BSP eases requirements for naming banks’ top brass

The Bangko Sentral ng Pilipinas (BSP) has eased requirements for the confirmation of the appointment of banks’ key officers, covering fewer positions and needing fewer documents.

BSP Governor Benjamin Diokno said at a press briefing this was intended to emphasize that it was the banks’ responsibility to ensure the fitness of their appointees to leadership positions.

“While we have relaxed the rules, the BSP continues to have the authority to disqualify directors or officers under existing laws and regulations,” Diokno said. The new rules, spelled out in BSP Circular No. 1136, limit BSP confirmation to certain senior vice president (SVP) positions and higher posts of universal and commercial banks.

These officers are those who are also the heads of comptrollership or finance, lending, treasury, branch banking, and information technology, and who directly report to the president or chief executive or equivalent rank.

Before the amendments, all officers with a rank of SVP or higher were subject to BSP confirmation.

For other BSP-supervised financial institutions (BSFIs), BSP confirmation is limited to directors or trustees, chief executives, presidents or their equivalent rank, heads of control functions, such as internal audit, risk management and compliance, and trust officers, regardless of rank. Diokno said BSFIs and their key officers will continue to be monitored through off-site supervision and examination.

“The boards of directors or trustees of BSFIs are expected to establish a sound corporate governance framework and adopt robust selection processes for key members of senior management,” he said.

“Through their respective boards and presidents or chief executive officers, BSFIs should be held responsible for fit and proper tests for key officials as they have a better perspective on the qualifications, competencies and propriety of candidates,” he added.

The circular also trimmed down the required documents for submission to the BSP from 12 to five.

These include a letter-request stating that the concerned financial institution is taking full responsibility for ensuring that an elected director or trustee or appointed officer meets the central bank’s eligibility requirements.