MORNBFI Vol. 1 - Planters Development Bank

of the BSP to determine compliance withlaws and regulations. It shall includedetermination that the institution isconducting its business on a safe and soundbasis. Examination requires full andcomprehensive looking into the operationsand books of institutions, and shall include,but need not be limited to, the following:(1) Determination of the QB’s solvencyand liquidity position;(2) Evaluation of asset quality as wellas determination of sufficiency of valuationreserves on loans and other risk assets;(3) Review of all aspects of QBoperations;(4) Assessment of risk managementsystem, including the evaluation of theeffectiveness of the QB management’soversight functions, policies, procedures,internal control and audit;(5) Appraisal of overall management ofthe QB;(6) Review of compliance withapplicable laws, rules and regulations;and(7) Any other activities relevant to theabove.Regular or periodic examination shallbe done once a year, with an interval oftwelve (12) months from the last datethereof. Special examination may beconducted earlier, or at a shorter interval,when authorized by the Monetary Board byan affirmative vote of five (5) members.In the full exercise of the supervisorypowers of the BSP, examination by the BSPof institutions shall be complemented byoverseeing thereof. In this regard, the termoverseeing shall refer to a limitedinvestigation of an institution, or anyinvestigation/s that is limited in scope,conducted to inquire into a particular area/aspect of an institution’s operations, for thepurpose of overseeing that laws andregulations are complied with, inquiringinto the solvency and liquidity of theinstitution, enforcing prompt correctiveaction, or such other matters requiringimmediate investigation: Provided, That(i) specific authorizations be issued by theDeputy Governor, SES, and (ii) periodicsummary reports on overseeings made besubmitted to the Monetary Board.(Circular No. 442 dated 20 July 2004)ii