Guidelines on Proposed Investment from TPIs for Purposes of Complying with Minimum Capital Requirements

January 27, 2014BSP MEMORANDUM NO. M-2014-002TO:All Banks   SUBJECT:Guidelines on Proposed Investment from Third Party Investors (TPIs) for Purposes of Complying with the Minimum Capital Requirements Pursuant to Subsection X111.1 and Section X115 of the Manual of Regulations for Banks (MORB) which prescribe the minimum capitalization and Capital Adequacy Ratio (CAR) of banks, respectively, the Monetary Board, in its Resolution No. 65 dated 09 January 2014 approved the following guidelines for capital deficient banks with proposed investments from third party investor/s (TPIs) for purposes of addressing the capital deficiency. A bank that has already entered into a final agreement with a TPI to invest in the bank, which amount of investment shall cover the full amount of the capital deficiency, shall immediately submit the subscription contract/written agreement with the TPI to the BSP. It is understood that with the submission of such contract, the TPI has already agreed to infuse the needed funds to cover the capital deficiency.In case the transaction requires prior BSP approval under Subsection X126.2b of the MORB, the bank shall submit the...