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Print articleGetting the Deal Through – Banking Regulation 2013
May, 2013 - Rafael A. Morales
Regulatory framework- 1 What are the principal governmental and regulatory policies that govern the banking sector? The government recognises the vital role of banks in providing an environment conducive to the sustained development of the country’s economy. Accordingly, it is the government’s policy to promote and maintain a stable and efficient banking system that is globally competitive, dynamic and responsive to the demands of a developing economy.
2 Summarise the primary statutes and regulations that govern the banking industry.
The General Banking Law governs not only universal banks but also commercial banks. Section 71 thereof provides that the organisation, ownership, capitalisation and powers of thrift banks (composed of savings and mortgage banks, stock savings and loan associations, and private development banks), rural banks, cooperative banks, and Islamic banks, as well as the general conduct of their businesses are governed by the Thrift Banks Act, the Rural Banks Act, the Philippine Cooperative Code and the Charter of Al-Amanah Islamic Investment Bank of the Philippines respectively. However, the General Banking Law applies to thrift banks and rural banks, insofar as it is not in conflict with the provisions of the special laws governing such banks. On the other hand, the Philippine Cooperative Code recognises the primacy of the General Banking Law in the regulation of cooperative banks.
The rules implementing the above statutes are embodied in the Manual of Regulations for Banks issued by the Bangko Sentral ng Pilipinas (BSP), the Philippine central bank. From time to time, additional circulars and other issuances are promulgated by the BSP to cover new matters, if not to amend, repeal, supplement, or otherwise modify existing rules.
3 Which regulatory authorities are primarily responsible for overseeing banks?
