By Eileen Mencias
Bank directors and senior executives could be ousted even after taking office if they fail annual fit-and-proper tests under proposed Bangko Sentral ng Pilipinas rules that would tighten oversight of financial institutions.
The BSP could also order banks and other supervised institutions to reconstitute boards, replace independent directors or reorganize board committees based on supervisory findings.
The draft rules would replace one-time vetting with annual assessments of officials whose appointments require BSP confirmation, covering their integrity, competence and diligence.
Banks would have five banking days to notify the BSP of information that could materially undermine an official’s fitness or ability to perform the job.
The proposal would also tighten technology requirements for systemically important and digital banks. At least one director and one senior management officer would need at least three years of experience and technical knowledge in technology or e-commerce.
Technology-dependent banks would also need at least one director with expertise in information technology, cybersecurity, digital technology or data governance.
Chief compliance officers would be required to complete a corporate governance seminar based on a BSP-prescribed syllabus, with existing compliance chiefs also subject to the requirement.
Major banks and digital banks would have to submit preferred candidates for covered positions as early as three months before appointment. Officials generally could not assume office without BSP confirmation, except in urgent vacancies.
The proposed circular would take effect 15 calendar days after publication if approved.—Bilyonaryo.com
