The Bangko Sentral ng Pilipinas (BSP) has come out with a stricter “Fit and Proper Rule” for directors and officers of banks and other financial institutions under BSP supervision. Basically, the “Fit and Proper Rule” empowers the BSP to pass upon the fitness and qualifications of bank directors and officers. This is to ensure that officials tasked to manage banks and other financial institutions possess the required integrity and competence to ensure that these entities are prudently and soundly managed. Thus, this will afford better protection to depositors and the public, in general.
The revised guidelines, which specify grounds for disqualification of directors and officers, expanded the scope of disqualifications by adding other crimes and offenses. Persons with findings of conviction, culpability, or administrative liability, as may be determined by the court, Monetary Board, regulatory body or other government agencies, may be disqualified permanently or temporarily, depending upon whether the judgment rendered is final and executory, still pending appeal, or if the sanction imposed is merely suspension or payment of monetary penalty.
Persons who may be permanently disqualified from holding director or officer positions are not only those who have been convicted by final judgment for offenses involving dishonesty or breach of trust such as embezzlement, malversation, and extortion, but also those convicted by final judgment for bribery, falsification, as well as violations of the Anti-Graft and Corrupt Practices Act. On the other hand, persons who refuse to disclose any material information to the BSP when required pursuant to a provision of law or regulation or directors who have been absent for more than half of all meetings of the board during their incumbency may be temporarily disqualified.
However, directors and officers who have been temporarily disqualified for certain irregularities or on the basis of derogatory information may, respectively, be given a chance to clear themselves after showing good and justifiable reasons or after a lapse of five (5) years from the time the basis of the derogatory record was initiated.
Moreover, directors and officers are required to submit a verified statement that they have all the qualifications and none of the disqualification.