MANILA, Philippines — The government is finalizing guidelines for implementing simplified procedures for bank mergers, consolidations and acquisitions in the country.
The draft is now in circulation and key stakeholders are allowed to submit written comments by March 11.
The Bangko Sentral ng Pilipinas (BSP) has signed a memorandum of understanding with the Philippine Deposit Insurance Corp. (PDIC), the Securities and Exchange Commission (SEC), the Cooperative Development Authority (CDA) and the Philippine Competition Commission. (PCC) in October last year to streamline procedures for requests for mergers, consolidations and acquisitions of banks.
This is part of the government’s drive to promote the ease of doing business in the country to attract more foreign investors.
The Anti-Red Band Authority (ARTA) welcomed the initiative.
As part of the deal, regulators agreed on a harmonized list of requirements for bank merger, consolidation and acquisition proposals, halving the number of documentary requirements from 58 to 30.
Likewise, synchronized turnaround times and the elimination of duplicate functions between the agencies involved would significantly reduce the total processing time to just 55 from an average of around 160 working days.
Under the proposed guidelines, the BSP has five days to confirm receipt of merger, consolidation, and acquisition applications from the lead proposing bank.
The next stage is the evaluation in which all signatories of the MoU have seven days from receipt to inform the proposing banks of the completeness of the documents submitted.
The proposing banks then have 15 calendar days to comply with the breach observed, subject to a non-extendable period of five calendar days upon written request.
The CCP determines whether the proposed merger, consolidation or acquisition transaction is not subject to notification or whether the proposing banks must file a notification in which the 55-day period is not applicable.
The PDIC assesses whether the transaction complies with the PDIC charter and other regulations, while the BSP assesses the viability of business plans, as well as compliance with banking laws and central bank regulations.
On the other hand, the SEC examines whether the proposing banks comply with the revised corporate code, as well as applicable rules and regulations, while the CDA examines the transaction in terms of compliance with the Philippine Cooperative Code of 2008.
“Branches have a total of 55 working days to process the application for merger, consolidation, acquisition, from the date of receipt by the main proposing banks of the last notice of complete offer issued by one of the agencies,” reads the draft circular.