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July 21, 2024

BSP eases rules on confirmation of bank officers

The Bangko Sentral ng Pilipinas (BSP) has further eased and streamlined the rules on the confirmation of the appointments of officers of banks and financial institutions.

BSP Governor Benjamin Diokno said the regulator has issued Circular No. 1136 reducing the coverage of the confirmation of the election or appointment of directors, trustees, and other officers of BSP-supervised financial institutions (BSFIs).

“While we have relaxed the rules, the BSP continues to require BSFIs to have a sound corporate governance framework and to adopt a robust selection process for key members of senior management,” Diokno said.

Previously, all officers designated as senior vice president or higher were subject to BSP confirmation.

The amendment limits the scope to senior vice presidents or higher of big banks and the heads of comptrollership or finance, lending, treasury, branch banking, and information technology, and who directly report to the president or CEO or equivalent rank.

For other BSFIs, BSP confirmation is limited to directors or trustees, CEOs, presidents or their equivalent rank, heads of control functions, such as internal audit, risk management and compliance, and trust officers, regardless of rank.

Diokno said BSFIs and their key officers will continue to be monitored through offsite supervision and examination.

The BSP chief clarified that the regulator continues to have the authority to disqualify directors or officers under existing laws and regulations.

These functions are in line with the BSP Supervisory Assessment Framework focusing on the institution’s significant activities and core functions in the attainment of strategic goals.

The circular also simplified the documentary requirements to support the evaluation of fitness and propriety of BSFI leaders and reduced said requirements to five from 12.