BSP sets guidelines on disqualification of erring pawnshop executives

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has laid down the guidelines on the qualification, disqualification, and watchlisting of directors and officers of pawnshops as part of efforts to weed out erring individuals from the industry.

BSP Deputy Governor Nestor Espenilla Jr. issued Memorandum 2017-003 laying down the central bank’s operational guidelines on the supervision of pawnshops.

The guidelines disqualifies persons who have been convicted by final judgment of a court for offenses involving dishonesty or breach of trust such as estafa, embezzlement, extortion, forgery, malversation, swindling, theft, robbery, falsification, bribery, and anti-graft corruption.

Persons sentenced to a maximum imprisonment term of more than six years as well as those convicted for violation of banking laws and those found culpable for a closure of a financial institution are permanently disqualified from becoming director, trustee, officer, or employee of pawnshops.

On the other hand, persons who refuse to fully disclose the extent of their business interest or any material information to the appropriate supervising and examining department are temporarily disqualified from serving pawnshops.

Likewise, directors who have been absent or who have not participated in more than 50 percent of all meetings are also temporarily disqualified as well as those who are delinquent in the payment of their obligation.

Espenilla said the board of directors or trustees and management of every pawnshop should be responsible for determining the existence of the ground for disqualification of the pawnshop’s directors/trustees/officer or employee and for reporting the same to the BSP.

While the concerned pawnshop may conduct its own investigation and impose appropriate sanction/s as are allowable, he explained this should be without prejudice to the authority of the Monetary Board to disqualify a pawnshop director/trustee/officer/employee from being elected or appointed as director/trustee/officer in any financial institution under the supervision of the BSP.

He added grounds for disqualification made known to the institution should be reported to the appropriate department of the SES of the BSP within 72 hours from knowledge.

To provide the BSP with a central information file to be used as reference in passing upon and reviewing the qualifications of persons elected or appointed as directors/trustees or officer of an institution under the supervisory and regulatory powers of the BSP, the central bank’s Supervision and Examination Sector would maintain a watchlist of permanently and temporary disqualified directors/trustees/officers.