The Bangko Sentral ng Pilipinas has further made rules and policies concerning the quality of governance in the financial services industry stricter.
The central bank expanded the number of grounds wherein directors and officers of banks and other financial institutions can be disqualified.
According to PhilStar, the revised rules received the approval of the Monetary Board.
Officers of banks and quasi-banks need to be more careful not to do anything to reflect how poorly they are governing their respective institutions.
Under the guidelines, anyone who committed anything to cause undue injury, material loss as well as damage to the bank can be barred from becoming a director or officer in other BSP-supervised financial institutions.
The same goes for persons who just exposed the bank to a higher form of risk or danger.
Under the new guidelines, the central bank added that experiences of dismissal from any government institution is now another ground for disqualification.
One more is the conviction for offenses under the amended charter of the Philippine Deposit Insurance Corp.
The last one is the delinquency or unwillingness to settle obligations.
All these new grounds are meant to promote transparency.
Bangko Sentral ng Pilipinas Adds New Disqualification Procedures
Moreover, the new guidelines come with disqualification procedures.
This is to ensure that affected persons will have due process to explain their sides. They will have the chance to show evidence to support their cases.
If the BSP disqualifies a person, his or her name will be part of a watchlist database, however.
The person cuts any connection to any BSP-supervised financial institution after this. This will be the case unless his or her name is no longer part of the said list.
The BSP clarified that the new issuance just complements the Circulars 969 and 970.
These circulars came into force back in August 2017.
They set out the fit and proper rules that directors and trustees, as well as officers, need to follow.
Tone of Good Governance to Come from Top
The new guidelines, therefore, just improved existing corporate governance standards that the board of directors and officers need to meet.
They also enhance the key roles and responsibilities of these persons, in alignment with the principle of good governance.
According to Inquirer, the new rules make it easier for the central bank to stop erring bank directors and officers from pursuing roles that can allow them to do more unethical activities.
The BSP wants to make sure the tone of good governance comes from the top all the time.
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