that remain unpaid the next clearing day.
- Streamlines the loan availment and settlement process with automated mechanisms.
- Reflects BSP’s intent to ease bank operations and foster liquidity management without punitive interest for short-term unpaid clearing lines.