REGULATIONS & SUPERVISIONS OF

FINANCIAL INSTITUTIONS
PRESENTED BY:
DUASO, GRACE ANN
BANGKO SENTRAL NON-BANK FINANCIAL
SERVICES THE BANKING INSTITUTIONS
Non-bank financial institutions (NBFIs) are financial institutions that do
not have a full banking license but they facilitate bank-related financial services,
i.e., investment, risk pooling, contractual savings and market brokering. Only
NBFIs with quasi-banking functions (NBQBs) and those without quasi-banking
function but are subsidiaries and affiliates of banks and NBQBs are subject to
BSP supervision.
NBQBs are financial institutions authorized by BSP to borrow funds
from 20 or more lenders for their own account through issuances, endorsement
or assignment with recourse or acceptance of deposit substitutes for purposes of
re-lending or purchasing receivables and other obligations
BANGKO SENTRAL REGULATES NON-BANK
FINANCIAL INSTITUTIONS
• Investment houses
• Investment companies
• Financing companies
• Securities dealers and brokers
• Non-stock savings and loan associations
• Lending Investors
• Pawnshops
• Building managers for retirement, provident and pension funds
SUPERVISION AND REGULATION DISTINGUISHED
Supervision is broader in scope and character than regulation,
because the former seeks to look into the details of operations, activities, and
performance of a particular financial institution as they affect private and public
interests. Supervision also intends to determine the soundness of operations
and the ability of the financial institution to meet its obligations to creditors upon
proper demand when due.
Regulation refers to the issuance of rules of conduct or the
establishment of modes or standards of operation for uniform application to all
financial institutions or functions covered.
 TYPES OF EXAMINATIONS
• General or regular examination
• Special or interim examination
• Special investigation
 PURPOSE OF SUPERVISION AND REGULATIONS
• To ensure full compliance with laws, rules, and regulations affecting the
operations and activities of financial institutions.
• To ensure that the financial institutions being supervised and regulated are
operating on a sound financial basis
• To act as guardian of depositors
• To protect the interest of other creditors of financial institutions
• To protect the interest of the government’s investments
• To ensure the stability and solvency
 EFFECTIVENESS OF SUPERVISION AND
REGULATION
The supervisory and regulatory agencies of the
government, like the Bangko Sentral, Securities and
Exchange Commission (SEC), and other offices, are
putting into gear time and effort in order to ensure the
effectiveness of supervision and regulation of financial
institutions on a continuing basis.
 BENEFITS OF BANK SUPERVISION
• Prevention of over-expansion or under-expansion of
money and credit through a system-wide monopoly or
through excessive competition
• Elimination of local monopoly
• Protection of depositors against the consequences of
bank failures.