BSP seeks banks’ compliance to managing operational risks

The Bangko Sentral ng Pilipinas (BSP) reminded yesterday banks and financial institutions on managing operational risks through stricter internal controls as well as rotation of employees. BSP Deputy Governor Chuchi Fonacier said banks should comply with Circular 900 issued in 2016 pertaining to the guidelines on operational risk management.

Rotation of people
“We already issued the Circular 900 on the operation risk. But in our engagement with the bank, we will surely touch on these things and put emphasis on the rotation of people or double controls,” she said.
Fonacier said the BSP regularly conducts examinations on the compliance of banks with various regulations. “Actually in our interaction with he banks there’s always a reminder about managing the risk. One of them is pertaining to this one – operations risk. It’s a continuing thing to engage the bank regarding their risk management, especially now that there’s an ongoing examination,” she said.
Operational risk
Operational risk refers to the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk. Metropolitan Bank and Trust Co. (Metrobank) could be held liable for an internal fraud involving alleged loans amounting to as much as P2.5 billion.
“For this scenario, there may be because how come that person was able to do it. There is that possibility.
Source: Lawrence Agcaoili (The Philippine Star)