TABLE OF CONTENTS

POWERS OF THE BANGKO SENTRAL

Section 001 Examination by the Bangko Sentral
Section 002 Supervisory Enforcement Policy
Section 003 Prompt Corrective Actions Framework

PART ONE – ORGANIZATION, MANAGEMENT AND ADMINISTRATION

A. CLASSIFICATIONS, POWERS AND OPERATIONS OF BANKS
Section 101 Classification, Powers and Scope of Authorities of Banks
Section 101-B Authority of Thrift Banks to Issue Foreign Letters of Credit and Pay/Accept/Negotiate Import/Export Drafts/Bills of Exchange
Section 102 Basic Guidelines in Establishing Domestic Banks
Section 103 Liberalized Entry and Scope of Operations of Foreign Banks
Section 104 Mergers and Acquisitions
Section 105 Establishment/Relocation/Voluntary Closure/Sale of Branches/ Branch-Lite Units
Section 106 Establishment of Sub-Branches of Foreign Bank Branches
Section 107 Mobile Foreign Exchange Booths
Section 108 Banking Days and Hours
Section 109 Bank Premises and Other Fixed Assets
B. SPECIAL AUTHORITIES
Section 111 Licensing
Section 112 Management Contracts and Outsourcing
Section 113 Cross-selling
Section 113-B Marketing, Sale and Servicing of Microinsurance Products by Thrift Banks
Section 113-C Marketing, Sale and Servicing of Microinsurance Products by Rural and Cooperative Bank
Section 114 Prohibition on the Sale of Foreign-Based Mutual Funds by Banks
C. CAPITALIZATION AND RISK-BASED CAPITAL
Section 121 Minimum Required Capital
Section 122 Shares of Stock of Banks
Section 122-A Shares of Stock of Universal/Commercial Banks
Section 122-B Shares of Stock of Thrift Banks
Section 122-C Shares of Stock of Rural Banks and Cooperative Banks
Section 123 Deposit for Stock Subscription
Section 124 Dividends
Section 124-C Limitations/Amount available for dividends declared by rural banks and cooperative banks
Section 125 Basel III Risk Based Capital
Section 126 Capital Instruments Eligible as Risk-Based Capital
Section 127 Risk-Based Capital Adequacy Framework for Stand-Alone Thrift Banks, Rural Banks and Cooperative Banks
Section 128 Domestic Systemically Important Banks (DSIBs)
Section 129 Basel III Leverage Ratio Framework
Section 130 Internal Capital Adequacy Assessment Process and Supervisory Review Process
D. CORPORATE GOVERNANCE
Section 131 Policy Statement and Definition of Terms
Section 132 Board of Directors
Section 133 Board-level committees
Section 134 Officers
Section 135 Remuneration and Other Incentives
Section 136 Related Party Transactions
Section 137 Confirmation of the Election/Appointment of Directors/ Officers; Bio-data of Directors and Officers; Interlocking Directorships and/or Officerships; Rules of Procedures on Administrative Cases involving Directors and Officers of BSFIs
Section 138 Disqualification and Watchlisting of Directors and Officers
E. RISK MANAGEMENT
Section 141 Supervision by Risk
Section 142 Risk Governance Framework
Section 143 Credit Risk Management
Section 144 Market Risk Management
Section 145 Liquidity Risk Management
Section 145-A Liquidity Coverage Ratio (LCR)
Section 146 Operational Risk Management
Section 147 Bank Protection
Section 148 Information Technology Risk Management
Section 149 Business Continuity Management
Section 150 Social Media Risk Management
Section 151 Guidelines on the Conduct of Stress Testing Exercises
F. COMPLIANCE, INTERNAL CONTROL, AND AUDIT
Section 161 Compliance Framework
Section 162 Internal Control Framework
Section 163 Internal Audit Function
Section 164 Selection, Appointment, Reporting Requirements and Delisting of External Auditors and/or Auditing Firm; Sanctions; Effectivity
G. REPORTING GOVERNANCE
Section 171 Reporting Governance Framework
Section 172 Financial Records
Section 173 Reports
Section 174 Audited Financial Statements
Section 175 Public Disclosures
H. UNSAFE OR UNSOUND BANKING
Section 181 Conducting Business in an Unsafe or Unsound Banking
I. SURRENDER OF BANKING LICENSE, LIQUIDATION, AND RECEIVERSHIP
Section 191 Voluntary Liquidation
Section 192 Insolvency or Receivership of Banks

PART TWO – DEPOSITS, BORROWINGS AND OTHER LIABILITIES

A. DEMAND DEPOSITS
Section 201 Authority to Accept or Create Demand Deposits
Section 202 Returned Checks
Section 203 Temporary Overdrawings; Drawings Against Uncollected Deposits
Section 204 Demand Deposits of Bank Officers and Employees
B. SAVING DEPOSITS
Section 211 Saving Deposit Transactions
Section 212 Peso Savings Deposit Accounts of Embassy Officials
C. TIME DEPOSITS
Section 216 Term of Time Deposits
Section 217 Certificates of Time Deposit
Section 218 Special Time Deposits
D. NEGOTIABLE ORDER OF WITHDRAWAL ACCOUNTS
Section 221 Authority to Accept Negotiable Order of Withdrawal Accounts
Section 222 Minimum Features of Negotiable Order of Withdrawal Accounts
Section 223 Rules on Servicing Negotiable Order of Withdrawal Accounts
E. GOVERNMENT DEPOSIT
Section 231 Acceptance of Government Deposits
F. DEPOSIT SUBSTITUTE OPERATIONS (QUASI-BANKING FUNCTIONS)
Section 241 Scope of Quasi-Banking Functions
Section 242 Deposit Substitute Instruments
Section 243 Minimum Trading Lot and Minimum Term of Deposit Substitute
Section 244 Money Market Placements of Rural Banks
Section 245 Without Recourse Transactions
Section 246 Issuance of Bonds and Commercial Papers
G. RESERVE AGAINST DEPOSIT AND DEPOSIT SUBTITUTES LIABILITIES
Section 251 Accounts Subject To Reserve; Amounts Required
Section 252 Composition of Reserve
Section 253 Exemptions from Reserve Requirements
Section 254 Computation of Reserve Position
Section 255 Reserve Deficiencies; Sanctions
Section 256 Report on Compliance
H. INTEREST AND FEES
Section 261 Interest on Deposits/Deposit Substitutes
Section 262 Disclosure of Effective Rates of Interest
Section 263 Fees on Retail Bank Products/Services
I. DEPOSIT OPERATIONS
Section 271 Booking of Deposits and Withdrawals
Section 272 Unclaimed Balances
Section 273 Rental Deposits of Lessees
Section 274 Servicing Deposits Outside Bank Premises
Section 275 Cash Pick-up/Cash Delivery Services; Cash Agents
Section 276 Miscellaneous Rules on Deposits
J. BORROWINGS FROM THE BANGKO SENTRAL
Section 281 Rediscounting Line
Section 282 Rediscounting Availments
Section 283 Repurchase Agreements with the Bangko Sentral
Section 284 Bangko Sentral Liquidity WindoW
Section 285 Emergency Loans or Advances to Banking Institutions
Section 286 Facility to Committed Credit Line Issuers
Section 287-B/C Countryside Financial Institutions Enhancement Program for Thrift Banks, Rural and Cooperative Banks
Section 288 Recording and Reporting of Borrowings
Section 289 Rediscounting Window
Section 290 Enhanced Intraday Liquidity Facility
K. OTHER BORROWINGS OF BANKS
Section 291 Borrowings from the Government
Section 292 Borrowings from Trust Departments or Investment Houses
Section 293-B Mortgage/CHM Certificates of Thrift Banks
Section 294-C Borrowings of Rural Banks/Cooperative Banks
L. OTHER LIABILITIES
Section 295 Collection of Customs Duties/Taxes/Levies and Other Revenues, and Acceptance, Encashment or Negotiation of Checks Drawn in Favor of Commissioner
Section 296 Collection Agents of the Social Security System
Section 297 Collection Agents of PhilHealth
Section 298 Disclosure of Remittance Charges and Other Relevant Information
Section 299 Segregation of Customer Funds and Securities Received by Banks in the Performance of their Securities Brokering Functions

PART THREE – LOANS, INVESTMENTS AND SPECIAL CREDITS

A. GENERAL PROVISIONS ON LENDING OPERATIONS
Section 301 Grant of Loans and Other Credit Accommodations
Section 302 Amortization on Loans and Other Credit Accommodations
Section 303 Secured Loans and Other Credit Accommodations
Section 304 Past Due Accounts and Non-Performing Loans
Section 305 Interest and Other Charges
Section 306 “Truth in Lending Act” Disclosure Requirement
B. TYPES OF LOANS AND CREDITS
Section 311 Salary-Based General-Purpose Consumption Loans
Section 312 Credit Card Operations
Section 313 Agricultural Loans
Section 314 Microfinance Loans
Section 315 Interbank Loans
Section 316 Bank Loans to Government
Section 317 Other Loans and Rediscounting to Thrift/Rural/Cooperative Banks
Section 318 Standby Letters of Credit
Section 319 Committed Credit Line for Commercial Paper Issues
C. MANDATORY/SPECIALIZED CREDITS
Section 331 Agriculture and Agrarian Reform Credit
Section 332 Mandatory Allocation of Credit Resources to Micro, Small and Medium Enterprises
Section 333 Loans to Barangay Micro Business Enterprises
D. LOANS AND OTHER CREDIT ACCOMMODATIONS TO DIRECTORS, OFFICERS, STOCKHOLDERS AND THEIR RELATED INTERESTS/ SUBSIDIARIES/AFFILIATES
Section 341 Policy Statement
Section 342 Transactions, Covered and Not Covered
Section 343 Direct or Indirect Borrowings
Section 344 Individual Ceilings
Section 345 Aggregate Ceiling
Section 346 Procedural and Reportorial Requirements
Section 347 Waiver of Secrecy of Deposit
Section 348 Supervisory Enforcement Actions
Section 349 Applicability to Branches and Subsidiaries of Foreign Banks
Section 350 Applicability to Government Borrowings in Government-Owned or Controlled Banks
E. CREDIT CONCENTRATION AND PRUDENTIAL LIMITS
Section 361 Large exposures and credit risk concentrations
Section 362 Credit Exposure Limits to a Single Borrower
Section 363-A Limits on Real Estate Exposures and Other Real Estate Property of UBs/KBs
Section 363-B Limits on Real Estate Exposures and Other Real Estate Property of TBs
Section 364 Expanded Report on Real Estate Exposure of Banks
F. EQUITY INVESTMENTS
Section 371 Scope of Authority
Section 372 Financial Allied Undertakings
Section 373 Limits on Investment in the Equities of Financial Allied Undertakings
Section 374 Investments in Venture Capital Corporations
Section 375 Non-Financial Allied Undertakings
Section 376-A Investments in Non-Allied or Non-Related Undertakings
Section 377 Investments in Subsidiaries and Affiliates Abroad
Section 378 Prudential Limits and Restrictions on Equity Investments
Section 379 Sanctions
G. SUNDRY PROVISIONS
Section 381 Purchase of Receivables and Other Obligations
Section 382 Acquired Assets in Settlement of Loans
Section 383 Loans-to-Deposits Ratio
Section 384 Credit Policies of Government-Owned Corporations
Section 385 Regulatory Relief for Banks Under Rehabilitation Program Approved by the Bangko Sentral

PART FOUR – TRUST, OTHER FIDUCIARY BUSINESS AND INVESTMENT MANAGEMENT ACTIVITIES

A. STATEMENT OF PRINCIPLES AND SCOPE
Section 401 Statement of Principles
Section 402 Scope of Regulations
Section 403 Definitions
B. TRUST AND OTHER FIDUCIARY BUSINESS
Section 411 Authority to Perform Trust and Other Fiduciary Business
Section 411-B/C Grant of Authority to Engage in Limited Trust Business to Thrift Banks/Rural Banks
Section 412 Organization and Management
Section 413 Trust and Other Fiduciary Business
Section 414 Unit Investment Trust Funds
Section 415 Investment Management Activities
Section 416 Foreign Currency Deposit Unit/Expanded Foreign Currency Deposit Unit Trust Accounts; Other Fiduciary or Investment Management Accounts
Section 417 Security for the Faithful Performance of Trust and Other Fiduciary Business
Section 418 Reserves Against Peso-Denominated Trust and Other Fiduciary Accounts (TOFA) – Others
Section 419 Required Retained Earnings Reserve
Section 420 Unsafe or Unsound Manner
C. INVESTMENT MANAGEMENT ACTIVITIES
Section 421 Authority to Perform Investment Management
Section 422 Organization and Management
Section 423 Conduct of Investment Management Activities
Section 424 Security for the Faithful Performance of Investment Management Activities
Section 425 Required Retained Earnings Reserved
Section 426 Unsound Manner
D. GENERAL PROVISIONS
Section 431 Securities Custodianship and Securities Registry Operations
Section 432 Custody of Assets
Section 433 Fees and Commissions
Section 434 Taxes
Section 435 Books, Records and Reports Required
Section 436 Audits
Section 437 Authority Resulting from Merger or Consolidation
Section 438 Non-Trust, Non-Fiduciary and/or Non-Investment Management Activities
Section 439 Receivership
Section 440 Surrender of Trust or Investment Management License
E. GENERAL PROVISION ON SANCTIONS
Section 499 Sanctions

PART FIVE – MANUAL OF REGULATIONS ON FOREIGN EXCHANGE TRANSACTIONS
(Please refer to separate Manual on Foreign Exchange Transactions)

PART SIX – TREASURY AND MONEY MARKET OPERATIONS

A. MONETARY OPERATIONS OF THE BANGKO SENTRAL
Section 601 Monetary Operations
Section 602 The Japanese Yen/Philippine Peso (JPY/PHP) Swap Facility under the CrossBorder Liquidity Arrangement (CBLA) between the Bangko Sentral and the Bank of Japan (BOJ)
B. TREASURY OPERATIONS OF BANKS
Section 611 Treasury Operations
Section 612 Sales and Marketing Guidelines for Financial Products
Section 613 Derivatives Activities
C. FINANCIAL INSTRUMENTS
Section 621 Global Peso Notes
Section 622 Forward and Swap Transactions
Section 623-A Investments in Credit-Linked Notes, Structured Products and Securities Overlying Securitization Structures
Section 624-A Credit-linked Notes and Similar Credit Derivative Products
Section 625-A Bank’s Exposures to Structured Products
Section 626-A Expanded Foreign Currency Deposit Units Investments in Foreign Currency Denominated Structured Products
Section 627-A Investments in Securities Overlying Securitization Structures
Section 628 Asset-Backed Securities

PART SEVEN – ELECTRONIC BANKING SERVICES AND OPERATIONS

Section 701 Electronic Banking Services
Section 702 Issuance and Operations of Electronic Money

PART EIGHT – REGULATIONS ON PAYMENT SYSTEMS

Section 801 Automated Teller Machines
Section 802 Check Clearing Operations
Section 803 National Retail Payment System

PART NINE – ANTI-MONEY LAUNDERING REGULATIONS

Section 901 Bangko Sentral Authority to Check Compliance with the AMLA, as amended
Section 902 Policy Statement
Section 903 Scope of Regulations
Section 904 Definition of terms
Section 905 Basic Principles and Policies to Combat Money Laundering
A. RISK MANAGEMENT
Section 911 Risk Management
B. PREVENTIVE MEASURES
Section 921 Customer Due Diligence
Section 922 Covered and Suspicious Transaction Reporting
Section 923 Additional Preventive Measures for Specific Customers and Activities
Section 924 Record Keeping
C. TRAINING PROGRAM
Section 931 AML Training Program
D. ENFORCEMENT ACTIONS
Section 941 Sanctions and Penalties
Section 942 Separability Clause

PART TEN – BSP REGULATIONS ON FINANCIAL CONSUMER PROTECTION

Section 1001 Consumer Protection Oversight Function
Section 1002 Consumer Protection Standards
Section 1003 Enforcement Actions

PART ELEVEN – OTHER BANKING REGULATIONS

A. BANKING FEES/CHARGES
Section 1101 Assessment Fees on Banks
Section 1102 Collection of Fines and Other Charges from Banks
Section 1103 Service Fee for Transactions with the Bangko Sentral
B. PHILIPPINE & FOREIGN CURRENCY NOTES & COINS
Section 1111 Philippine and Foreign Currency Notes and Coins
Section 1112 Adoption of Clean Note and Coin Policy
C. PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA)
Section 1121 Personal Equity and Retirement Account (PERA) Market Participants and PERA Investment Products
D. CREDIT RATING AGENCIES
Section 1131 Recognition and Derecognition of Domestic Credit Rating Agencies for Bank Supervisory Purposes
Section 1132 Internationally Accepted Credit Rating Agencies
Section 1133 Recognition and Derecognition of Microfinance Institution Rating Agencies
E. PRODUCT OFFERING OF PARENT OF FOREIGN BANK BRANCHES
Section 1141-A Offering in the Philippines of Products by Parent Bank and Branches Abroad of the Parent Bank
F. FRAMEWORK ON THE GRANT OF REGULATORY RELIEF TO BANKS
Section 1151 Regulatory Relief Policy

APPENDICES