Amendments to MORB (Manual of Regulations for Banks)
- Section X902 amended to regulate payment of monetary penalties and other charges.
- Subsection X902.1 establishes policy for imposing monetary penalties.
- Monetary penalties serve to hold BSFIs and their DTOs accountable and deter violations.
- Penalties relate to severity of violation, impact on financial condition, and follow a progressive enforcement approach.
Monetary Penalty Imposition Guidelines
- Monetary penalties are prescribed by laws or Bangko Sentral regulations; absent specific penalties, maximum of PHP 30,000 per calendar day per violation can be imposed.
- Penalty rates depend on asset size with defined lower and higher penalty levels.
- Higher penalty rates may be applied for serious offenses considering harm caused, seriousness, intentionality, and frequency.
- Penalties must not impair BSFI operations, liquidity, or capitalization.
- Penalties may be set equivalent to gains derived or losses avoided by the violator.
- Supervising department notifies violators and provides 15 banking days to respond.
- Governor or Monetary Board approves penalty impositions; decisions are communicated to violators.
- Monetary penalties may be combined with non-monetary sanctions.
Appeal and Payment Procedures
- Violators can file a request for reconsideration within 15 calendar days after penalty decision communication.
- Appeals from Governor's decision on reconsideration go to the Monetary Board.
- Payment of penalties is due within 15 calendar days after notice of final decision.
- Unpaid penalties by banks are debited automatically from their Bangko Sentral demand deposit accounts.
- Employers advance payment for directors/officers; if no longer employed, violators pay directly.
- Late payments incur a 6% per annum charge from due date until payment.
Application to Non-Bank Financial Institutions (NBFIs)
- The above provisions extend to QBs, NSSLAs, and other NBFIs with trust licenses.
- Corresponding amendments in Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) ensure consistency.
- Terminology adapted (e.g., "trustees" instead of "directors").
- Monetary penalties for QBs approved only by Monetary Board.
- Payment and procedural guidelines conform to MORNBFI provisions with reference to specific appendices.
Procedural Guidelines for Payment
- Employer institutions are notified and required to advance penalty payments on behalf of DTOs within 15 calendar days.
- If DTOs have left the institution, they must directly pay penalties to Bangko Sentral.
- Uniform procedures for payment ensure consistency across banks and non-bank institutions.
Deletions and Amendments of Related Provisions
- Specific subsections in MORB and MORNBFI related to monetary penalties are deleted or amended for consistency.
- Sections referencing monetary penalties cite the proper legal provisions and enforcement policies.
- Certain appendices in MORB and MORNBFI are deleted; however, existing guidelines for pawnshops remain applicable.
- Corresponding textual references in regulations are updated or removed accordingly.
Effectivity
- Guidelines take effect 15 days after publication in the Official Gazette or a newspaper of general circulation.
Important Legal Concepts
- Monetary penalties serve as administrative sanctions under the supervisory enforcement policy.
- Enforcement actions are calibrated according to the financial condition of the institution and seriousness of violation.
- Due process is ensured through notification, explanation opportunity, and appeal mechanisms.
- The system ensures accountability and sound governance within BSFIs and enhances regulatory compliance.