Law Summary
1. Amendment Overview
This Circular amends the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) and the Manual of Regulations for Banks (MORB) concerning reporting requirements for the write-off of loans and other financial assets.
- Date Adopted: January 10, 2012
- Date Filed: January 26, 2012
- Resolution Reference: Monetary Board Resolution No. 1952 dated December 27, 2011
2. Reporting Requirements for Write-offs
The Circular revises the requirements for notifying the appropriate department of the write-off of loans and credit accommodations.
- Submission Deadline: Notice of write-off must be submitted within thirty (30) business days after each write-off.
- Required Documentation:
- A sworn statement from the President or equivalent officer confirming that the write-off does not involve transactions with Directors, Officers, Stockholders and Related Interests (DOSRI).
- A copy of the Board Resolution approving the write-off.
3. Verification Process
Write-offs are subject to verification during examinations to ensure compliance.
- Verification: The write-offs on loans, credit accommodations, and other assets will be reviewed during regulatory examinations.
4. Appendices Amendments
Significant amendments are made to the appendices related to reporting requirements.
- Appendix Q-3 (MORNBFI): The deadline for submitting the Notice/Application for write-off is revised to within thirty (30) business days.
- Appendix 6 (MORB): Similar amendment applies, with submission required within thirty (30) banking days.
5. Effective Date
The Circular will take effect fifteen (15) calendar days after publication in the Official Gazette or a newspaper of general circulation.
Key Takeaways
- Amendments: The Circular updates reporting requirements for loan write-offs in both MORNBFI and MORB.
- Documentation: Strict documentation and sworn statements are required to validate the write-offs.
- Deadlines: Notices must be submitted within specified timeframes to ensure compliance.
- Verification: Write-offs will be subject to regulatory scrutiny during examinations.
- Effective Upon Publication: The changes take effect shortly after formal publication.
This summary outlines the key provisions and procedural requirements established by BSP Circular No. 745, emphasizing the importance of compliance with the revised reporting standards for financial institutions.