• BSP set to tighten bank reporting rules, sanctions

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    The Bangko Sentral ng Pilipinas (BSP) said it will soon release a circular intended to enhance banks’ reporting governance framework, which will impose stiffer sanctions on lenders who fail to submit timely and complete banking data necessary for policy making.

    The Bangko Sentral ng Pilipinas building along Roxas Blvd. PHOTO FROM THE BSP

    Incoming central bank Governor Nestor Espenilla Jr. cited the importance of banking industry data as the foundation of policy making by monetary authorities.

    Naming some of such essential data, Espenilla said the central bank regularly monitors banks’ financial statements, performance indicators such as capital adequacy and non-performing loan ratios, mandated credit on micro, small and medium enterprises and agriculture-agrarian reform credit, loan accounts, deposit accounts and physical networks.

    “I guess maybe there are some banks who don’t appreciate the importance of the data, others are really challenged to produce high-quality data. [Still,] others feel they can just pay the penalty,” he said.

    To address this, Espenilla said the new circular on reporting governance will lay down the framework for improved preparation and submission of supervision reports to the Bangko Sentral.

    “That’s going to be issued already, and that’s already approved by the Monetary Board,” he said.

    The circular will make it very clear who is responsible for data reporting, to make sure that the data submitted to the central bank is accurate and in accordance with the requirements of the BSP, he explained.

    “It will also lay down the obligations of banks, such as, to report in a timely manner. And what are the sanctions? [for instance]If you continuously fail to meet the reporting timelines… that creates more sanctions,” he said.

    “This one basically means if you keep doing it, you’re not just looking at a penalty but other kinds of sanctions, including holding accountable individual officers, or suspension or disqualification if it [the offense]is really persistent and seemingly intentional,” Espenilla added.

    The new reporting governance circular due for release soon is in line with the central bank’s thrust to pursue reforms on corporate governance standards for the banking industry, an essential ingredient to ensuring stability in the financial system.

    The Bangko Sentral said it will continue to craft banking regulations that are “responsive, consistent with best practices and in line with the international financial architecture reform agenda.”

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