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Friday, 19 June 2009

BSP Proposed Changes in Clearing Rules. Chamber of Thrift Banks. General Membership Meeting. Friday, 19 June 2009. Makati Shangri-La Hotel. BSP Proposed Changes in Clearing Rules. Objectives. Minimize/Eliminate BSP Settlement Risk. Level Playing Field for TB and KB.

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Friday, 19 June 2009

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  1. BSP Proposed Changes in Clearing Rules Chamber of Thrift Banks General Membership Meeting Friday, 19 June 2009 Makati Shangri-La Hotel

  2. BSP Proposed Changes in Clearing Rules Objectives • Minimize/Eliminate BSP Settlement Risk • Level Playing Field for TB and KB • Lay Groundwork for Reduction of Float Days

  3. BSP Proposed Changes in Clearing Rules Original BSP Proposal • All Banks to Go on Next Day Value for Clearing Credits • Mandatory Overdraft Clearing Lines Current BSP Proposal • Risk Based Credit Evaluation

  4. BSP Proposed Changes in Clearing Rules Current Clearing Time Highlights

  5. BSP Proposed Changes in Clearing Rules Changes in Clearing Timeline

  6. BSP Proposed Changes in Clearing Rules Impact of Changes • Mandatory PM Funding of Bank DDA Based on Clearing Results of D+0 – Unfunded Bank’s DDA may Result in Unwinding of Bank’s Clearing Items • Incoming Returns (Due to Insufficiency of Customer Funds) will Result in Adjustment of Bank’s DDA of D+0 Done AM of D+1 with Value D+0 Due to Netting Effect of Unfunded Returns

  7. BSP Proposed Changes in Clearing Rules How Changes May Be Accomplished • On Line Operations • Centralization of Clearing Operations in Manila • Use of ECS Data in Early Determination of Unfunded Items • Fast Determination of Thrift Banks NOW Accounts’ Unfunded Items

  8. BSP Proposed Changes in Clearing Rules Implication - Customers • Education on Impact of Changes on Account Handling • Funding of Accounts cannot be on a Catch Up Mode • No Client Selection of which Items to Return • Centralized Clearing will Cut Float Period for Regional and Inter-regional Checks

  9. BSP Proposed Changes in Clearing Rules Implication - Banks • Same Day Clearing Credit for Cir 163 Thrift Banks • Centralized Clearing will Cut Float Period of Regional and Inter-regional Checks • Higher Efficiency in Branch Operations • Credit Implication of Bills Purchase Lines • Time Pressure for Clearing Operations • Treasury Management of Funding Value Dated Returns • Income Implications on Changes in Handling of Returns • Cost Implications on Centralization • Reputational Risk of Unwinding

  10. BSP Proposed Changes in Clearing Rules Target Implementation Date January 31, 2010

  11. BSP Proposed Changes in Clearing Rules Open Forum

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