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Unsafe or Unsound Banking in Relation to Bank Failure Back-to-Back with Impact of the AFASA (Anti-Financial Accounts Scamming Act) Bill in the Banking Industry

Dear Colleagues in the Banking and Financial Services Community in Metro Manila, South Luzon, Visayas and Mindanao,

As part of the upcoming BAIPHIL Week, the Legal and Regulatory Committee (“LRC”) of the Bankers Institute of the Philippines (“BAIPHIL”) is planning to hold its fourth (4th) LRC Forum on March 7, 2024 (Thursday, 1:00 PM – 2:30 PM), online via Zoom, on the topic “Unsafe or Unsound Banking in Relation to Bank Failure”. The onsite venue will be in the BSP-North Luzon Regional Office, No. 14, Loakan Road, Loakan-Apugan, Baguio City.

On the other hand, the Governance, Legal and Compliance Course Committee (GLC) of BAIPHIL is offering for the first time a talk on a pending bill which will soon become a law — “Impact of the Anti-Financial Accounts Scamming Act (AFASA) Bill in the Banking Industry” on the same afternoon of March 7, 2024, after the aforementioned LRC forum.

It is of great importance to deeply understand the intricacies, legal issues, and consequences of conducting business in an unsafe or unsound manner. Unsafe or unsound banking may have a significant effect on the safety, stability, liquidity or solvency of banks, its depositors, creditors, investors, stockholders, BSP and the public in general. Consequently, in a number of cases, the commission of unsafe or unsound banking usually leads to failure or closure of banks.

On the other hand, the AFASA bill prohibits and punishes financial crimes such as acting as money mule, performing social engineering schemes and committing economic sabotage. The proposed bill includes a limited authority of BSP to examine and investigate financial accounts, e-wallets and other financial accounts that are involved in the prohibited acts, and shall be exempt from the existing bank secrecy laws as well as data privacy laws in order that the law enforcers like BSP, PNP and NBI can gather sufficient information for the investigation. Additional enhancements taken from international best practices in protecting consumer rights are also included in the AFASA bill.

We have invited our very own GLC Chairperson, BAIPHIL and LRC Member, Senior Assistant Governor and General Counsel Elmore O. Capule and Deputy Director Joseph Salud of the Bangko Sentral ng Pilipinas (BSP), BAIPHIL, LRC and GLC member, as Resource Speakers in these back-to-back offerings of LRC and GLC of BAIPHIL.

In order to have a productive discussion with our Resource Speakers in this LRC forum and GLC talk, you may want to share your concerns or challenges that you and your respective Institutions are facing with the following:

a. implementation of avoiding the prohibited Unsafe or Unsound Banking Practices which may cause the failure or closure of banks; and
b. the dilemma of encountering legal and operational issues when the AFASA bill becomes a law.

Your questions will have priority in said LRC forum and GLC talk.

Please email and indicate your particular issues or questions at on or before February 29, 2024 (Thursday).

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