109 BANK PREMISES AND OTHER FIXED ASSETS
a. The investment shall include all real estate and equipment necessary for the bank’s immediate use in the transaction of its business, such as:
(1) Bank Premises – Land and Buildings, Buildings under Construction, Leasehold Rights and Improvements and Furniture, Fixtures and Equipment (as defined in the Manual of Accounts for All Banks), owned and used by the bank in the conduct of its business, including staff houses, recreational facilities and landscaping costs, net of accumulated depreciation: Provided, however, That appraisal increment on bank premises shall not be included in the total investment in real estate and improvements for purposes of these guidelines; and
(2) Real properties, equipment or other chattels purchased by the bank in its name for the benefit of its officers and employees, net of depreciation and in the case of land or other non-depreciable property, net of payments already made to the bank by the officers and employees for whose benefits the property was bought, where such property has not yet been fully paid and ownership has not yet been transferred to them.
b. The following shall be included in the computation of a bank’s total investment in bank premises:
(1)(a) The cost of real estate leased in whole or in part by the bank from a corporation, other than a corporation primarily engaged in real estate in which the bank has equity, equivalent to the amount obtained by applying the percentage of the equity of the bank in the lessor to the cost of that portion of the property being leased, or
(b) the amount of equity in the lessor, whichever is lower, plus the amount obtained by applying the percentage of the equity of the bank in the lessor to any outstanding loans of the lessor with the bank, the proceeds of which were used to purchase, construct or develop the real estate used for the bank’s purposes.
(2) The lower of –
(a) the cost of real estate leased in whole or in part by the bank from a corporation in which any or a group of stockholders owning ten percent (10%) or more of the voting stock of the bank, directors and/or officers of the bank, hold or own more than fifteen percent (15%) of the subscribed capital stock of the lessor, equivalent to the amount obtained by applying the percentage of the equity of said stockholders/directors/officers in the lessor to the cost of that portion of the property being leased by the bank, or
(b) the amount obtained by applying the percentage of the equity of the stockholders/ directors/officers in the lessor to any outstanding loans of the corporation with the bank, the proceeds of which were used to purchase, construct or develop the real estate used for the bank’s purposes.
a. Prior written approval of the majority of the members of the board of directors has been obtained for such reclassification. The approval shall be manifested in a resolution passed by the board of directors during a meeting and shall contain the following information:
(1) Date ROPA was acquired;
(2) Description of ROPA property;
(3) Outstanding balance of ROPA at the time of reclassification;
(4) Specific purpose for reclassifying said property to bank premises, furniture, fixture and equipment; and
(5) Justification and plan for expansion, in the case of real and other property earmarked for future use.
b. Only such acquired asset, or a portion thereof, that will be (i) immediately used, or (ii) ready and available for use within a two (2)-year period from date of reclassification (in case of ROPA earmarked for future use) may be reclassified to bank premises, furniture, fixture and equipment;
c. ROPA reclassified to bank premises, furniture, fixture and equipment shall be recorded at its net carrying amount where the amounts booked as cost, accumulated depreciation and allowances for losses for bank premises, furniture, fixture and equipment shall correspond to the balance of these accounts under ROPA at the time of reclassification. As such, the reclassification shall not give rise to any gains/(losses) being recognized in the bank books; and
d. Said reclassification shall not cause the bank to exceed the prescribed ceiling on investment in real estate and improvements thereon, including bank equipment, provided under this Section on Ceiling on total investments.
1. On the bank
a. Monetary fines
(1) For non-submission of the required certification
(2) For false/misleading statements
2. On the concerned directors/officers of the bank.
a. For willful non-compliance Directors/officers of the bank who willfully fail/refuse to comply with the provisions of this Subsection shall be subject to the appropriate monetary penalties under Sec. 1102 (Guidelines on the imposition of monetary penalties).
b. For false/misleading statements Directors/officers of the bank which have been found to have willfully falsely certified or willfully submitted misleading statements in the required Certification on Compliance with the Regulation on the Reclassification of ROPA to Bank Premises, Furniture, Fixture and Equipment or in the certified true copy of the resolution of the bank’s board of directors shall be subject to the to the appropriate monetary penalties under Sec. 1102 (Guidelines on the imposition of monetary penalties), which shall be reckoned on a daily basis from the day following the due date of the said certification until such time that an amended or corrected certification on compliance or certified true copy of the resolution of the board of directors has been submitted to the Bangko Sentral.
(Circular Nos. 988 dated 20 December 2017)
- With additional special regulatory relief in areas affected by Tropical Depression “Yolanda” as provided under Appendix 93.