BSP Circular No. 895: Guidelines on Related Party Transactions

The Bangko Sentral ng Pilipinas (BSP), through the Monetary Board, issued a resolution dated 13 November 2015 approving guidelines on related party transactions (RPTs) of banks and their non-bank financial subsidiaries and affiliates.

Section X146 of the Manual of Regulations for Banks (MORB) shall now read as follows:

The Bangko ng Sentral ng Pilipinas recognizes that transactions between and among related parties create financial, commercial and economic benefits to individual institutions and to the entire group where said institutions belong. In this regard, related party transactions are generally allowed provided, that these are done on arm’s length basis. The BSP expects banks, inclusing their non-bank financial subsidiaries and affiliates, to exercise appropriate oversight and implement effective control systems for managing said exposures as these may potentially lead to abuses that are disadvantageous to the bank and its depositors, creditors, fiduciary clients , and other stakeholders.

Other related sections were also accordingly amended.

To download full copy of BSP Circular, please follow link:https://rbap.org/wp-content/uploads/2015/12/c895.pdf