Banks have until the end of 2017 to make necessary changes in systems and processes and comply with the central bank’s stiffer rules on reporting standards.
In a statement on Wednesday, the Bangko Sentral ng Pilipinas (BSP) said the Monetary Board approved a circular setting forth expectations on banks to establish an effective reporting system that will enable them to comply with the Bangko Sentral reporting standards.
“Full implementation of the Circular will take effect beginning 1 January 2018,” it said.
The BSP said it recognizes that accurate and timely information facilitates the proper conduct of monetary policy and effective banking supervision. Such quality information also enables banks to make better informed business decisions.
Once the circular is in place, the central bank expects lenders to ensure that reports to the Bangko Sentral are complete, accurate, consistent, reliable and timely, which should be done independent of any validation process that the central bank may conduct prior to accepting a report as compliant with the standards.
An effective governance process over the reporting system must be established by the bank’s board of directors, the central bank noted.
“These include written policies and procedures as well as defined processes for periodic review, enhancements, and reporting to its Board and Senior Management. This should be supported by a management information system and technology infrastructure that is commensurate to the bank’s level of activity and complexity,” it said.
In cases of non-compliance with the reporting standards, the circular will introduce a combination of enforcement actions that are intended to bring about an improvement in the bank’s behavior.
“In addition to rationalizing the monetary penalties currently being imposed on banks, non-monetary sanctions for habitual incurrence of reporting violations as determined through a demerit system were also introduced,” the central bank said.
Formal corrective measures may also be required to be undertaken by the bank should there be significant deficiencies noted during the assessment of its reporting system, it said.