Only healthy banks allowed to voluntarily surrender licenses — BSP
Only banks that are in the pink of financial health will be allowed by regulators to voluntarily give up their licenses to ensure that no outstanding liabilities remain unmet once they cease banking operations or shift to other lines of business.
Thus said the Bangko Sentral ng Pilipinas on Monday as it announced that its policy making Monetary Board recently tightened guidelines on the voluntary surrender of banking licenses either with a plan to proceed to voluntary dissolution and liquidation or to keep the entity’s corporate life and convert into a non-bank entity.
“The guidelines cover instances of voluntary surrender where no creditors will be affected during the resulting voluntary dissolution or the conversion into a non-bank entity,” the central bank said in a statement.
“At the minimum, the applicant bank will ensure immediately accessible funds equivalent to its outstanding deposit obligations to provide assurance on the repayment of depositors,” it added.
In the past, some banks have given up their coveted banking licenses when they merge or are acquired by other banks or shift to other business activities. Henceforth, however, the regulator will first ensure that all existing obligations — especially to creditors and depositors — are covered before a financial institution is allowed to exit the business voluntarily./TSB
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