The Monetary Board, the policy-making body of Bangko Sentral ng Pilipinas, approved the grant of regulatory relief to branches of foreign banks that were established in the country prior to the effectivity of Republic Act 10641.
The relief exempts the banks from penalty until Dec. 31, 2021 if they breach the single borrower’s limit.
BSP Governor Benjamin Diokno, who is also the board chairman, said consistent with the other regulatory reliefs or initiatives earlier implemented by the BSP, the latest measure was expected to help boost lending in support of businesses and sectors, and pump prime the country’s economic growth and post-pandemic recovery.
“Additionally, this will diversify credit exposures, particularly in financing big ticket projects, that otherwise will be concentrated to domestic banks,” he said in a statement to reporters.
The regulatory relief was extended in view of the lapse of the transitory period for the SBL computation on Dec. 31, 2020 implementing R.A. No. 10641.