Bank Asks You to Update Corporate KYC or Face Restrictions: What to Do

Read the notice for three things: the deadline, the consequence, the list

The most common mistake with a bank's "please update your company information" notice is to treat it as routine mail and leave it. These notices usually come from the bank's periodic customer due diligence: under anti-money-laundering rules, banks must regularly confirm that a customer's identity, ownership, business and source of funds are still accurate. If the company does not respond, the bank cannot show it has done its job, and restricting the account is often how it protects itself. So on the day the notice arrives, read it for three things.

First, the deadline and the channel. Is it a letter, an email, an online-banking message or a call from your relationship manager? The deadline is whatever the bank states in writing; if the request was verbal, ask for a written list. Second, the consequence. Notices usually say what happens if you do not update: some transactions suspended, deposits allowed but withdrawals blocked, online banking disabled, or the account moved towards closure. The heavier the consequence, the earlier you should talk to the bank. Third, exactly what is required. Some banks want a single update form; others attach a long document list or ask about specific transactions. Copy each item into a table and mark it "have it", "need to obtain" or "cannot obtain".

Check that the notice is genuine. Confirm through the branch number or relationship manager contact you already hold, do not upload files through a link in an email, and do not send company documents to an unfamiliar address. Impersonating a bank to collect documents is a common scam; for the related risk of a hijacked company mailbox, see business email compromise: what to do.

What banks commonly ask to update: a checklist

Banks differ and the list you received is the one that counts. The items below are common, so you can check yourself in advance and spot the gaps early.

Registration documents: SEC certificate and articles, the latest General Information Sheet (GIS), the mayor's permit and the BIR certificate of registration. What the bank cares about most is whether these are current and consistent with each other. Ownership: the stock and transfer book or shareholder list with percentages, and identity details of the ultimate beneficial owners. The SEC has in recent years required companies to declare beneficial ownership in the GIS, and banks often compare against it. Where shares are held through an overseas company, banks will ask you to trace each layer up to natural persons. People: valid identity documents of directors, officers and authorised signatories (for foreigners usually a passport plus proof of status in the Philippines), and the latest signatory resolution with Secretary's Certificate.

Business and financials: the latest audited financial statements, a description of the business (what you sell, to whom, where money comes from and goes), sample contracts or invoices, and proof of address. Transaction explanations: if the bank is also asking about particular transactions, supply the contract, invoice, customs entry or payment explanation for each one.

When checking, watch for two words: "expired" and "inconsistent". An expired permit or passport, directors on the GIS who no longer serve, or an address that changed without an update are the main reasons submissions are returned. For why banks close corporate accounts and what they care about most, see when the bank closes your corporate account.

The items that are hardest to supply, and how to unblock them

Most companies get stuck not because there are many documents but because one or two simply cannot be produced. These are the usual ones.

The GIS does not match reality. Directors, officers or shareholders changed long ago but nothing was reported to the SEC. The GIS the bank pulls will not match your resolution, and the bank will ask you to fix it first. Report the change to the SEC first, then give the updated records to the bank; never produce a document for the bank that contradicts the SEC file. See how to change company details with the SEC, and if the GIS is stuck because the corporate secretary has vanished, see when the corporate secretary or treasurer cannot be reached.

Annual reports or audited statements were never filed. Tell the bank honestly where things stand, provide a progress letter from your accountant and catch up as fast as possible; the consequences of late filing are covered in what happens when the AFS is filed late. Beneficial owners are overseas. Their identity documents may need notarisation and authentication, which takes time, so start early and give the bank what you already have.

The signatory has already left. If the update reveals that an authorised signatory left long ago, change the signatory together with the update, or the bank cannot accept anything you sign; see when a bank signatory leaves and the account is locked. The business is hard to explain. A new line of business, a changed payment model or large third-party payments all need a written explanation and supporting documents, and the earlier you volunteer them the better.

If you cannot make the deadline: how to talk to the bank

Missing the deadline is manageable. Silence is not. In periodic reviews banks usually care more about whether the customer is cooperating than whether every paper arrived at once. Talking to the bank before the deadline often buys time.

In practice: first, before the deadline, reply in writing (an email copied to your relationship manager is enough) listing the documents you have, the ones in progress and when you expect them, with the reason, for example "GIS update filed with the SEC; will submit once received". Second, submit what you have now rather than waiting to send everything together. A staged submission is itself evidence of cooperation. Third, ask the bank to confirm in writing whether it will allow extra time and whether the account remains fully usable during that time.

If the bank still restricts some functions, ask exactly what is restricted and what it takes to lift it, and set up a back-up account in parallel so that wages, taxes and critical suppliers are not affected. Opening a second account is covered in the complete guide to opening a corporate bank account.

Two things to avoid absolutely. Do not forge, alter or "borrow" documents, such as another company's statements or an expired permit with a new date. If discovered, the consequences are far worse than a delay and may trigger account closure and a suspicious-transaction report. Do not accept an intermediary's offer to "take care of the bank". A bank's compliance review is not something personal connections can settle, and that kind of offer is itself a warning sign.

Already restricted: how to recover, and when to move banks

If the deadline has passed and the account is restricted, work in this order: get clarity, complete the file, then decide whether to move.

Get clarity. What exactly is restricted: withdrawals only, online banking only with counter service still available, or everything? Which documents lift it, which unit reviews them, and how long the review takes once complete. Ask the relationship manager to put this in writing. Distinguish a bank's own risk restriction from a freeze or garnishment ordered by a court, the anti-money-laundering authority or the tax authority, which follows a completely different path; see freezes and garnishments of corporate accounts explained.

Complete the file. Submit everything at once with a one-page cover note that maps each document to the bank's request, explains the earlier delay and states what has changed, for example that a named person now owns bank updates. This passes review more easily than a pile of papers.

Decide whether to move. If, after a complete submission, the bank still ends the relationship or keeps the restriction in place for a long time, shift your focus to an orderly move of funds and payments: confirm how the balance will be released, deal with cheques and auto-debits in transit, and tell customers about the new account. The order of priorities is set out in when the bank closes your corporate account. The new bank will run its own due diligence, and the file you just assembled will be useful there. Keep copies of every letter and submission from this episode: if a future bank asks why the previous relationship ended, a clear paper trail showing that you cooperated is the best answer you can give.

Making the next review easy, and how Yixing can help

Periodic reviews will not go away, but they can become painless. First, keep a bank file: SEC certificate, articles, latest GIS, permits, BIR certificate, signatory resolution and IDs, latest audited statements and a business description, refreshed every year so you can hand it over the day the bank asks. Second, keep the SEC and the bank in step: when a director, shareholder, signatory or address changes, notify the bank as soon as the SEC filing is done rather than waiting to be asked. Third, track expiry dates for permits, passports, proof of status and authority resolutions, with a reminder one cycle ahead. Fourth, name one person responsible for answering bank correspondence so that nobody assumes someone else replied. Put the bank's review cycle in the same compliance calendar as SEC and BIR deadlines, so it is planned work rather than a surprise.

Yixing International Travel (SEC registration CS202009551, Bureau of Immigration accreditation CA-202624381-1) supports Chinese-owned companies in the Philippines through its compliance retainer service: checking corporate records against the bank's list, helping file GIS and other changes with the SEC, preparing signatory resolutions and Secretary's Certificates, assembling the business description and bank file, and reminding you when documents need renewal. Where ownership charts or audited statements are involved, we work with accountants and licensed lawyers. We are not a bank, we cannot influence any bank's risk decision, and we do not promise that an account will be kept open or released. What we can do is keep your file complete, consistent and on time. For your specific case consult a licensed attorney; this article is not legal advice.