The Bangko Sentral ng Pilipinas (BSP) is proposing new regulations involving the transfer of significant ownership in banks and quasi-banks which will cover good corporate governance in the transaction of shares of stocks.

“The Bangko Sentral recognizes the importance of good corporate governance in ensuring that banks are subject to proper oversight and are soundly and prudently managed,” said the BSP in the draft circular released Tuesday, July 11.

The BSP said the revised regulations on the ownership of shares of stocks in banks and on the qualifications of stockholders should “ensure that only individuals and corporations with beneficial owners who are fit and proper shall be allowed to own voting shares of stock in a bank.”

The draft BSP circular covered fitness and propriety of stockholders wherein a stockholder must be suitable to own the shares of stock of a bank.

The central bank is giving industry players until July 21 to recommend suggestions or give feedback.

Based on the proposed circular, in determining whether a stockholder is fit and proper, the BSP said the stockholder should have integrity and probity, reputation, and financial capacity or financial soundness.

The stockholder must also not have any disqualification issues such as conviction of any crime and no adverse derogatory information of any kind with the BSP.

Also, the BSP said that unless otherwise allowed under the provisions of existing laws, the stockholder should not be an officer or employee of a government agency, instrumentality, department or office charged with the supervision of, or the granting of loans to banks within one year prior to appointment, election or hiring.

Meanwhile, in assessing financial capacity or financial soundness, the BSP said the stockholder must be of good credit standing in the business community and has the financial strength to pay his or her proposed subscriptions in the bank and infuse additional capital when needed.

“Banks shall establish a mechanism to ensure the fitness and propriety of bank stockholders (and banks are) expected to notify the Bangko Sentral of any adverse information on the fitness and propriety of their stockholders that may have a significant impact on the bank’s business or reputation,” said the BSP.

The proposed circular also includes other provisions such as limits of stockholdings in a single bank, transactions involving voting shares of stocks, other foreign equity investment in domestic banks, and regulations on shares of stocks of both banks and quasi-banks.