Banks sanctioned by P859M from 2018 to 2020

Benjamin E. Diokno, Governor of Bangko Sentral ng Philippines – BLOOMBERG

THE CENTRAL BANK slapped Fines worth 859 million pesos on Fifinancial institutions from 2018 to 2020, with non-compliance with mandatory credit quotas among the main violations, said the governor of Bangko Sentral ng Pilipinas (BSP), Benjamin E. Diokno on Thursday.

“The main violations include failure to meet BSP issuance on mandatory credit and other BSP regulatory requirements,” Mr. Diokno said in an online brief.Fing.

Of the 859 million P in penalties, 7.2 million P were imposed on the directors, trustees, offisupervised cers or BSP employees Fifinancial institutions, he said.

In the FiIn the first quarter, banks lent 765.92 billion pesos to the agriculture and land reform sectors, equivalent to only 10.59% of their loanable funds. This figure was lower than the 25% prescribed by Republic Law 10,000 or the Agri-Agra Reform Credit Law of 2009, of which 10% must go to the land reform sector and 15% to the agricultural sector.

Meanwhile, lenders provided loans worth 448.458 billion pesos to micro, small and medium enterprises (MSMEs) during the same period, which represented only 5.24% of their total portfolio of ready. This figure was lower than the 10% mandated by Republic Law 6977 or Magna Carta for MSMEs, under which banks should allocate 8% of their loan portfolio to micro and small enterprises and 2% to medium enterprises.

The central bank said Financial institutions and their offiCitizens can explain their point of view and present supporting evidence to challenge the fines imposed on them.

“Violation of laws, rules and regulations leads to security and soundness issues and is rooted in issues of governance, oversight and management of companies or financial institutions supervised by BSP,” Mr. Diokno said.

“Sound governance practices promote the stability of the Philippine banking system,” he added.

In August, the BSP also released updated guidelines on fines for bank transactional violations against lenders, aligned with the provisions of Republic Law 11211 or the new Central Bank Law, as amended. .

BSP Director for Financial Supervision Department IX Dindo R. Santos said a tougher sanction regime for banks for their implementation of anti-money laundering (AML) measures could help the country to get off the “gray list” of the Financial Action Task Force (FATF).

“The system aims to modify behavior so that the supervised BSP Fifinancial institutions and administrators and officers can manage the bank in a prudent way, ”Mr. Santos said in the same brieFing.

“This will [help us] achieve in terms of compliance with AML standards and the requirement, this will help us get off the list, ”he added.

In June, the country was included in the gray list of the FATF or jurisdictions under increased scrutiny for their implementation of stricter rules in the fight against money laundering and the financing of terrorism.

Mr Diokno, who is also the chairman of the Anti-Money Laundering Council, said they expected the country to be removed from the gray list by January 2023. LWTN

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