MORNBFI Vol. 1 - Planters Development Bank

§§ 4256Q.5 - 4277Q08.12.31adopted in the calculation of the two percent(2%) statutory reserve requirements for repoagreements covering government securities.d. Deposit substitutes evidenced byrepo agreements covering governmentsecurities in excess of the adjustedTier 1 capital shall be treated as regulardeposit substitutes and shall be subject tothe regular statutory and liquidity reserverequirements under existing regulations.Sec.4257Q (2008 - 4246Q.3) ReserveDeficiencies; Sanctionsa. Whenever the reserve position ofany QB computed in the manner specifiedin Sec.4256Q is below the requiredminimum, the QB concerned shall pay theBSP one-tenth of one percent (1/10 of 1%)per day on the amount of the deficiencyor the prevailing ninety-one (91)- day T-Bill rate plus three (3) percentage points,whichever is higher: Provided, however,That the QB shall be permitted to offsetany reserve deficiency occurring one (1)or more days of the week covered by thereport against excess reserves which itmay hold on other days of the same week,and shall be required to pay the penaltyonly on the average daily net deficiencyduring the week.In case of abuse, the QB shallautomatically lose the privilege of offsettingreserve deficiency in the aforesaid manneruntil such time that it maintains its dailyreserve position at the required minimumfor at least two (2) consecutive weeks.As used in this Section, abuse in theprivilege of offsetting reserve deficienciesagainst excess reserves shall mean havingreserve deficiencies occurring four (4) ormore times during any given week for two(2) consecutive weeks, whether or notresulting in net weekly deficiencies.b. In cases where the QB has chronicreserve deficiency on deposit substituteliabilities, the Monetary Board may (1) limitor prohibit the making of new loans orinvestments by the QB concerned; (2)prohibit the declaration of cash dividends;and/or (3) impose such other sanctions, asit may deem necessary. The board ofdirectors of such QB shall be notified ofsuch chronic reserve deficiency and thepenalties therefor, and shall be required toimmediately correct the reserve position ofthe QB.As used in this Section, thefollowing terms shall have the followingmeanings:Chronic reserve deficiency shall meanhaving net reserve deficiency for two (2)consecutive weeks.New loan and new investment shallrefer to any loan and any investmentinvolving disbursement of funds.c. Fines on legal reserve deficiencieson deposit substitute liabilities shall bepaid by the QB in accordance with Sec.4902Q: Provided, That where the creditbalance of the QB's demand depositaccount (DDA) with the BSP is insufficientand it fails to settle the assessment withinfifteen (15) days from receipt, theMonetary Board may limit or prohibit themaking of new loans or investments bythe QB.I. (RESERVED)Secs. 4258Q - 4269Q (Reserved)J. BORROWINGS FROM THEBANGKO SENTRALSec. 4270Q (2008 - 4276Q) RepurchaseAgreements with the Bangko Sentral. Repoagreements with the BSP under its openmarket operations (OMOs) shall begoverned by the provisions of Subsec.4601Q.1.Secs. 4271Q - 4277Q (Reserved)Q Regulations Manual of Regulations for Non-Bank Financial InstitutionsPart II - Page 12