Bank Accreditation Process Flow

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Bank Accreditation Process Flow
Multiplying partnerships and synergizing for SME
financing
Process flow for web/Rperez/Aug. 28,
2006/SBGFC/PDMU
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An evaluation system that banks must undergo to
obtain an accreditation status and an Omnibus
Credit Line (OCL) under SBCs Wholesale Lending
Program

• Bank accreditation

• Once accredited, the bank shall also be granted
  an automatic access to SBCs Credit Guarantees
  Program as an incentive

• For banks that intend to utilize only the SBC
  Credit Guarantees, a simplified accreditation
  process is provided under SBC Circular 180,
  Series of 2006 (Please click the
  related link, SBC Circulars 2006)

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Bank accreditation is a two-phased process
Pre-qualification and Evaluation Proper-The
Evaluation Proper has two aspectsQuantitative
and Qualitative Aspects

• Bank accreditation

• Bank accreditation has four modes

• Simplified accreditation for banks interested
  only in SBC Credit GuaranteesRegular
  accreditation modeFast-track modeSULONG
  accreditation mode for thrift and rural banks

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Universal bankCommercial banksSavings and
mortgage banksPrivate development banksStock
savings and loan associations Cooperative
banksRural banksFinancing and leasing
companies

• Financing institutions that may
• apply for accreditation

So long as it presently engages in small and
medium enterprise (SME) on-lending
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Documentary requirements

• Simplified accreditation for banks
• interested only in Credit Guarantees 1st of 4

• BSP CAMELS Rating of at least 3.0Risk-based
  Capital Adequacy Ratio of at least 10 on solo
  basis (head office and branches)Past due rate of
  not higher than SBCs ceiling of 20Positive net
  income for the past two yearsA specialized
  lending unit to handle and monitor SBC guaranteed
  accounts

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Documentary requirements

• Simplified accreditation for banks
• interested only in Credit Guarantees 1st of 4

• BSP CAMELS Rating of at least 3.0A specialized
  lending unit to handle and monitor SBC guaranteed
  accounts

• Past due rate of not higher than SBCs ceiling of
  20

• Risk-based Capital Adequacy Ratio of at least 10
  on solo basis (head office and branches)

• Positive net income for the past two years

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After a year, the PFI must comply with SBCs
review criteria

• Simplified accreditation for banks
• interested only in Credit Guarantees

• Latest BSP CAMELS Rating of at least 3.0

• Positive net income for the latest fiscal year
  and most recent past two quarters

• Past due rate of not higher than SBCs ceiling of
  20

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After a year, must comply with SBCs review
criteria

• Simplified accreditation for banks
• interested only in Credit Guarantees

• Guarantee calls paid to the PFI must not
  constitute more than 30 of SBCs cumulative
  guarantee paid amount since 2002 or the PFIs
  claims ratio must not exceed 4 (Claims ratio
  defined as banks total guarantee paid accounts/
  total contingent liability, whichever is less
  stringent at the time of annual performance
  review)

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Documentary requirements

• Regular Accreditation Mode 2nd of 4

• Latest BSP Report on bank general examination,
  reflecting the banks composite CAMELS Rating of
  at least 3.0

• Board Resolution to participate in SBC Wholesale
  Lending Program, showing likewise the banks
  authorized signatories with their specimen
  signatures and CTC Nos.

• Consolidated Statements of Condition, and of
  Income and Expenses for the last three (3) years
  and latest fiscal year (as submitted to BSP or
  with BSP stamp Received)

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Documentary requirements

• Regular Accreditation Mode 2nd of 4

• Report of Compliance with BSP General and
  Specific Loan-Loss Provisioning Requirements
  as of latest end-quarter or as of end-Dec. of
  past year (with BSP stamp Received)

• Report of Compliance with the Mandatory Credit
  Allocation for SMEs (with BSP stamp Received)

• Report on DOSRI Loans, reflecting compliance with
  Ceilings for both on Secured and Unsecured DOSRI
  Loans (with BSP stamp Received)

• Historical background of the bank, such as year
  of establishment, equity investments, corporate
  milestones, strategic directions and branch
  network

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Documentary requirements

• Regular Accreditation Mode 2nd of 4

• List of Key Officers and Members of the Board
  with their respective personal data sheets as
  submitted to BSP for Stockholders, the
  corresponding shareholdings and percent of
  shareholdings or amount of shares paid up must be
  reflected

• SEC-approved Articles of Incorporation and
  By-Laws, including its amendments, if any

• BSP-computed Risk-based Capital Adequacy
• Ratio (with BSP stamp Received)

• Table of Organization showing special lending
  unit or list of personnel to handle SBC
  programs

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• Regular Accreditation Mode 2nd of 4

• There are two aspects of evaluation
• Quantitative (Financial)

• Qualitative (Management quality and Compliance
  with regulatory and industry standards)

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• Qualitative (Management quality and Compliance
  with regulatory and industry standards)

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Available only to banks with Composite CAMELS
Rating of 4.0 based on latest BSP bank general
examination

• Fast-track Accreditation Mode 3rd of 4

Fast-track Criteria
Requirements

• Very good financial condition

Latest BSP Report of General Bank Exam must show
a composite CAMELS Rating of 4
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• Fast-track Accreditation Mode 3rd of 4

Fast-track Criteria
Requirements

• Strong intent to participate in SME wholesale
  lending program

Board resolution to participate in SBC Wholesale
Lending Program with Authorized Signatories that
shows their specimen signatures and CTC Nos.

• Profitable operations

Consolidated Statements of Condition, and
Income Expense as of Dec. 31, 2005 and past two
years
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Alternative Modes of Compliance with the
Composite CAMELS Rating of 4 Requirement

• Certificate of bank ranking in terms of assets,
  as issued by an industry association

• Certificate of bank ranking in terms of capital,
  as issued by an industry association

• Certificate of bank accreditation with other
  specialized lending programs with credit
  information specified (type/ name and amount of
  credit facility, latest outstanding balance of
  loan, status and maturity date of line/ loan)

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Documentary requirements

• SULONG Accreditation Mode for Thrift
• and Rural Banks 4th
  of 4

• CAMELS Rating should be at least "3.0"

• Past due loans and items in litigation is not in
  excess of the industry average plus 2 but not to
  exceed 25 (based on latest quarterly report of
  BSP). A five year transition period is granted
  to banks with past due rate in excess of industry
  average plus 2 for compliance with the standard.

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Documentary requirements

• SULONG Accreditation Mode for Thrift
• and Rural Banks 4th
  of 4

• Not deficient in required Loan-Loss Provisioning
  or Reserves

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Documentary requirements

• SULONG Accreditation Mode for Thrift
• and Rural Banks 4th
  of 4

• Ratio of accrued interest receivables to surplus
  (free) plus undivided profits is less than 100

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For bank accreditation purposes, please contact
MS. MA. TERESA B. LACAP, PLANNING OFFICER IV
_at_751-1888 LOCAL 1708 OR 1743 or by e-mail to
mlacap_at_sbgfc.org.ph AND/ OR MS. LOURDES ROSARIO
M. BAULA, SENIOR ACCOUNT MANAGEMENT SPECIALIST
_at_751-1888
LOCAL 1732 or by e-mail to lmedel_at_sbgfc.org.ph
Process flow for web/Rperez/Aug. 28,
2006/SBGFC/PDMU