Basic Guidelines for Establishing Banks in the Philippines – An Overview and Summary of Requirements

• By: Staff Editor
• Date: September 27, 2013

The Philippines formulated these guidelines for establishing banks in the country using the following core principles:

• Suitable shareholders
• Adequate financial strength
• Legal structure in line with its operational structure
• Management with sufficient expertise and integrity

• The original copy and duplicate copy should be submitted to the Central Applications and Licensing Group (CALG), Bangko Sentral ng Pilipinas (BSP).
• The third copy should be retained by the organizers.

1. “Agreement to Organize a Bank” (Form No. 2).
2.  Accomplished bio-data sheet of each of the incorporators, proposed directors and officers, and subscribers (Form No. 3).
3.  Evidence of Filipino citizenship of each of the incorporators, proposed directors and officers, and subscribers
4. Statement of Assets and Liabilities
5. Statement of Income and Expense for the last three (3) calendar years of each of the subscribers
6. Certified photocopies of Income Tax Returns for the last three (3) calendar years of each of the incorporators, proposed directors and officers, and subscribers.
7. Clearances from the National Bureau of Investigation (NBI) and Bureau of Internal Revenue (BIR) of each of the incorporators, proposed directors and officers, and subscribers.
8. For corporate subscribers, documents such as Copy of the board resolution, copy of the latest articles of incorporation and ByLaws, list of directors and principal officers, list of major stakeholders etc are required.
9. For foreign bank subscribers, documents such as Copy of the board resolution, historical background of the bank, copy of latest amended articles of Incorporation and By-Laws, list of major stockholders, list of directors and their citizenship etc.
10. Detailed Plan of Operation and Economic Justification for Establishing the Bank
11. Projected monthly financial statements for the first three (3) years of operations
12. Proposal by each of the subscribers on how they will raise the amount to pay for their proposed paid-up capitalization in the bank.

1. Foreign individuals and non-bank corporations can own or control up to 40% of the voting stock of a domestic bank
2. A Filipino individual and a domestic non-bank corporation can each own up to 40% of the voting stock of a domestic bank.
3. The citizenship of the corporation which is a stockholder of a bank should follow the citizenship of the controlling stockholders of the corporation, irrespective of the place of incorporation.

1. The incorporators/subscribers and proposed directors and officers should be persons of integrity and of good credit standing in the business community.
2. The incorporators/subscribers and proposed directors and officers should not possess any of the grounds for disqualification of directors and officers under existing BSP regulations
3. A bank can be organized with not less than 5 or more than 15 incorporators.
4. The number of members of the board of directors of the bank should not be less than 5 nor more than 15 and should always be in odd numbers and at least 2 of the directors are “independent directors”.
5. At least two-thirds of the members of the board of directors of any commercial bank should be Filipino citizens; at least a majority of the members of the board of directors of any thrift bank should be Filipino citizens; and all members of the board of directors of a rural bank should be Filipino citizens.
6. No appointive or elective public official, whether full-time or part-time, should at the same time serve as officer of a commercial bank or a thrift bank.
7. The proposed directors and officers of the bank should be subject to qualifications and other requirements of existing laws, rules and regulations of the BSP

1. Submit the Articles of Incorporation, Treasurer’s Sworn Statement and By-Laws in 7 copies
2. Deposit with any commercial bank (for commercial banks and thrift banks) and any bank (for rural banks) the initial paid-up capital of the proposed bank.

1. Complete the construction and furnishing of the bank building
2. Effect and complete the recruitment and hiring of officers and employees of the bank
3. Submit all the documentary requirements at least 30 days before the scheduled start of operations
4. File with Central Applications and Licensing Group a request for ocular inspection of the bank premises at least 30 days before the scheduled start of operation.

1. BSP should be informed about the first day of operation and the banking hours and days
2. A Statement of Condition should be submitted as of the first day of operation.

• Within 6 months for commercial and thrift banks
•   Within 8 months for rural banks