MORNBFI Vol. 1 - Planters Development Bank

§§ 4701Q - 4701Q.209.12.31PART SEVENELECTRONIC OPERATIONS AND OTHER SERVICESSection 4701Q Electronic Services. Thefollowing are the guidelines concerningelectronic activities.(Circular No. 649 dated 09 March 2009)§ 4701Q.1 Application. QBs wishingto provide and/or enhance existingelectronic services shall submit to the BSPan application describing the services to beoffered/enhanced and how it fits the QB’soverall strategy. This shall be accompaniedby a certification signed by its president orany officer of equivalent rank and functionto the effect that the QB has complied withthe following minimum pre-conditions:a. An adequate risk managementprocess is in place to assess, control,monitor and respond to potential risksarising from the proposed electronicservices;b. A manual on corporate securitypolicy and procedures exists that shalladdress all security issues affecting itselectronic services, particularly thefollowing:(1) Authentication – establishes theidentity of both the sender and the receiver;uses trusted third parties that verify identitiesin cyberspace;(2) Non-repudiation – ensures thattransactions cannot be repudiated orpresents undeniable proof of participationby both the sender and the receiver in atransaction;(3) Authorization – establishes andenforces the access rights of entities (bothpersons and/or devices) to specifiedcomputing resources and applicationfunctions; also locks out unauthorizedentities from physical and logical access tothe secured systems;(4) Integrity – assures that data have notbeen altered; and(5) Confidentiality – assures that no oneexcept the sender and the receiver of thedata can actually understand the data.c. The system had been tested prior toits implementation and that the test resultsare satisfactory. As a minimum standard,appropriate systems testing and useracceptance testing should have beenconducted; andd. A business continuity planningprocess and manuals have been adoptedwhich should include a section onelectronic services channels and systems.(Circular No. 649 dated 09 March 2009)§ 4701Q.2 Pre-screening of applicantsa. The BSP, thru the Technical WorkingGroup on Electronic Banking, shall pre-screenthe overall financial condition as well as theapplicant-QB’s compliance with BSP rulesand regulations based on the latest availableBank Performance Rating equivalent for QBsand Report of Examination (ROE) includingCAMELS Rating.b. The Working Group shall ensurethat the applicant QB’s overall financialcondition can adequately support itselectronic services that it shall havecomplied with certain comprehensiveprudential requirements such as, but notlimited to, the following:(1) Minimum capital requirement andnet worth to risk assets ratio;(2) Satisfactory solvency, liquidity andprofitability positions;(3) CAMELS composite rating of at least"3", (this rating, however can be flexibledepending on other circumstancesprevailing), and with at least a moderate riskManual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart VII - Page 1