BSP Circular No. 176-98

September 7, 1998 BSP CIRCULAR NO. 176-98 Pursuant to Monetary Board Resolution No. 1266 dated September 2, 1998, the following sanctions for non-compliance with minimum capital requirements are hereby prescribed: Monetary Penalty : For delayed or non-submission of the capital build-up program reckoned from the time the bank was notified in writing up to the time program has been submitted per banking day of delay, a monetary penalty of: lexli b Type of Bank Amount of Penalty Expanded & Non-Expanded Commercial Banks P10,000.00 Thrift Banks P5,000.00 Rural Banks P1,000.00 Non-Monetary Penalty : Non-monetary penalties shall depend on the degree of capital deficiency incurred by the bank, as follows: For COMMERCIAL BANKS : % of Capital Deficiency Penalty Up to 20% Suspension of authority to invest in non-allied undertakings (for EKBs only) Suspension of authority to invest in allied undertakings Suspension of securities and dealership functions (for EKBs only) Suspension of branching privileges Suspension of declaration of cash dividends Up to 40% Suspension of authority to invest in non-allied undertakings (for EKBs only) Suspension of authority to invest in allied undertakings Suspension of securities and dealership functions (for EKBs only) Suspension of branching privileges Suspension of declaration of cash dividends Restrictions on overall loan growth/investments (new loans to the extent of collections only) Restrictions on lending affiliates Denial of access to BSP rediscounting facilities Suspension of authority to accept or handle government deposits Up to 60% Suspension of authority to invest in non-allied undertakings (for EKBs only) Suspension of authority to invest in allied undertakings Suspension of securities and dealership functions (for EKBs only) Suspension of branching privileges Suspension of declaration of cash dividends Restrictions on overall loan growth/investments (new loans to the extent of collections only) Restrictions on lending affiliates Denial of access to BSP rediscounting facilities Suspension of authority to accept or handle government deposits Suspension of authority to engage in quasi-banking activities Suspension of authority to engage in derivative activities Suspension of FCDU/EFCDU activities Suspension of trust operations Up to 80% Suspension of authority to invest in non-allied undertakings (for EKBs only) Suspension of authority to invest in allied undertakings Suspension of securities and dealership functions (for EKBs only) Suspension of branching privileges Suspension of declaration of cash dividends Denial of access to BSP rediscounting facilities Suspension of authority to accept or handle government deposits Suspension of authority to engage in quasi-banking activities Suspension of authority to engage in derivative activities Suspension of FCDU/EFCDU activities Suspension of trust operations Suspension of international banking activities Suspension of lending activities More than 80% Suspension of clearing privileges Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws Cease and desist cd Up to 20% Suspension of branching privileges Suspension of declaration of cash dividends Up to 40% Suspension of branching privileges Suspension of declaration of cash dividends Restrictions on overall loan growth/investments (new loans to the extent of collections only) Restrictions on lending to affiliates Denial of access to BSP rediscounting facilities Suspension of authority to accept or create demand deposits or operate NOW accounts Suspension of authority to accept government deposits Up to 60% Suspension of branching privileges Suspension of declaration of cash dividends Restrictions on overall loan growth/investments (new loans to the extent of collections only) Restrictions on lending to affiliates Denial of access to BSP rediscounting facilities Suspension of authority to accept or create demand deposits or operate NOW accounts Suspension of authority to accept government deposits Suspension of authority to engage in quasi-banking activities Suspension of FCDU activities Suspension of authority to invest in allied undertakings Suspension of trust operations Up to 80% Suspension of branching privileges Suspension of declaration of cash dividends Denial of access to BSP rediscounting facilities Suspension of authority to accept or create demand deposits or operate NOW accounts Suspension of authority to accept government deposits Suspension of authority to engage in quasi-banking activities Suspension of FCDU activities Suspension of authority to invest in allied undertakings Suspension of trust operations Suspension of lending activities Suspension of issuance of domestic LCs More than 80% Suspension of clearing privileges Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws Cease and desist For RURAL BANKS : % of Capital Deficiency Penalty Up to 20 % F Suspension of branching privileges Suspension of declaration of cash dividends Up to 40% Suspension of branching privileges Suspension of declaration of cash dividends Restrictions on overall loan growth/investments (new loans to the extent of collections only) Denial of access to BSP rediscounting facilities Suspension of authority to accept or create demand deposits or operate NOW accounts aisadc Suspension of authority to accept government deposits Up to 60% Suspension of branching privileges Suspension of declaration of cash dividends Restrictions on overall loan growth/investments (new loans to the extent of collections only) Denial of access to BSP rediscounting facilities Suspension of authority to accept or create demand deposits or operate NOW accounts Suspension of authority to accept government deposits Suspension of authority to invest in allied undertakings Up to 80% Suspension of branching privileges Suspension of declaration of cash dividends Denial of access to BSP rediscounting facilities Suspension of authority to accept or create demand deposits or operate NOW accounts Suspension of authority to accept government deposits Suspension of authority to invest in allied undertakings Suspension of lending/investment activities More than 80% Suspension of clearing privileges Suspension of granting of bonuses/profit-sharing not covered by existing contracts or By-Laws Cease and desist This Circular shall take effect immediately. FOR THE MONETARY BOARD: (SGD.) GABRIEL C. SINGSON Governor