MORNBFI Vol. 1 - Planters Development Bank

APP. Q-3908.12.31Annex AAggravating and Mitigating Factors to be Considered in the Imposition of Penalty1. Aggravating Factors:(a) Frequency of the commission ofspecific violation – This pertains tocommission or omission of a specificoffense involving either the same ordifferent transaction. This will also refer toa violation which may have been correctedin the past but found repeated in anothertransaction/account in the subsequentexamination.In determining frequency, the numberof times of commission or omission of aspecific offense during the preceding three(3) - year period shall also be considered.The word “offense” pertains to aviolation that connotes infraction ofexisting BSP rules and regulations as wellas non-compliance with BSP/MB directives.(b) Duration of Violations Prior toNotification – This pertains to the length oftime prior to the latest notification on theviolation. Violations that have been existingfor a long time before it was revealed/discovered in the regular examination or areunder evaluation for a long time due topending requests or correspondences fromQBs on whether a violation has actuallyoccurred shall be dealt with through thiscriterion. Violations outstanding for morethan one (1) year prior to notification, at theminimum, will qualify as violationsoutstanding for a long time.(c) Continuation of offense oromission after notification – This pertainsto the persistence of an act or offense afterthe latest notification on the existence ofthe violation, either from the appropriatedepartment of the SES or from theMonetary Board and/or Deputy Governor,in cases where the violation has beenelevated accordingly. This covers theperiod after the final notification of theexistence of the violation until such timethat the violation has been corrected and/or remedied. The corrective action shallbe reckoned with from the date ofnotification.(d) Concealment – This factor pertainsto the cover up of a violation. In evaluatingthis factor, one shall consider the intentionof the party(ies) involved and whetherpecuniary benefit may accrue accordingly.Intention precedes concealment. Theact of concealing an offense or omissioncarries with it the intention to defraudregulators. Moreover, the amount ofpecuniary benefit, which may or may notaccrue from the offense or omission, shallalso be considered under this factor.Concealment may be apparent in caseswhen QB officers purposely complicatesthe transaction to make it difficult touncover or refuse to provide information/documents that would support theviolation/offense committed.In as much as concealment andintention are speculative matters and maybe difficult to establish, appropriate supportof facts or circumstantial evidence in thisfactor shall be considered.(e) Loss or risk of loss to QB – Inassessing this factor, “potential loss” refersto any time at which the QB was in dangerof sustaining a loss.• Substantial actual loss – The QBhas been exposed to a significant loss ofearnings and capital. The volume ofaccounts involved in the loss is substantial/significant in relation to the institution’sQ RegulationsAppendix Q-39 - Page 4Manual of Regulations for Non-Bank Financial Institutions