Financial Allied Undertakings in Foreign Exchange

Universal Banks (UBs)

• Can invest in insurance companies and holding companies, provided that the investment of such holding company are confined to the equities of allied undertakings and/or non-allied undertakings of the UB's allowed under BSP regulations.

Departmentalization in Banking

• Departments in a bank may include:
  • Cash Department: handles deposit function, new accounts, signature controls, safe deposit boxes, and armored car services.
  • Loan and Discount Department: handles loans, bank credit investigation, re-discounting, statistics, loan releases, renewals, and collections.
  • Trust Department: handles fiduciary activities, legal work, and lawyer's tasks.
  • Foreign Department: handles international exchange transactions, applications for letters of credit, buying and selling foreign exchange, and similar transactions.
  • Accounting Department: handles all bank transactions, bookkeeping, proof sheets, financial statements, and other accounting procedures.

Bank Assets and Liabilities

• Other Cash Resources:
  • Exchanges for the clearing house: checks deposited at or cashed by the bank preparing the statement during the course of the day, drawn on banks within the city that are members of the clearing house.
  • Collections in transit: "out-of-town" checks or drafts drawn on banks outside the city, credited to the depositor's account pending receipt of the proceeds.
  • Other Cash items: bond coupons, claims against non-member banks.
• Due from Bank: deposits carried with other banks, usually in the form of demand deposit.
• Balances with Foreign Banks: deposits or funds held abroad, mainly to fill foreign exchange needs.
• Loans and Discounts: promissory notes and bills of exchange held by the bank, evidencing debt or securing a debt.

Regulatory Framework

• Authority to Regulate Electronic Transactions: Bangko Sentral has the authority to regulate electronic transactions, devices, and processes used by banks, quasi-banks, or trust entities.
• Financial Statements: banks, quasi-banks, or trust entities must submit financial statements to the Bangko Sentral, showing the actual financial condition of the institution.
• Publication of Financial Statements: banks, quasi-banks, or trust entities must publish a statement of their financial condition at least once every quarter in a newspaper of general circulation or post in public places.