The central bank will require banks to have in place a continuity plan to ensure that the public will be served in times of natural calamities.
“The Monetary Board approved the business continuity management circular,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. said.
The new circular prescribes the standards to make sure that banks are resilient to typhoons and other natural disasters.
“You know our country is a disaster-prone country, so we have to be ready for those things. Basically, they have to put in place disaster contingency plans – not just how to deal with it but also, if it happens, they can basically get back on their feet as soon as possible,” he said.
“So banks need to prepare for those, so that when such things happen they can be up for business within hours if possible. So it sets standards,” the BSP official said.
While banks may not be able to comply with the requirement overnight, Espenilla said it actually gets the lenders to plan ahead and develop the processes that will help them recover and resume operations as soon as possible.
“As I said, it’s not going to happen overnight. First, we prescribe the standards and then we will engage the banks in terms of what their plans are. So we’re going to go about it systematically,” he said.
Even if a bank has a continuity plan in place, Espenilla clarified that the BSP will be ready to provide banks affected by natural disasters with regulatory relief.
“That’s always available. But relief is one thing. But banks still actually need to open their doors for business,” he said.
The central bank usually grants regulatory and rediscounting relief to banks and non-bank financial institutions with quasi-banking functions that have head offices or branches in areas affected natural disasters.