THE Monetary Board, the policy-making body of Bangko Sentral ng Pilipinas, is allowing rural and cooperative banks to invest in readily marketable bonds and other debt securities without prior regulatory approval.
The board, in a circular released Monday, said rural and cooperative banks may invest in readily marketable bonds and other debt securities provided these instruments have complied with the new rules on registration of commercial papers.
“Provided, further, that RBs/coop banks investing in readily marketable bonds and other debt securities shall comply with the prudential criteria enumerated under subsection X1101.2 of the Manual of Regulations for Banks,” the board said.
It said in addition to the criteria, the investment should not be held for trading purposes.
Rural and cooperative banks must submit a one-time notarized certification that the pre-qualification requirements had been complied with within 10 calendar days from date of initial investment.
Banks should also conduct a self-assessment of their compliance with the pre-qualification requirements.
Thrift banks, meanwhile, may invest in evidences of indebtedness, which are registered with the Securities and Exchange Commission but are not readily marketable securities.
The board, however, warned that penalties and sanctions awaited those Bangko Sentral-supervised financial institutions and concerned officers found violating the provisions of the rules. Julito G. Rada