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Date Issued: 06.23.2011

Number: 727


CIRCULAR NO. 727
Series of 2011

Subject: Amendment to the Guidelines on Branching and Voluntary Closure/Sale/Acquisition of Branches/Other Banking Offices

Pursuant to Monetary Board Resolution No. 789 dated  26 May 2011, the  provisions of the Manual of Regulations for Banks (MORB) are hereby amended as follows: 

Section 1.  Item “d” of Subsec. X151.4 on branching guidelines is hereby amended to read as  follows: 

“Subsec. X151.4 Branching guidelines. Branches may be established, subject to the following guidelines:

“x x x

“d.   As  a  general   rule,   banks   shall  be  allowed  to  establish  branches  anywhere
in the Philippines, except in the cities of Makati, Mandaluyong, Manila, Parañaque, Pasay, Pasig, Quezon and San Juan (restricted areas):  Provided, however, That RBs/Coop Banks shall not be allowed to establish branches in Metro Manila:  Provided, further, That –

1) Branches of microfinance-oriented banks, microfinance-oriented branches of banks which are not microfinance-oriented may be established anywhere, subject to compliance with, among other requirements, the minimum capital requirement under Item “a” of Subsec. X151.2 and the following conditions:

a) A microfinance-oriented TB or RB may be allowed to establish  branches in Metro Manila, including in the restricted areas, if it has combined capital accounts of at least P=  1.0 billion in case of a TB, or at least P= 100.0 million in case of an RB; and

b) A TB or RB/Coop Bank may be allowed to establish microfinance-oriented branches in Metro Manila, including in the restricted areas, if it has combined capital accounts of at least P= 1.0 billion in case of a TB, or at least  P= 100.0 million in case of an RB/Coop Bank.

2) Subject to the submission of the specific business purpose for establishing the branch, among other justifications:

a) A TB with  head  office  located outside  the   restricted  areas or an RB  with  head  office  located outside  the   restricted  areas but within Metro Manila with  combined capital  accounts of at  least  P=  1.5 billion may  be  allowed  to  establish  one (1) branch anywhere within the restricted areas if it has no existing branch in said  areas; and

b) An RB with head office located outside Metro Manila with combined capital accounts of at least P= 1.5 billion may be  allowed to establish one (1) branch anywhere in Metro Manila,  including in the restricted areas, if it has no existing branch in Metro Manila.

3) A TB with head office outside Metro Manila with  combined capital accounts of at least P=  1.0 billion may establish branches in Metro Manila, except in the restricted areas.

4) A TB with head office outside Metro Manila and  Cities of Cebu and Davao with combined capital   accounts of at least P= 500 million may establish branches in the Cities of Cebu and   Davao.

5) Subject to the restrictions in Items “6”, “7”, “8” and “9” hereof, an RB with combined capital accounts of at least P10.0 million, may establish branches in cities/municipalities of higher classification and with  corresponding higher capitalization requirements, except in Metro Manila:  Provided, That where the majority of the RB’s total assets and/or majority of its total deposit liabilities are regularly accounted for by branches located in such cities/municipalities of higher classification, the RB shall comply with the required minimum capital under Subsection X111.1 for that city/municipality of the highest classification within one (1) year from the BSP finding.          

6) An RB or a  Coop  Bank  shall  only  be allowed to  establish   branches  if  its  combined   capital   accounts   is  at  least   P= 10  million;

7) An  RB    with combined  capital  accounts of at least   P= 10.0 million but less than P= 50.0 million  may establish branches  anywhere within two (2) – hour normal travel time by land/sea public transport from the head office, except in Metro Manila;                     

8) An RB with combined capital accounts of at least P= 50.0 million but less than   P= 100.0 million may establish branches in any island group (Luzon, Visayas or Mindanao) where the head office is located, except in Metro Manila.   

9) An RB with combined capital accounts of at least  P= 100.0  million  may establish branches  anywhere in the Philippines, except in Metro Manila unless qualified under Items “d(1)” and “d(2)”  above; and

“x x x”

Section 2. Item “b(5)” of Subsec. X151.10 on voluntary closure/sale of branches/other banking    offices is hereby amended to read as follows: 

“Subsec. X151.10  Voluntary closure/sale/acquisition of branches/other banking offices.    

“ x  x  x

 “b. Sale/acquisition of branches/other banking offices.  Sale/acquisition of existing/operating branches/other banking offices may be allowed with prior  approval of the Monetary Board in accordance with the following procedures:

“ x   x   x

“(5)   x  x  x

A UB, KB or TB may purchase/acquire branches/other banking offices anywhere, including in Metro Manila and in the restricted areas: Provided, That a TB may purchase/acquire branches/other banking offices in Metro Manila, including in the restricted areas, if it has combined capital accounts of at least  P=  1.0 billion, and purchase/acquire branches/other banking offices in the Cities of Cebu and Davao, if it has  combined capital accounts of at least P= 500.0 million:         

x  x  x”

This Circular shall take effect fifteen (15) calendar days following its publication either in the Official Gazette or in a newspaper of general circulation.

 FOR THE MONETARY BOARD:

AMANDO M. TETANGCO, JR.
Governor

 

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