MANILA – The Bangko Sentral ng Pilipinas (BSP) has removed the reserve requirement on Specialized Institutional Accounts under Trust currently maintained by local lenders.
“The Monetary Board approved the amendment to existing regulations on Trust and Other Fiduciary Account–Others to include Specialized Institutional Accounts under Trust (SIT) among the accounts that are exempt from reserve requirements,” the central bank said Thursday.
SITs are accounts established by institutions, foundations, agencies – whether government or private such as non-government offices – registered either with the Securities and Exchange Commission or the Cooperative Development Authority.
These are usually for charitable, religious, educational, athletic, scientific, medical, cultural, specialized lending, or development projects.
The reserve requirement is the amount of cash a bank must hold in reserves against clients’ deposits.
Specialized Institutional Accounts under Trust of universal and commercial banks were mandated to set aside 16 percent as reserve requirement, while such accounts in thrift banks were required to set aside 8 percent, and in rural banks were require to place 4 percent in reserves.
Bangko Sentral governor Nestor Espenilla Jr. wanted to trim the reserve requirement ratio to less than 10 percent. (GMA News)