MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) will impose stricter internal control measures and protocols for the hiring of bank personnel to prevent a repeat of a scandal last year involving the alleged missing funds of Germany’s Wirecard AG.
BSP Governor Benjamin Diokno said the Monetary Board approved the guidelines that aim to strengthen Know Your Employee (KYE) policies and practices, tightening controls related to confirmation of deposit accounts.
The regulator issued Circular 1112 containing the amendments to operational risk management and internal control measures of BSP-supervised financial institutions (BSFIs) under the Manual of Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).
Diokno said the issuance is part of the BSP’s commitment to raise the bar on corporate governance and risk ma-nagement systems to protect the integrity of the financial system.
However, Diokno said aligning BSP regulations with international best practices on KYE procedures is just half the battle.
“The other half depends on the strength of oversight of the board of directors of BSFIs in implementing these policies,” the BSP chief said.
Under the new rules, BSFIs are required to adopt a risk-focused screening process considering sensitivities of certain positions that may require more stringent procedures.
The regulator now requires adequate understanding of a candidate’s personal background and character, conflict of interest, as well as propensity to commit fraud or irregularity shall be considered in the recruitment process.
The revised rules also emphasize the use of BSP records as part of the screening process of banks and financial institutions.