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BSP strengthens rules on filing of cases vs erring bank officials |
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By LEE C. CHIPONGIAN
The Manila Bulletin 04/27/2005 To improve the screening of bank directors and officials, the Bangko Sentral ng Pilipinas has approved new rules and procedures on the filing of administrative cases against erring bankers. Bangko Sentral ng Pilipinas Circular No. 477, which would guide monetary officials in the filing of administrative cases for the ultimate disqualification of guilty directors and officials, will complement existing BSP rules and regulations. The Monetary Board-approved circular said proceedings of these rules would be conducted "without necessarily adhering to the technical rules of procedure and evidence applicable to judicial trials." But proceedings will be "confidential" and will not be divulged to third parties. The circular effectively strengthens the BSP capacity to restrict bank directors and officials that fail the fit and proper rules since the filing of administrative cases will prevent the hiring of bankers, even ban delinquent directors and officials with pending cases with the central bank. The BSP announced earlier that it would go after erring directors of closed banks and to file both civil and criminal cases against them to ensure permanent disqualification. Monetary officials can now focus on filing charges because they have been granted legal basis under the fit and proper rules of General Banking Law. The BSP slap both civil and criminal cases against the directors of a closed bank so that even if the suit is dropped, the civil case will go on and will result in the banning of bank directors. Central bankers have been hindered in the past in pursuing legal cases against bank directors because of the backlash of counter suits. In the meantime the BSP is currently reviewing its fit and proper rules to improve the quality of bank management and to weed out unqualified directors or officers in a financial institution. Based on Section 16 of the General Banking Law, to maintain the quality of bank management and afford better protection to depositors and the public in general the MB will "prescribe, pass upon and review the qualifications and disqualifications of individuals elected or appointed bank directors or officers and disqualify those found unfit." "After due notice to the board of directors of the bank, the Monetary Board may disqualify, suspend or remove any bank director or officer who commits or omits an act which render him unfit for the position," the BSP law said. The BSP added that in determining whether an individual is fit and proper to hold the position of a director or officer of a bank, regard "will be given to his integrity, experience, education, training, and competence." |
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