BSP Seeks Sharply Higher Penalty on Erring Institutions
The Bangko Sentral ng Pilipinas (BSP) will seek an increase, through amendment to the applicable laws, in the monetary penalties against banks violating its rules and regulations by more than 1500 percent to P0.5 million from the existing level of only P30,000 to recalcitrant financial institutions from summarily disregarding the rules to up their profit.
Appearing for the first time in the weekly Bulong Pulungan forum, BSP Governor Rafael Carlos B. Buenaventura said the exorbitant monetary penalties will, hopefully, address the oversight of banks to comply with the rules and regulations just to fatten their bottomlines.
Buenaventura admitted that the monetary authorities power to go after erring banks, particularly those violating the foreign exchange rules and regulations at the height of any crises, is limited by the low-level of monetary penalties stipulated in the law.
It was observed that banks would take advantage of the crisis situation to pound on the foreign exchange rate, causing the value of the peso to wildly fluctuate against the US dollar.
Paragraph a of section 37 of Republic Act 7653, the law creating the autonomous Central Monetary Authority or the BSP, states that the Monetary Board, the policy-making body of the BSP, to determine the amounts of fines relative to the degree of banks violations but not to exceed P30,000 per day per violations. …