The Philippine Deposit Insurance Corp. (PDIC) is pushing for eight proposed amendments on banking receivership and liquidation to the Bangko Sentral ng Pilipinas (BSP) charter.

PDIC President Jose C. Nograles said these proposals are consistent with the new PDIC law which was approved last May. He said these amendments will increase BSP’s capability to regulate and supervise banks and allow it “greater flexibility to deal with distressed institutions.”

PDIC has put in eight proposals in support of the BSP charter amendment which will strengthen co-regulations, especially in dealing with bank closures and receiverships. These are:

*Express recognition of authority of the receiver to transfer or dispose closed bank’s assets without the consent or approval of stockholders for the purpose of rehabilitating the bank.

*Authority of the receiver to prescribe terms and conditions of rehabilitation, and qualifications of parties seeking to rehabilitate the bank.

*Extendible receivership period (90 days).

*Bank dormancy as additional ground for receivership.

*BSP and PDIC approval on transfers or acquisitions of shares of banks that affect majority ownership and/or control.

*Same authority as BSP to examine deposit accounts.

*Authority for PDIC to organize, establish and operate bridge banks.

*Inclusion of banking franchise or license as a closed bank asset.

PDIC said the proposal to allow the receiver to transfer assets without shareholders’ nod refers to interests that do not represent proprietary rights to specific assets or properties of the bank.

Removing this requirement will speed up rehabilitation, PDIC explained. It will also enable any rehabilitation efforts especially with strategic third parties to proceed smoothly.

Allowing PDIC to determine rehabilitation program will also strengthen the receivership role as well as ensures the fit and proper management of banks concerned. The proposal that will allow transfers of acquisitions of controlling shares was included specifically to allow BSP and PDIC to determine accountability for bank failure.

“BSP has the full support of the PDIC,” Norgales said. “The financial crisis taught us that a strong and effective regulatory framework over banks is crucial to the stability of the financial system. (This) will contribute to maintaining public trust and confidence in the banking system.”