BSP relaxes rules on confirmation of bank directors, officers

The Bangko Sentral ng Pilipinas (BSP) has relaxed the rules on the confirmation of the appointment of directors, trustees and officers of Philippine banks.

BSP Governor Benjamin Diokno said the Monetary Board has issued Resolution 159 approving the amendments to the provisions of the Manual of Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).

“The amendments aim to limit the coverage of BSP confirmation of appointment of officers of BSP-supervised financial institutions and to streamline the documentary requirements in the confirmation of election and appointment of directors, trustees, and officers,” Diokno stated in Circular 1136.

Under the new guidelines, the Monetary Board needs to confirm the election or appointment of the president or its equivalent rank of universal and commercial banks, including their subsidiaries, quasi-banks, trust corporations, non-bank financial institutions (NBFIs) with trust authority, as well as stand-alone banks with total assets of P10 billion.

On the other hand, the Financial Supervision Sector (FSS) committee of the BSP confirms the election and appointment of director, CEO and president or its equivalent rank of other stand-alone banks, quasi-banks, and NBFIs with total assets and assets under management of less than P10 billion.

Likewise, the committee needs to confirm the appointment of heads of comptrollership or finance, lending, treasury, and bank branching directly reporting to the president or CEO, with a rank of senior vice president and up of big banks.

Furthermore, the FSS committee needs to confirm the appointment of heads of control functions and internal audit, risk management and compliance, regardless of rank of all banks and other financial institutions.

However, the confirmation is no longer required if the directors or officers have been previously confirmed by the Monetary Board or the FSS committee since January 2011.

It also said BSP-supervised financial institutions need to submit a bio-data with ID picture of their directors and officers who are subject to confirmation upon every election, re-election, appointment, and promotion within 20 days from the date of the meeting of the board of directors.

For senior vice president and up positions that no longer require BSP confirmation, banks and financial institutions should continue to submit to the BSP the bio-data and ID pictures within 20 days from the date of appointment.

The BSP is also now requiring a secretary’s certificate attesting for a director or an officer holding concurrent positions in government or government-owned and controlled corporations (GOCCs) allowing him or her to become a director of the BSFI.

Likewise, a secretary’s certificate is needed that the corresponding Alien Employment Permit issued by the Department of Labor and Employment (DOLE) was secured for foreigners appointed as officers.

As of May last year, the regulator blacklisted 7,500 dismissed officers and employees of banks, as it continues to tighten the industry’s hiring protocols and control measures by weeding out unprincipled personnel who may cause reputational risk to a bank and to the financial system.

The BSP earlier said robust know-your-employee (KYE) procedures foster a stable banking system through good corporate governance and strict human resources-related practices, as well as tighter controls related to confirmation of accounts.