BSP, PDIC Sign MOA to Streamline Cooperation and Supervision of Bank Deposits
by Johanan Devanesan February 22, 2024The Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corporation (PDIC) have updated their cooperative framework through the signing of a Revised Memorandum of Agreement (MOA) on Information Exchange. The event took place at the BSP headquarters in Manila, under the leadership of BSP Governor Eli M. Remolona, Jr. and PDIC President and CEO Roberto B. Tan.
The MOA updates the prior agreements from 2002 and 2004 and expands to serve as an Omnibus Agreement that includes all forms of information, data, and reports exchanged between the two bodies to support their respective and collective missions.
Key enhancements introduced by the revised MOA include the adoption of digital platforms for seamless information sharing, utilising the BSP Electronic Information System (EIS) for efficient data exchange, and rationalising banks’ prudential reporting requirements, thereby reducing duplicative reporting obligations to the PDIC.
Additionally, the agreement includes a mechanism for regular review and updates, ensuring its alignment with the changing needs of supervisory practices. This cooperative effort between the BSP and PDIC is a testament to their commitment to adapt to and address the challenges of a dynamic financial sector, with an overarching goal of ensuring its stability and protecting the interests of the public who are depositing funds, according to the two authorities.
Eli M. Remolona, Jr
The revised agreement reflects the evolving nature of regulatory and supervisory methodologies, transitioning towards a more risk-based and principles-focused oversight. Governor Remolona pointed out the updated MOA is timely.
“We have moved from a very prescriptive examination and supervision style to a risk-based, more principles-based supervision. We do not tell banks specifically what to do. We tell banks to take risks seriously, and that is the reason for all these regulatory standards,”
said the Governor.
Roberto B. Tan
PDIC President Tan highlighted the importance of transparent communication between the BSP and PDIC for a thorough understanding and proactive management of potential risks within the banking system.
“The collaboration between our institutions becomes even more paramount and imperative to protect the depositing public, especially from frauds and scams that have become even more elaborate and complex,”
he added.
Additionally, the agreement includes a mechanism for regular review and updates, ensuring its alignment with the changing needs of supervisory practices. This cooperative effort between the BSP and PDIC is a testament to their commitment to adapt to and address the challenges of a dynamic financial sector, with an overarching goal of ensuring its stability and protecting the interests of the depositing public.
Featured image credit: Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. and Philippine Deposit Insurance Corporation (PDIC) President and Chief Executive Officer Roberto B. Tan shake hands after signing the BSP-PDIC Revised Memorandum of Agreement on Information Exchange on 08 February at the BSP head office in Manila. They were joined by PDIC Vice President and Data Protection Officer Jaromme Zeus Kristoffer C. Castillo I (leftmost) and BSP Director and Data Protection Officer Leo Alfred H. Villarico (rightmost).
