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Manila Bulletin devider Business devider Banking & Finance devider BSP seeks to terminate banks' RTGS access over violations, closures

BSP seeks to terminate banks' RTGS access over violations, closures

Published Dec 8, 2025 03:16 pm

At A Glance

  • The Bangko Sentral ng Pilipinas (BSP) is seeking to permanently terminate banks' access to the peso Real-Time Gross Settlement (RTGS) payment system for reasons such as serious violations, closure of operations, or mergers.
The Bangko Sentral ng Pilipinas (BSP) is seeking to permanently terminate banks’ access to the peso Real-Time Gross Settlement (RTGS) payment system for reasons such as serious violations, closure of operations, or mergers.
However, the central bank will not permanently deactivate a participant’s RTGS account if it is placed under insolvency, bankruptcy, or rehabilitation—a situation that may instead warrant a suspension.
According to the BSP’s latest draft circular, termination from the RTGS payment system severs a participant’s access to the system when they file for voluntary withdrawal. The central bank will decide on the approval of the participant’s formal exit.
Voluntary withdrawal occurs when a participant formally exits the payment system, including surrendering its secondary license, such as a banking license.
Participants facing ongoing disciplinary proceedings under the Manual of Regulations for Payment Systems (MORPS) “shall not be allowed to proceed with its formal application for withdrawal of participation in the payment system.”
Additionally, the BSP seeks to remove accounts that breach existing regulations. This case, called involuntary withdrawal, occurs when a participant is permanently removed from the RTGS system after final disciplinary penalties under BSP rules.
Termination can also result from closure of operations or mergers and consolidations of participating entities.
Meanwhile, the BSP proposes to suspend a participant’s access to the payment system in the event that disciplinary penalties for the erring participant have been made final.
If they are also notified that they have been placed under insolvency, bankruptcy, or rehabilitation proceedings, a suspension could follow.
“Such preventive suspensions are applied when the central bank determines that temporary restriction is necessary to mitigate risks or safeguard the interests of other participants while underlying issues are addressed,” the draft circular read. Participants are given until Dec. 12 to provide their feedback.
“The BSP shall restore access or re-activate the accounts when it has determined that the risk being addressed has already been managed,” it noted.
The RTGS payment system processes large-value transactions, such as interbank transfers, immediately and individually without delays.
As of Oct. 31, there are 255 peso RTGS payment system participants, including 44 universal and commercial banks, 35 thrift banks, 124 rural and cooperative banks, six digital banks, five non-banks with quasi-banking functions (NBQBs), five non-bank electronic money issuers (EMIs), and 36 government agencies, financial market infrastructures (FMIs), clearing switch operations (CSOs), and BSP units or branches.
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