BSP to push easing of bank secrecy law

Tightening antimoney laundering rules while easing the bank secrecy law, alongside amendments to its charter, is among the priority legislation to be pushed by the Bangko Sentral ng Pilipinas during the 17th Congress, BSP Governor Amando M. Tetangco Jr. said  Monday.

“The BSP will continue to push for amendments to the BSP Charter to help improve further the effectiveness of the BSP as the country’s central monetary authority. Among the most important proposed changes are the increased capitalization of the BSP; its authority to issue own negotiable certificates of indebtedness (for monetary operations); the restoration of its tax exemption (in relation to activities in the pursuit of its mandate); authority to require data from the nonprivate sector; and legal protection of its officials and staff when performing official duties,” Tetangco said in an e-mail to the Inquirer. The sessions of the 17th Congress started  Monday.

Also, “given the developments in the aftermath of the global financial crisis and the direction of global financial market reform, we are also proposing that financial stability be formally recognized part of the mandate of the BSP and as a shared responsibility with other government agencies,” Tetangco added.

“The expansion of the BSP’s supervisory authority to include additional categories of financial institutions, the easing of the deposit secrecy law with respect to BSP examination and oversight of payment and settlement systems are critical components to better address the systemic nature of economic and financial risks,” according to Tetangco.

The BSP chief said part of their legislative agenda were amendments to the Anti-Money Laundering Act (AMLA) as well as to the Bank Deposit Secrecy Law for bank examination purposes.

In April, the BSP, the Anti-Money Laundering Council and the Department of Finance made a last-ditch effort, seeking support from the leadership of the 16th Congress, for draft bills aimed at strengthening the AMLA and amending the Bank Secrecy Law in light of the entry of $81 million in stolen money from Bangladesh’s central bank into Rizal Commercial Banking Corp. (RCBC) and eventually to casinos last February.

The three agencies had sought the inclusion of casinos, real estate brokers, art dealers and motor vehicle dealers as covered persons in the AMLA. They have also pitched to place under the BSP’s supervising authority foreign exchange dealers, money changers as well as remittance and money transfer businesses—already designated as covered persons, for AMLA purposes.

Tetangco had likewise said he supported easing the country’s “very strict” yet antiquated bank secrecy law.

The other items on the BSP’s legislative agenda included the proposed payments system act; amendments to the Al-Amanah Islamic Investment Bank and the establishment of the regulatory framework for the conduct of Islamic banking; enactment of the bill exempting from taxes the sale of gold to the BSP by gold producers as well as passage of the anticoin hoarding bill, Tetangco said.

“The BSP is also closely monitoring other bills that could potentially impact on the BSP such as those that affect credit operations (for example, directed credit by specific economic agents), developments in financial technology and the bills to establish a national ID system,” Tetangco said.