THE Bangko Sentral ng Pilipinas (BSP) introduced a stricter penalty framework regime which increases the monetary sanctions and expands the coverage of accountability for financial institutions that are to commit transactional violations.
In a briefing on Thursday, BSP governor Benjamin E. Diokno said adopting a more stringent penalty system for BSP-Supervised Financial Institutions (BSFIs) aims to further promote effective regulation of banks and the financial system.
“These guidelines provide more teeth to hold BSFIs and their directors or trustees, officers and employees [DTOEs] accountable for their conduct, deter the future commission of violations and sustain discipline in engaging in safe and sound banking practices,” Diokno said.
Included in the stricter framework is the increase of monetary penalty from the current P30,000 to a maximum of P1 million for each transactional violation and to P100,000.00 per calendar day for violations of a continuing nature.
Apart from the increase in monetary penalty, the guidelines provide that the BSP may also impose a fine of no more than three times the profit gained or loss avoided due to the violation.
“This is aimed at ensuring that violation of laws, rules and regulations shall not be used by BSFIs as a tool to attain economic advantage,” Diokno said.
The central bank governor also said, to ensure fairness, consistency and reasonableness in monetary penalty imposition, the BSP will consider four factors in determining the appropriate amount of monetary penalty to be imposed.
These factors are: nature, gravity and seriousness of the violation or irregularity; financial and non-financial impact of the violation or irregularity to the BSFI, its industry and the financial system; intentionality, frequency and duration of the violation or irregularity; and, measures undertaken to stop or correct the violation or irregularity.
“Due process shall be observed in the imposition of monetary penalties to afford the BSFIs and their DTOEs fair and reasonable opportunity to explain their side and submit supporting evidence,” Diokno said.