| Inter Bank Call Loan |
| Product Definition |
The Inter Bank Call Loan market is a system that permits banks with excess reserves over the required position for the day to lend out the same excess to reserve deficient banks.
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Features:
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| Participants | : | Bangko Sentral ng Pilipinas, banks and quasi-banks |
| Term | : | One day although at times the term exceeds more than one day |
| Tax feature | : | Interest income with maturities of 5 days or less are deemed
taxable and subject to prevailing corp. tax rate.
Interest income with maturities of more than 5 days are subject to 20% final withholding tax |
| Type of income | : | Subject to tax feature |
| Interest computation | : | Simple interest/Add-on |
The borrowing institution is required to put up reserves equivalent to one percent (1%) of the borrowed principal. This reserve requirement is applicable for all types of IBCL transactions.
Borrowing IBCL transactions with the BSP require the borrowing party to earmark securities as collateral in the ROSS account with the Bureau of Treasury. Alternately, lending with the BSP requires the BSP to earmark securities with an equivalent face value of the amount borrowed. IBCL transactions between banks and quasi-banks are on a clean basis.
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