[ BSP CIRCULAR NO. 1390, s. 1993, May 19, 1993 ]
GUIDELINES TO GOVERN THE ESTABLISHMENT AND RELOCATION/VOLUNTARY CLOSURE OF BRANCHES AND OTHER BANKING OFFICES OF COMMERCIAL BANKS AND THRIFT BANKS
The Monetary Board, in its Resolution No. 349, dated 23 April 1993, as amended by its Resolution No. 369, dated 7 May 1993, approved the guidelines to govern the establishment and relocation/voluntary closure of branches and other banking offices of commercial banks and thrift banks. Accordingly, the Manual of Regulations for Banks and Other Financial Intermediaries, is hereby amended as follows:
SECTION 1. The provisions of Subsecs. 1151.1 to 1151.9 (Book I) and 2151.1 to 2151.10 (Book II) of the Manual of Regulations are hereby repealed/amended to read as follows:
151.1 Monetary Board Approval - Pursuant to Section 6-B of R.A. No. 337, as amended, no bank operating in the Philippines shall establish, open, or operate banking offices, or transact business outside the premises of its duly authorized principal office without the prior approval of the Monetary Board/Governor.
151.2 Application for Authority to Establish Banking Offices - An application for authority to establish banking offices shall be signed by the President of the Bank and shall be accompanied, as a minimum, by the following information/documents:
1. Certified true copy of the resolution of the bank's board of directors authorizing the establishment of the additional banking office and indicating its proposed site;
2. Banking facilities and services to be offered;
3. Organizational set up of the proposed banking office showing the proposed positions, and the names, qualifications, and experience of the proposed manager and other officers; and
4. Certification signed by the President or the Executive Vice President that the bank has complied with all the requirements enumerated under Subsec. 151.3.
151.3 Requirements for Establishing Banking Offices -
1. The bank has complied with the minimum capital requirement;
2. The bank's networth to risk assets ratio has not been deficient for five or more times within a thirty (30) day period during the last twelve (12) months immediately preceding the date of application;
3. In the case of thrift banks with head offices outside of the National Capital Region (NCR), it may establish a branch in the NCR only after it has put up the minimum capital requirement for a new thrift bank in the NCR;
4. For each branch to be established by a commercial bank and a thrift bank, an additional capital shall be put up as follows;
6. The bank has not incurred chronic deficiency in its reserves against deposit liabilities and deposit substitutes during the last twelve (12) months immediately preceding the date of application;
7. The bank has complied with the investment-deposit ratio for four (4) consecutive quarters immediately preceding the date of application;
8. The bank does not have float items outstanding for more than sixty (60) calendar days in the "Due From/To Head Office/Branches/Offices" accounts and the "Due From Central Bank" account exceeding one per cent (1%) of the total resources as of date of application;
9. The bank's total past due loans does not exceed 20% of total loan portfolio as of date of application;
10. The bank has complied with the ceilings on credit accommodations to directors, officers, and/or stockholders during the last twelve (12) months immediately preceding the date of application;
11. The bank has not been found by the Monetary Board to have conducted business in an unsafe or unsound manner during the last twelve (12) months immediately preceding the date of application; and
12. The bank has corrected as of date of application the violations noted in its latest examination related to the following:
1. A written notice to the appropriate supervising and examining department of the Central Bank of the actual date of opening not later than five (5) banking days from such opening; and
2. A certification signed by the officer in-charge of the Branches Department with the rank of a Vice President or its equivalent or by a higher officer, that the requirements enumerated under Subsec. 151.3 have been complied with up to the time of actual opening.
151.5 Relocation/Transfer of Banking Offices - Transfer of banking offices shall only be allowed within the same city or municipality where the branch to be transferred is located and such transfer shall not require prior Central Bank approval but shall be subject to the following conditions:
1. Notice of transfer to depositors and other creditors by registered mail and posters in conspicuous place in the premises of the banking office to be transferred at least three (3) months prior to the transfer;
2. The appropriate supervising and examining department of the Central Bank shall be notified in writing not later than five (5) banking days from the date of transfer. The notification shall be accompanied by a certified true copy of the resolution of the bank's board of directors authorizing the transfer.
3. A certification signed by the officer in-charge of the Branches Department with the rank of Vice President or its equivalent or by a higher ranking officer, that the above requirements have been complied with.
151.6 Voluntary Closure of Banking Offices - Voluntary closure of banking offices may be effected only with prior approval of the Central Bank and shall be subject to the following conditions:
1. Notice of closure to depositors and other creditors by registered mail and posters in conspicuous place in the premises of the banking office to be closed at least three (3) months prior to the closure;
2. The appropriate supervising and examining department of the Central Bank shall be notified in writing not later than five (5) banking days from the date of closure. The notification shall be accompanied by a certified true copy of the resolution of the bank's board of directors authorizing the closure.
3. A certification signed by the officer in-charge of the Branches Department with the rank of Vice-President or its equivalent or by a higher ranking officer, that the above requirements have been complied with.
151.7 Sanctions - If any part of the certification submitted by the bank as required in these guidelines is found to be false, the following sanctions shall be imposed:
1. On the Bank - Suspension for one (1) year of the privilege to establish and/or to open approved banking offices.
2. On the Certifying Officer - A fine of P5,000.00 per day from the time the certification was made up to the time the certification was found to be false for each banking offices opened, transferred, or closed.
SECTION 2. The provisions of Section 1154 (Book I) and 2154 (Book II) of the Manual of Regulations on transfer or relocation of banking offices are hereby repealed.
This Circular shall take effect immediately.
Adopted: 19 May 1993
(Sgd.) ANDRE NAVATO
Officer-in-Charge
SECTION 1. The provisions of Subsecs. 1151.1 to 1151.9 (Book I) and 2151.1 to 2151.10 (Book II) of the Manual of Regulations are hereby repealed/amended to read as follows:
151.1 Monetary Board Approval - Pursuant to Section 6-B of R.A. No. 337, as amended, no bank operating in the Philippines shall establish, open, or operate banking offices, or transact business outside the premises of its duly authorized principal office without the prior approval of the Monetary Board/Governor.
151.2 Application for Authority to Establish Banking Offices - An application for authority to establish banking offices shall be signed by the President of the Bank and shall be accompanied, as a minimum, by the following information/documents:
1. Certified true copy of the resolution of the bank's board of directors authorizing the establishment of the additional banking office and indicating its proposed site;
2. Banking facilities and services to be offered;
3. Organizational set up of the proposed banking office showing the proposed positions, and the names, qualifications, and experience of the proposed manager and other officers; and
4. Certification signed by the President or the Executive Vice President that the bank has complied with all the requirements enumerated under Subsec. 151.3.
151.3 Requirements for Establishing Banking Offices -
1. The bank has complied with the minimum capital requirement;
2. The bank's networth to risk assets ratio has not been deficient for five or more times within a thirty (30) day period during the last twelve (12) months immediately preceding the date of application;
3. In the case of thrift banks with head offices outside of the National Capital Region (NCR), it may establish a branch in the NCR only after it has put up the minimum capital requirement for a new thrift bank in the NCR;
4. For each branch to be established by a commercial bank and a thrift bank, an additional capital shall be put up as follows;
In implementing the above, the following guidelines shall be observed:
of Cebu and Davao
if the capital of the bank is less than an amount equal to the following:
a. For commercial banks - P20 million times the number of existing and proposed additional branches located/to be located in the NCR and the cities of Cebu and Davao plus P10 million times the number of existing and proposed additional branches located/to be located in other areas.
b. For thrift banks - P10 million times the number of existing and proposed additional branches located/to be located in the NCR and the cities of Cebu and Davao plus P5 million times the number of branches located/to be located in other areas.
- Where the capital of the bank is lower than an amount equal to the sum of (1) P20 million times the number of existing branch/es in the NCR and the cities of Cebu and Davao; and (2) P10 million times the number of existing branch/es outside of such areas in the case of commercial banks or to an amount equal to the sum of (3) P10 million times the number of existing branch/es in the NCR and the cities of Cebu and Davao; and (4) P5 million times the number of existing branch/es outside of such areas in the case of thrift banks, such bank shall not be allowed to branch out until its capital is increased at least to the sum of (1) and (2) above for commercial banks and the sum of (3) and (4) for thrift banks; and
- Where the capital of a commercial or thrift bank is greater than the sum of Item a (1) and (2) above and Item a (3) and (4) above respectively, such bank need not put up additional capital for each additional branch to be established if the excess is greater than P20 million, P10 million, and P5 million, as the case may be, depending on the proposed site of the additional branch. Where such excess is less than P20 million, P10 million, or P5 million, as the case may be, only an amount to cover the deficiency shall be required to be put up as additional capital for the establishment of an additional branch.
6. The bank has not incurred chronic deficiency in its reserves against deposit liabilities and deposit substitutes during the last twelve (12) months immediately preceding the date of application;
7. The bank has complied with the investment-deposit ratio for four (4) consecutive quarters immediately preceding the date of application;
8. The bank does not have float items outstanding for more than sixty (60) calendar days in the "Due From/To Head Office/Branches/Offices" accounts and the "Due From Central Bank" account exceeding one per cent (1%) of the total resources as of date of application;
9. The bank's total past due loans does not exceed 20% of total loan portfolio as of date of application;
10. The bank has complied with the ceilings on credit accommodations to directors, officers, and/or stockholders during the last twelve (12) months immediately preceding the date of application;
11. The bank has not been found by the Monetary Board to have conducted business in an unsafe or unsound manner during the last twelve (12) months immediately preceding the date of application; and
12. The bank has corrected as of date of application the violations noted in its latest examination related to the following:
- Single borrower's loan limit; and
- Investment in bank premises and other fixed assets.
1. A written notice to the appropriate supervising and examining department of the Central Bank of the actual date of opening not later than five (5) banking days from such opening; and
2. A certification signed by the officer in-charge of the Branches Department with the rank of a Vice President or its equivalent or by a higher officer, that the requirements enumerated under Subsec. 151.3 have been complied with up to the time of actual opening.
151.5 Relocation/Transfer of Banking Offices - Transfer of banking offices shall only be allowed within the same city or municipality where the branch to be transferred is located and such transfer shall not require prior Central Bank approval but shall be subject to the following conditions:
1. Notice of transfer to depositors and other creditors by registered mail and posters in conspicuous place in the premises of the banking office to be transferred at least three (3) months prior to the transfer;
2. The appropriate supervising and examining department of the Central Bank shall be notified in writing not later than five (5) banking days from the date of transfer. The notification shall be accompanied by a certified true copy of the resolution of the bank's board of directors authorizing the transfer.
3. A certification signed by the officer in-charge of the Branches Department with the rank of Vice President or its equivalent or by a higher ranking officer, that the above requirements have been complied with.
151.6 Voluntary Closure of Banking Offices - Voluntary closure of banking offices may be effected only with prior approval of the Central Bank and shall be subject to the following conditions:
1. Notice of closure to depositors and other creditors by registered mail and posters in conspicuous place in the premises of the banking office to be closed at least three (3) months prior to the closure;
2. The appropriate supervising and examining department of the Central Bank shall be notified in writing not later than five (5) banking days from the date of closure. The notification shall be accompanied by a certified true copy of the resolution of the bank's board of directors authorizing the closure.
3. A certification signed by the officer in-charge of the Branches Department with the rank of Vice-President or its equivalent or by a higher ranking officer, that the above requirements have been complied with.
151.7 Sanctions - If any part of the certification submitted by the bank as required in these guidelines is found to be false, the following sanctions shall be imposed:
1. On the Bank - Suspension for one (1) year of the privilege to establish and/or to open approved banking offices.
2. On the Certifying Officer - A fine of P5,000.00 per day from the time the certification was made up to the time the certification was found to be false for each banking offices opened, transferred, or closed.
SECTION 2. The provisions of Section 1154 (Book I) and 2154 (Book II) of the Manual of Regulations on transfer or relocation of banking offices are hereby repealed.
This Circular shall take effect immediately.
Adopted: 19 May 1993
Officer-in-Charge