BSP bars execs’ kin from bank posts

BSP bars execs' kin from bank posts
By Michelle Remo
Philippine Daily Inquirer
First Posted 20:08:00 11/26/2010

MANILA, Philippines—The Bangko Sentral ng Pilipinas has issued a regulation prohibiting spouses and relatives of key bank officers from occupying sensitive positions in a bank.

Under Circular 699, spouses and relatives within second degree of consanguinity of a bank manager, a cashier or an accountant may not occupy positions that deal with handling, managing or recording of assets of a bank.

These include senior management positions, such as chairperson, president, chief executive officer, chief operating officer, general manager and chief financial officer; as well as treasurer, controller and chief accountant, chief cashier, compliance officer and internal auditor.

"The spouse or a relative within the second degree of consanguinity or affinity of any person holding the position of manager, cashier, or accountant of a branch or extension office of a bank/financial institution or their respective equivalent positions is disqualified from holding or being appointed to any of said positions in the same branch or extension office," BSP Governor Amando Tetangco Jr. said in the circular.

The circular is to take effect 15 days after publication in a newspaper of general circulation.

Regulators said the circular was meant to further safeguard banks from fraud. They said risks could be greatly reduced if certain individuals would be barred from occupying sensitive bank positions.

The BSP regularly reviews bank regulations to protect the depositing public.

According to Tetangco, the country's banking sector is now enjoying high levels of liquidity and profitability, winning the confidence of the public as reflected in the growing amount of bank deposits.

The BSP said efforts should be exerted to maintain this high level of confidence in the banking sector.

Data from the central bank showed that total bank deposits in the country amounted to P3.4 trillion as of end-August, up by 8 percent from P3.2 trillion posted in the same period last year.

"Savings and time deposits remained the main source of funds for banks.... Growth in deposits reflected sustained depositor confidence in the banking system," the BSP said in a separate report.

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