Bank corporate term expiry and extension policy

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BSP MEMORANDUM NO. M-2012-009: Bank corporate term expiry and extension policy

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Title Supreme Court: Bank corporate term expiry and extension policy

Law: Bsp Memorandum No. M-2012-009

Decision Date: Feb 16, 2012

Banks must initiate the extension of their corporate terms at least five years before expiration to avoid revocation of licenses and potential receivership, as mandated by the Bangko Sentral ng Pilipinas.

corporate franchise

banking license

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Obligation to Extend Corporate Term

Banks are mandated to initiate the extension of their corporate term well in advance of expiration.
Timely extension is crucial to maintain continuous authority to operate and secure other necessary licenses.

Procedure for Corporate Term Extension

Pursuant to Section 11 of the Corporation Code, an amendment to the Articles of Incorporation extending the corporate term must be filed.
This filing can be done as early as five (5) years before the expiration of the corporate term.

Role of the Bangko Sentral ng Pilipinas (BSP)

The BSP must provide a favorable endorsement or recommendation before a bank may file for an extension of corporate term with the Securities and Exchange Commission (SEC).
Banks may secure this endorsement up to five (5) years prior to the expiry of their corporate term.

Securities and Exchange Commission (SEC) Requirements

The SEC will only process and consider the application for corporate term extension if it is accompanied by the BSP's favorable endorsement.

Practical Reminder and Legal Implications

Banks must ensure compliance with these procedural requirements to avoid automatic loss of license and possible receivership.
This memorandum serves as an official guidance to banks to observe timely compliance with the corporate term extension process to secure their continued lawful operation.

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