Bangko Sentral Moves to Penalize Banks Engaging in Foreign Exchange Speculation
Sionil, Fil C., Manila Bulletin
The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas (BSP), has approved a new set of stiffer non-monetary penalties and higher fine against banks breaching the allowable prudential limits on foreign exchange transactions.
BSP Governor Rafael B. Buenaventura said the monetary authorities decided to impose the P30,000 monetary penalty "on a per transaction basis" from a per day violation.
On the non-monetary penalties, Buenaventura said an eight-point sanction will be meted-out on erring banks found to be "willfully and habitually" disregarding the foreign exchange rules, namely:
* Suspension of directors for local banks and country manager for foreign banks;
* Suspension of derivatives activities for a period of up to six months;
* Suspension of foreign currency deposit unit (FCDU) authority for a period of six months;
* Reprimand of bank officers who approved the transaction;
* Suspension of bank officers who approved the transaction;
* Permanent disqualification of banks officers/directors; and
* Reduction or suspension of overbought limits.
Apart from these, Buenaventura said the authorities are also considering reducing the over the counter transaction limit on bank's walk-in clients for travel purposes and without documentation to $5,000 from $10,000.
Buenaventura pointed out, however, that the reduction on the overbought limits of banks is subject to the level of ones violation. …