Stiffer penalties approved for violators of peso settlement system

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AMENDMENTS have been made to regulations in the Peso Real-Time Gross Settlement (RTGS) system to reinforce compliance and operational integrity among financial institutions, the Bangko Sentral ng Pilipinas (BSP) announced.

The changes, approved by the BSP Monetary Board through Resolution 1368 on Nov. 28, impose stricter penalties and sanctions for non-compliance with Section 621 of the Manual of Regulations for Payment Systems (MORPS).

These include a tiered penalty system based on the severity and frequency of violations committed by participants in the Peso RTGS system, with penalties ranging from cash fines to suspension or termination of access to the RTGS system.

The violations may be in the form of liquidity mismanagement, delayed or erroneous reporting, non-compliance with system enhancements and testing, and failure to maintain business continuity plans.

Repeat offenders will face stiffer penalties in accordance with the BSP’s zero-tolerance approach to persistent non-compliance.

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Cash fines will depend on the institution type. Universal and Islamic banks can be fined as high as P75,000 per incident for major infractions. Rural and cooperative banks have lower penalties.

Among the notable violations are liquidity management lapses, such as queuing transactions for over 15 minutes or rejecting more than three transactions per day due to insufficient settlement account balances.

Habitual scheduling of bulk transactions near the RTGS window’s closing to exploit incoming payments will also be fined, the BSP said.

Participants who fail to comply with reporting deadlines, submitting incomplete reports, or neglecting the implementation of prescribed system enhancements will likewise incur stiff penalties.

For instance, failure to submit an attestation report or tiered participation report within specified timelines could result in fines of up to P50,000 per violation.

In cases of multiple infractions or gross violations, the BSP reserves the right to impose cumulative fines ranging from P5,000 to P100,000 and suspend or terminate participation in the RTGS system.

“Once the Bangko Sentral, through its appropriate department, ascertains that a participant has committed a punishable violation, it shall send a notice of violation with corresponding penalty to the participant,” the BSP said.

The BSP will issue a notice of violation to erring participants, allowing them 15 calendar days to justify why penalties should not be imposed. Penalties will be directly deducted from the participant’s settlement account with the BSP.

If the participant lacks a settlement account, the BSP said the fine will be collected from the designated bank’s account.

The amendments will take effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.

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