RP may sanction 10 foreign, domestic banks

RP may sanction 10 foreign, domestic banks

MANILA (AFP): The Philippine central bank may suspend the
foreign exchange trading licenses of 10 foreign and local banks
found to be violating rules covering dollar transactions, an
official said Sunday.

The banks were not identified, but central bank deputy
governor Alberto Reyes said the violations of these institutions
helped pull the peso down to a near six-month low last week.

The unit closed at 53.17 to the dollar on Friday. It closed at
53.08 on Thursday, but touched 53.40, its lowest level since
January 19.

"We will impose stricter penalties," Reyes said, adding that
these could be in the form of suspension of licenses for "banks
chronically violating the rules."

Among the violations include a practice by these banks to
"split purchases" below US$10,000, the ceiling allowed by the
central bank for banks to purchase every 15 days without
supporting documents, Reyes said.

"They're selling it to different persons but they have the
same addresses," he said.

The offense carries a fine of 30,000 pesos a day for each
violation, Reyes said. Officials said banks frequently violate
the rule since the earnings on dollar transactions were more than
enough to pay the penalty.

As a result, violations have "become a practice" among several
banks, Reyes said.