UPDATES ON BSP CIRCULARS

Cir. No. 332 dated 05.13.02 - Prescribing the rules and regulations to implement Sections 12, 13 and 14 of RA No. 8791, otherwise known as “The General Banking Law of 2000” (Stockholdings/Transfer of Shares).

Cir. Letter dated 05.15.02 - Amending Schedules 2 (Schedule of Loan Portfolio & Other Accommodations) and 3 (Schedule of Investments in Bonds & Other Debt Instruments) of the Consolidated Statement of Condition by disaggregating the transactions with Local Government Units, i.e., (1) loans extended to LGUs and (2) investments in debt instruments of LGUs, into provincial, city and municipal levels.

Cir. Letter dated 05.15.02 - Disseminating to all banks the letter of Citibank, N.A., calling the attention of all concerned about the rising incidence of fraudulent endorsements of Civilian Health and Medical Program of the Uniform Service (CHAMPUS) checks issued by Citibank, N.A., New York and drawn against Citibank N.A., Manila.

Cir. Letter dated 05.28.02 - Enjoining all banks to strictly comply with the instruction to require each borrowing Local Government Unit (LGU) to present a certificate of its debt service and borrowing capacity duly certified by the Bureau of Local Government Finance – Department of Finance (BLGF-DOF).

Cir. No. 333 dated 05.30.02 - Prescribing the rules and regulations for “Covered Institutions” and requires compliance with the provisions of R.A. 9160, otherwise known as the “Anti-Money Laundering Act of 2001” (AMLA) and its Implementing Rules and Regulations (IRRs).

Cir. Letter dated 05.31.02 - Providing the data structures and data file name (Annex 3) of the Schedule of Loan Portfolio and Other Accommodations (Borrowings of Local Government Units) and Schedule of Investments in Bonds and Other Debt Instruments (Government Issue-Local Government) required under Cir. Letter dated May 15, 2002 for purposes of reporting either through CC:Mail or in diskette form.

Cir. No. 334 dated 06.05.02 - Amending Item a of Section X202 of the MOR on Temporary Overdrawings/Drawings Against Uncollected Deposits.

Cir. No. 335 dated 06.17.02 - Amending Sections X312 and X313 of the MOR pursuant to Sec. 38 of RA 8791, The General Banking Law of 2000. (Loans and Other Credit Accommodations Secured by Chattel and Intangible Properties; Secured by Personal Properties)

Cir. Letter dated 06.20.02 - Informing banks of the approval of the conversion of the Cavite Development Bank, Inc. from a thrift bank into a rural bank, to be known as the “Cavite Rural Banking Corporation”.

Memo to All Banks dated 06.14.02 - Informing banks that the Rural Bank of Catbalogan (Western Samar), Inc. had been prohibited from doing business in the Philippines and that its assets and affairs had been placed under receivership of the PDIC.

Cir. Letter dated 06.21.02 - Reminding banks to strictly comply with the rules and regulations on Real and Other Properties Owned or Acquired (ROPOA) enumerated therein which are provided in Circular No. 306 dated January 8, 2002 (corrected copy) and Appendix 18 of the MORB.

Cir. No. 336 dated 07.02.02 - Amending Subsec. X262.3 of the MOR requiring banks to submit a statement every end of June and December certifying their compliance with Section 55.4 of RA No. 8791, which prohibits banks from employing casual, nonregular personnel or too lengthy probationary personnel in the conduct of its business involving bank deposits.

Memo to All Banks dated 07.02.02 - Requiring all banks to file with the Anti-Money Laundering Council (AMLC) the necessary reports of suspicious and covered transactions with any individual, group, organization or entity named in the Terrorist Lists issued by the US Govt. on April 25, May 8 and May 15, 2002, in accordance with Rules 5.3 and 9.3 of the Implementing Rules and Regulations of the Anti-Money Laundering Act and other related or applicable rules and regulations.

Cir. Letter dated 07.09.02 - Informing all banks that July 8, 2002 shall be considered a non-reserve day. The reserve positions as calculated at the close of business on July 5, 2002 shall be applied for purposes of determining the day’s reserve position.

Cir. No. 337 dated 07.11.02 - Amending Subsection X311.5 of the MOR by prescribing the guidelines in the redemption of mortgage on real estate property whether foreclosed judicially or extra-judicially and deleting the “amount fixed by the court in the order of execution” in determining the amount to be paid in redeeming the property.

Cir. Letter dated 07.12.02 - Revised format of Statement of Condition by banking unit for Rural Banks (RB/COB Form 3) to implement Cir. 330 dated April 29, 2002 amending the MOR to include ROPOA as part of compliance with the required loans-to-deposits ratio.

Cir. Letter dated 07.16.02 - Enjoining banks to adopt stricter policy guidelines in the acceptance of second-endorsed checks to ensure that they are not being used as instruments for money laundering or other illegal activities pursuant to Item 8 of Circular No. 251 dated July 7, 2000.

Cir. No. 338 dated 07.18.02 - Amending Section X380 of the MORB by including the “Fixed Income Exchange” as among the non-financial allied undertakings in whose equities UBs/KBs and TBs may invest.

Cir. No. 339 dated 07.18.02 - Amending Subsec. X162.9 and Section X164 of the MORB by prescribing certain guidelines in the publication of Consolidated Statement of Condition and presentation of Audited Financial Statement, respectively.

Memo to All Banks dated 07.19.02 - Informing all banks that the MB has approved to prohibit Cooperative Bank of Albay, Inc. from doing business in the Philippines and to place its assets and affairs under receivership.

Cir. Letter dated 07.29.02 - Reminding all banks that they are not allowed to use any or all of their branches as outlets for the marketing/selling of foreign-based mutual funds without prior approval of the Bangko Sentral ng Pilipinas.

Cir. No. 340 dated 07.30.02 - Rules and regulations for the establishment of branches/loan collection and disbursement points (LCDPs) of microfinance-oriented banks established under Circular No. 273 and the establishment of microfinance-oriented branches/LCDPs of banks that are not microfinance-oriented. Rural/cooperative banks shall also comply with the capitalization requirements for each branch/LCDPs to be established.

Cir. No. 341 dated 08.06.02 - Prescribing the guidelines to implement Section 56 of the General Banking Law of 2000 or Republic Act No. 8791, on determining whether a particular activity or omission may be deemed as conducting business in an unsafe or unsound manner and to impose the applicable sanctions therefor.

Memo to All Banks dated 08.06.02 - Informing all banks of the list of accredited corporate governance seminar providers.

Cir. No. 343 dated 08.08.02 - Amending Sec. X314 of the MOR by including “Housing Loans” as among the types of loans that may be granted up to 80% of the appraised value of real estate security, subject to certain conditions.

Cir. No. 345 dated 08.14.02 - Amending further Subsec. X268.1e of the MOR by providing the basis of computing the loans-to-deposits ratio to determine whether a bank qualifies for availment of the privilege of access to the credit facilities of the BSP.

Cir. No. 346 dated 08.15.02 - Amending Subsec. X151.7 of the MORB by imposing certain conditions on the relocation/transfer of banking offices outside the city or municipality where the branch/banking office to be transferred is located.

Cir. No. 347 dated 08.16.02 - Rules and regulations to implement Section 44 of the General Banking Law of 2000 by (1) adding Sec. X308 to the MORB on the amortization on loans and other credit accommodations; and (2) amending Sec. X349 of the MORB on the regulations on loans with long gestation period.

Cir. Letter dated 08.19.02 - Informing banks of the approval of the conversion of Guagua Savings Bank, Inc. from a thrift bank into a rural bank, to be known as the “Guagua Savers Bank, A Rural Bank, Inc.”.

Cir. No. 348 dated 08.20.02 - Amending the Subsections of Sec. X404 of the MORB regarding Trust, Other Fiduciary Business and Investment Management Activities.

Cir. Letter dated 08.20.02 - Enjoining all rural banks and their branches to undertake such promotional and publicity-generating activities including, but not limited to, advertisements, window and counter displays, streamers, distribution of commemorative tokens, raffles, motorcades and similar incentives and devices during the period August 25-31, 2002 to attain the highest level of public awareness to the national observance of “Rural Banking Consciousness Week (August 25-31, 2002)” and to ensure its successful observance nationwide.

Cir. No. 349 dated 08.27.02 - Amending the subsections of Sec. X319 of the MORB by renumbering Subsec. X319.6 as Subsec. X319.7; and adding X319.6 (credit card receivables) by requiring banks and their credit card companies to ascertain the capability of credit card applicants to fulfill their commitments.

Cir. Letter dated 09.04.02 - Informing banks of the approval by the Securities and Exchange Commission (SEC) of the Articles of Merger and Plan of Merger by and between the Network Rural Bank, Inc. (Surviving Corporation) and the Capitol Rural Bank of Tacurong (Sultan Kudarat), Inc. (Absorbed Corporation) which took effect on July 30, 2002.

Cir. No. 350 dated 09.10.02 - Amending Section X304 of the MORB by providing general guidelines in the grant of loans and other credit accommodations, and specific guidelines on the purpose and use thereof.

Memo to All Banks dated 09.16.02 - Informing banks of Resolution No. 132 dated Sept. 11, 2002 of the Anti-Money Laundering Council requiring the BSP (i) to disseminate to banks the United States Government’s and the Government of Italy’s list of Al Qiada/UBL-linked terrorist and terrorist-related institutions; and (ii) to direct banks and off-shore banking units to submit covered transaction reports and suspicious transaction reports involving any terrorist individual(s), organizations or groups listed therein directly to the Council.

Cir. No. 351 dated 09.19.02 - Amending Subsection X309 of the MORB on non performing loans by: (i) adding a new paragraph after item (d) and Subsection X309.1 to authorize banks to exclude from non-performing qualification, loans classified as Loss, under certain conditions, and (ii) requiring under Subsec. X309.2 banks to report certain data as additional information in the monthly Consolidated Statement of Condition.

Cir. Letter dated 09.24.02 - Clarifying the implications of the repeal of the Uniform Currency Law on regulations governing foreign exchange transactions.

Cir. Letter dated 09.25.02 - Revising the Additional Information Schedule of the CSOC for Commercial, Thrift and Rural Banks (Additional Information for RBs) by disclosing under items no. 7 total non-performing loans and 7.a Loans classified as “loss” which are fully covered by allowance for probable losses, to implement item 2 of Circular No. 351 dated Sept. 19, 2002.

Memo to All Banks dated 09.25.02 - Informing banks of Resolution No. 137 dated Sept. 25, 2002 of the Anti-Money Laundering Council requiring the BSP (i) to disseminate to banks the inclusion of Saudi Citizen Wa’El Julaidan in the UN list of Al Qaida linked individuals; and (ii) to direct banks to submit covered transaction reports and suspicious transaction reports involving Saudi Citizen Wa’El Julaidan directly to the Council.

Cir. Letter dated 09.25.02 - Informing banks of the approval by the MB of the consolidation of the Maharlika Rural Bank of Sta. Cruz (Zambales), Inc. and the Rural Bank of Infanta (Pangasinan), Inc., to be known as the “Maharlika Rural Bank, Inc.”.

Cir. Letter dated 09.26.02 - Informing banks of the approval by the SEC of the Articles and Plan of Merger by and between the Pres. Jose P. Laurel Rural Bank (Tanauan, Batangas), Inc. (Surviving Corporation) and the Rural Bank of Rosario (Batangas), Inc. (Absorbed Corporation) which took effect on August 29, 2002.

Cir. No. 352 dated 09.27.02 - Amending item (7) of Subsec. X341.3.a of the MORB providing that to consider marketing credits as agrarian reform credits, the National Food Authority (NFA) shall certify that its palay procurements are obtained through direct/indirect linkage arrangements with agrarian reform beneficiaries.

Cir. No. 353 dated 10.01.02 - Informing banks that securities backed by the unreleased Internal Revenue Allotment (IRA) of LGUs, the release of which IRA on scheduled date of payment has been certified by the DBM as not being subject to any conditionalities, eligible as (i) liquidity floor for govt. deposits; and (ii) reserve for trust and other fiduciary duties, subject to certain conditions.

Memo to All Banks dated 10.01.02 - Endorsing as a guide/reference material the paper on “Customer Due Diligence for Banks” issued by the Basel Committee on Banking Supervision in developing the banks’ Know-Your-Customer (KYC) and Anti-Money Laundering programs.

Cir. Letter dated 10.02.02 - Prescribing the revised format of the affected reports effective December 31, 2002 to include/disclose data pertaining to microfinance loans and the revision in the Manual of Accounts to include the definition of microfinance loans.

Cir. No. 354 dated 10.04.02 - Guidelines on the BSP Rediscounting Facility pursuant to Section 82 of RA 7653, The New Central Bank Act.

Cir. Letter dated 10.07.02 - Informing banks of the approval of the Articles and Plan of Merger of the Rural Bank of Camalig (Albay), Inc. (Surviving Corporation) and the Rural Bank of Virac (Catanduanes), Inc. (Absorbed Corporation) which took effect on Sept. 10, 2002.

Cir. No. 355 dated 10.09.02 - Amending the first paragraph of Subsection X240.6 of MORB (Liquidity Floor)

Cir. No. 356 dated 10.09.02 - Considering the proposed zero coupon bond issue by the Home Guaranty Corp. (HGC) of up to P7 billion 5-year regular series and up to P3 billion 7-year special series to finance its guaranty servicing of socialized and low-cost housing projects as alternative compliance with agri-agra and as reserve for trust and other fiduciary duties.

Cir. Letter dated 10.21.02 - Informing banks of the limit on number of participants to a maximum of 45 per session on seminar on Corporate Governance and Risk Management being conducted by BSP accredited seminar providers.

Cir. Letter dated 10.22.02 - Prescribing the guidelines to implement Section 1 of Circular No. 339 dated July 18, 2002 on the publication of the CSOC of a bank and its subsidiaries and affiliates.

Memo to All Banks dated 11.04.02 - Informing banks of the approval by MB to prohibit the Rural Bank of San Juan (La Union), Inc. from doing business in the Philippines and to place its assets and affairs under receivership.

Cir. No. 357 dated 11.08.02 - Amending the MORB by adding Sections 1631 and X362 and Subsections 1631.1 to 1631.8 (Financial Products of Allied Undertakings or Investment House Units of Banks), providing rules and regulations to implement Sec. 20 of R.A. No. 8791, otherwise known as General Banking Law of 2000.

Cir. Letter dated 11.13.02 - Amending the Manual of Accounts, revised reportorial requirements and other related reports (Manual of Unified Reports – General/Subsidiary Ledger) of rural/cooperative/microfinance (rural) banks to include Taxable and Non-Taxable Deposit Liabilities, Deferred Income Tax, and Restructured Loans and Development Incentive Loans. The revised reports shall be submitted starting with reports as of end March 2003.

Cir. Letters dated 11.15.02 - (Two Circular-Letters similarly dated) Revising the definitions of the housing packages under the “Socialized Housing” and “Low Cost Housing” prescribed under Circular Letter dated March 31, 1999.

Cir. No. 358 dated 11.19.02 - Accrediting all authorized agent banks (AABs) of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) as depository banks for National Government funds for the purpose of tax and customs collections, subject to certain conditions.

Cir. Letter dated 11.19.02 - Prescribing the guidelines and formats for implementing the e-mail transmission of Weekly Report on Required and Available Reserves (WRRAR) to SRSO. Banks may e-mail the WRRAR to SRSO-WRRAR@bsp.gov.ph.

Cir. Letter dated 11.27.02 - Enjoining rural, cooperative and microfinance banks to compute and pay the supervisory fees on or before January 30 of each year starting/effective 2003 and every year thereafter. Non-payment of the supervisory fee within the prescribed period shall subject the concerned bank to the sanctions prescribed under Sections 34, 35, 36 and 37 of R.A. No. 7653.

Cir. Letter dated 11.28.02 - Informing banks of the revision of Schedule D of the Consolidated Report on the Utilization of Loanable Funds Generated Which Were Set Aside for Agrarian Reform Credit/Other Agricultural Credit.

Memo To All Banks dated 11.29.02 - Informing all banks of the approval by the MB to prohibit Meycauayan Rural Bank (Bulacan), Inc. from doing business in the Philippines and to place its assets and affairs under receivership.

Cir. No. 362 dated 12.17.02 - Informing banks that the grounds for the disqualification and procedures in the watchlisting of erring directors/officers/employees of banks, quasi-banks and trust entities as provided for under Cir. No. 296 dated Sept. 17, 2001 shall also be applicable to all other institutions under BSP, except the failure to attend the required seminar for board of directors conducted or accredited by the BSP.

Cir. No. 363 dated 12.13.02 - Postponement of the implementation of the market-based pricing mechanism for rediscount loans as provided for under Circular No. 354 dated Oct. 4, 2002 for a period of one year from Oct. 4, 2002 to October 3, 2003. Reducing the regular reserve requirement to 6 percent for demand deposits, deposit substitutes, and NOW accounts of thrift banks, and for demand deposits and NOW accounts of rural/cooperative banks effective Nov. 21, 2002.