BSP expands penalty system, imposes higher sanctions

The Bangko Sentral ng Pilipinas (BSP) on Thursday announced adjustments in the monetary penalty framework, widening its scope and increasing penalties for violations.

At a virtual briefing, BSP Governor Benjamin Diokno said the framework now covers all BSP-Supervised Financial Institutions (BSFIs) and their directors or trustees, officers, and employees (DTOEs).

BSFIs include universal and commercial banks, thrift banks, trust corporations, and other non-bank financial intermediaries. The framework previously covered only banks, quasi-banks, and their directors and officers.

The revised guidelines also impose a maximum penalty of P1 million for every transactional violation or P100,000 per calendar day for a continuing violation committed by the BSFIs and their DTOEs.

The central bank can also impose a fine of no more than thrice the profit gained or loss avoided due to the violations, in line with the provisions of the New Central Bank Act.

“These guidelines provide more teeth to hold BSFIs and their DTOEs accountable for their conduct, deter the future commission of violations, and sustain discipline in engaging in safe and sound banking practices,” Diokno said.

Diokno said the BSP takes into consideration the circumstances of each case in determining the appropriate monetary penalty for violations of banking laws, rules, and regulations.

Among the considerations are the nature, gravity and seriousness of the violation, financial and non-financial impact, intentionality, frequency, and duration, and measures undertaken to address the violation.

“The BSP remains steadfast in its commitment to ensure the stability of the financial system through strong and effective regulations for BSFIs,” Diokno said. — RSJ, GMA News