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The Bangko Sentral ng Pilipinas (BSP) has urged the House of Representatives to expedite the passage of the Financial Accounts Regulation Act as well as the “limited lifting” of the bank deposit secrecy law. Elmore Capule, BSP Senior Assistant Governor and General Counsel, noted that the Philippines is the only country that has secrecy of bank deposit laws, based on findings of the International Monetary Fund (IMF) and World Bank (WB).
This, in turn, significantly inhibits the BSP’s efficient supervision. “The current laws on secrecy of bank deposits restrict the depth of information and records that BSP can look into,” explained Capule. “WB and IMF noted that bank secrecy laws in the country restrict the BSP’s ability to undertake effective supervision.”
Under Presidential Decree (PD) 1792, the BSP previously had the authority to examine bank deposit accounts upon the authorization of the Monetary Board. This was later removed in 1993 following the enactment of the BSP Charter (Republic Act 7653). According to Capule, both the IMF and WB have proposed that the “BSP should be granted unimpaired access to information on all customer accounts, and the ability, without constraints, to employ and share depositor information for any prudential purpose in order to fulfill its supervisory mandate to address safety and soundness concerns.”
“What the BSP is proposing is a very limited lifting of bank secrecy, so we can be [on a] par with international best practices,” Capule added. He also affirmed that safeguards would be implemented to mitigate potential abuses. “We want a small exemption to prevent insider abuse. We know that under our existing laws, owners of banks, stockholders, and directors are insiders, and by law, they are required to exercise most diligence and fidelity to their depositors.”
The BSP Senior Assistant Governor acknowledged that a number of insider abuses have occurred in the past. To avoid this, part of the suggested amendments is to only grant the Monetary Board to can authorize and examine the deposits. Irwin Tieng, Chairman of the House Committee on Banks and Financial Intermediaries, has committed to file the bill following the BSP’s proposal.
As for the Financial Accounts Regulation Act, Capule noted that they “have seen that a lot of accounts are now being abused, increasing number money mules, and it’s very hard to go after these people.” Hence, Tieng has since filed the Anti-Account Scamming Act (House Bill 3172) last August 4 which proposes money mule and social engineering schemes to be punishable offenses.
Source: BusinessMirror
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