Friday, December 30, 2011

News Update Banks, clients in ‘Sendong’-stricken Mindanao get regulatory relief

Banks and their clients may seek regulatory relief from the Bangko Sentral ng Pilipinas (BSP) to ease their financial burdens in areas ravaged by Tropical Storm “Sendong.” The BSP’s policy body, the Monetary Board, approved on Tuesday an initial set of nine temporary relief measures to enable banks in parts of Northern and Western Mindanao to weather the impact of Sendong on the local economy there, the central bank said in a statement Thursday. Among the relief measures for the banks in disaster stricken areas are: Exclusion of existing loans of borrowers from the computation of past due ratios provided these are restructured or given relief; Reducing from 5 percent the general loan loss provision to 1 percent for restructured loans of borrowers; Non-imposition of penalties on legal reserves deficiencies with head office and/or branches; Moratorium on monthly payments due to BSP for banks with ongoing rehabilitation programs. Also approved by the MB are: Non-imposition of monetary penalties for delays in the submission of supervisory reports; Allowing banks to provide financial assistance to their officers and employees who were affected by the calamity including assistance that may not be within the scope of the existing BSP-approved Fringe Benefit Program; A 60-day grace period to settle the outstanding rediscounting obligations as of 15 December 2011 with the BSP of all rediscounting banks; Subject to BSP approval, booking of allowance for probable losses on a staggered basis over five (5) years for all types of credit extended to individual and businesses directly affected by the calamity; Allowing banks to restructure with the BSP, on case-to-case basis, the outstanding rediscounted loans of borrowers affected by the calamity.The BSP did not indicate in its statement the duration of the effectivity of the relief measures, but it did say it will issue “additional and specific conditions.” — With Earl Victor Rosero/VS,