The Bangko Sentral ng Pilipinas (BSP) has issued new guidelines to facilitate the “timely” submission of foreign exchange (forex) transaction reports by banks, which regulators need for policy studies and monitoring of the economy and financial system.
BSP Governor Eli Remolona Jr. last July 12 signed Circular No. 1197, which imposed higher fines for reporting violations, among other changes. Reporting entities—which now include Islamic banks and digital banks—have until the end of the year to make the necessary preparations and adjustments to their systems and processes.
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The new circular, a copy of which was sent to reporters on Wednesday, said such violations include reports that are considered erroneous, delayed, or both. There are also penalties for nonsubmission of reports.
“The amended guidelines will facilitate timely submission of reports by banks in accordance with the BSP’s reporting standards and instill accountability,” the central bank said.
Monetary penalties
The reports are now classified as either primary or secondary—the former referring to documents with information necessary for monitoring of capital flows and policy development and the latter being those “not included in the definition of primary report.”
To note, the old rules previously classified the reports as either “Category A” or “Category B.”
To facilitate better compliance, the circular imposed higher fines for reporting violations. But the BSP also set a cap on the amount of penalties that may be collected, particularly in cases of continuing offenses.
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For instance, the new monetary penalties for reporting violations of big banks and Islamic banks were set at P3,000 for primary report, and P600 for secondary report.
The old rules previously slapped a penalty of P1,200 per calendar day for big banks with offenses involving Category A report, and P240 per calendar day for Category B reports.
At the same time, the BSP set a maximum monetary penalty of P1 million for each transactional violation, or P100,000 per calendar day for violations of a continuing nature.
”To ensure fairness, consistency and reasonableness in monetary or nonmonetary penalty imposition, the BSP takes into consideration its general principles, categories of enforcement actions, observance of due process and attendant circumstances of each case,” the BSP said.
The circular will take effect 15 banking days after its publication either in the Official Gazette or in a newspaper of general circulation. — with Czashaine Mai T. Abella INQ