§§ 43620 - 4365Q 96.12.31

than twenty percent (20%) of the subscribed capital of the corporation; and

c. Credit accommodations granted under officers' fringe benefit plans.

Sec. 4363Q Credit Accommodations Under Officers' Fringe Benefit Plans. The aggregate outstanding liabilities to an NBQB of its officers, extended under officers' fringe benefit plans for the purpose of house, car, and appliance financing, and meeting educational, medical, hospital, and other similar expenses, shall not exceed thirty percent (30%) of the combined capital accounts of the lending entity: Provided, That NBQBs shall submit, for record purposes, copies of their officers' fringe benefit plans to the appropriate department of the BSP.

Sec. 4364Q Procedural Requirements The following provisions shall apply if a director or officer is a party, directly or indirectly, to, or acts as the representative or agent of, others in any of the transactions under Sec. 4357Q.

a. Approval of the board of directors; when to obtain. Except with the prior written approval of the majority of the directors, excluding the director concerned, no loan or other credit accommodation shall be granted nor any of the transactions under Sec. 4357Q be entered into.

b. Approval by the board; how manifested. The approval shall be manifested in a resolution passed by the board of directors duly assembled during a regular or special meeting for the purpose and made of record.

C. Majority of the directors; computation of. The computation of the majority of the directors, excluding the director concerned, shall be based on the total number of directors of the NBQB, as provided in its articles of incorporation and by-laws.

d. Contents of the resolution. The resolution of the board of directors shall

contain the following information:

(1) Name of the director or officer concerned and his relationship as regards the credit accommodation, such as principal, indorser, spouse of borrower, etc.;

(2) Nature of the loan or other credit accommodation, purpose, amount, credit basis for such loan or credit accommodation, security and appraisal thereof, maturity, interest rate, schedule of repayment, and other terms of the loan or credit accommodation;

(3)

(4)

Date of the resolution;

Names of the directors who were present and who participated in the deliberations of the meeting;

(5) Names in print and signatures of the directors approving the resolution: Provided, That the corporate secretary may sign, under a power-of-attorney, in behalf of a director who was present in the board meeting and who approved such resolution, in instances where such signature is necessary, to indicate that such resolution was approved by a majority of the directors; and

(6) Such other information as may be required by the appropriate supervising and examining department of the BSP.

e.

Transmittal of copy of board of directors' approval; contents thereof. A copy of the written approval of the board of directors, as herein required, shall be submitted to the appropriate department of the BSP within twenty (20) business days from the date of approval. The copy may be a duplicate of the original, or a reproduction copy showing clearly the signatures of the approving directors: Provided, That if a reproduction copy is to be submitted, it shall contain, on its face or reverse side, a signed certification by the secretary that it is a reproduction of the original written approval.

Sec. 4365Q Sanctions. Any violation of the provisions of the foregoing rules shall be subject to any or all of the following

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sanctions:

a. Restriction or prohibition on the NBQB from declaring dividends until the outstanding loans and other credit accommodations have been reduced to within the herein prescribed ceilings;

b. Disqualification of the directors voting for the approval of the loan or credit in excess of any of the ceilings prescribed in Secs. 4360Q and 4361Q from participating in the approval of loans or credit to officers, directors, and stockholders of the NBQB: Provided, however, That the disqualification may be lifted by the BSP, as the circumstances warrant;

C.

Application of (1) the borrowing director's or officer's share in the NBQB's profit sharing program and (2) the share of the director voting for the approval of the loan or credit accommodation against the excess of such loan or credit accommodation over any of the herein prescribed ceilings for such period of time as may be approved by the Monetary Board; and

d. For the duration of each violation, imposition of a fine of one-tenth of one percent (1/10 of 1%) of the excess over the ceilings per day but not to exceed P30,000 a day on (1) the lending NBQB and the director, officer, or stockholder whose borrowing exceeds his individual ceiling and (2) each of the directors voting for the approval of the loan or credit accommodation in excess of any of the ceilings prescribed in Secs. 4360Q and 4361Q.

The penalty for exceeding the individual ceiling, aggregate ceiling and ceiling on unsecured loans shall be computed on the average amount of loans in excess of said ceilings during the same week.

Secs. 4366Q - 4370Q (Reserved)

F. (RESERVED)

Secs. 4371Q - 4375Q (Reserved)

§§ 43650 - 43760.2 96.12.31

G. SPECIAL TYPES OF LOANS

Sec. 4376Q Interbank Loans. Interbank loan transactions shall include, among other things, (a) interbank call loan (IBCL) transactions; (b) borrowings evidenced by deposit substitute instruments; and (c) purchases of receivables with recourse: Provided, however, That only IBCL transactions which are evidenced by interbank loan advices or repayment transfer tickets the settlement of which is effected by the BSP in the NBQBs' respective demand deposit accounts with the BSP shall be eligible to one percent (1%) reserve: Provided, further, That funds borrowed by NBQBs from trust departments of banks/investment houses shall be excluded from the herein definition of interbank loan transactions.

Interbank loan transactions not evidenced by interbank loan advice or repayment transfer tickets and submitted to the BSP Accounting Department shall be reported to the BSP in the prescribed form.

§ 4376Q.1 Systems and procedures for interbank call loan transactions. IBCL transactions of NBQBs shall be governed by the Agreement for an Interbank Call Loan Funds Transfer System executed among the BSP, the Bankers Association of the Philippines and the Philippine Clearing House Corporation (Appendix Q-13) and any subsequent amendments thereto.

NBQBs shall generate hard copies of the formats of the loan and repayment instructions in the form presented in Annexes A, B, C and D of the aforesaid agreement to be kept as documentary evidence of their matched and processed IBCL transactions.

§ 4376Q.2 Accounting procedures a. NBQBs shall immediately pass the corresponding entries in their books and, upon receipt of a copy of the transfer instruction reported as matched in the MultiTransaction Interbank Payment System

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§ 4376Q.3 Transfer of excess funds The prescribed "Authority to Debit Slip" shall be used by NBQBs in the transfer of their excess funds which are not otherwise lent out in the interbank loan market from their BSP reserve accounts to their operating accounts with their depository banks.

The "Authority to Debit Slip" shall have a standard size of 4 3/4" x 8 1/2" and shall be orange in color. It shall contain the minimum data or information as required and shall be accomplished and submitted to the BSP Accounting Department in duplicate after having been duly signed and/or authenticated by authorized officers of the NBQB.

Secs. 4377Q - 4380Q (Reserved)

H. EQUITY INVESTMENTS

Sec. 4381Q Investment in Non-Allied Undertakings. In order to avoid undue concentration of economic power, the total equity investments in any single non-allied enterprise or industry of NBQBs, expanded

commercial banks and their subsidiaries, whether or not the parent financial intermediaries have equity investments in the enterprise, shall, in any case, remain a minority in that enterprise, except as may be otherwise approved by the President of the Philippines. Non-allied enterprises are those allowed for expanded commercial banks in the Manual of Regulations for Banks.

Equity investments as of April 1, 1980, which exceed the limitation under this Section, may be retained but shall not be increased percentage-wise, and whenever reduced, shall not thereafter be increased beyond the prescribed limitation.

Sec. 4382Q Investments Abroad. Except as may be authorized by the Monetary Board, the total equity investments in and/or loans to any single enterprise abroad by any NBQB shall not at any time exceed fifteen percent (15%) of the net worth of the investing NBQB.

Sec. 4383Q Underwriting Exempted. The limitations on equity investments under Sec. 4381Q shall not apply to inventories of equity securities arising out of firm underwriting commitments of investment houses: Provided, That such equity holding shall be disposed of within two (2) years from acquisition by the investment house.

Secs. 4384Q - 4385Q (Reserved)

I. (RESERVED)

Secs. 4386Q-4390Q (Reserved)

J. OTHER OPERATIONS

Sec. 4391Q Purchase of Receivables and Other Obligations. The following rules shall govern the purchase of receivables and other obligations.

§ 4391Q.1 Yield on purchase of receivables. The rate of yield, including

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§§ 43910.1 - 43990 96.12.31

SEC. This prohibition includes transactions between an investment house and its trust department.

Unregistered commercial papers may be sold, discounted, assigned or negotiated by NBQBs to other financial intermediaries with quasi-banking functions.

Any violation of the above rules and regulations shall be subject to any or all of the following sanctions:

a. Suspension of quasi-banking authority for a period of six (6) months; and b. Monetary penalty of P500 per day per transaction for each and every officer of the NBQB involved in any capacity in any transaction violative of these regulations.

Sec. 4392Q Reverse Repurchase Agreements with the Bangko Sentral Reverse repurchase agreements may be effected with the BSP under its open market operations, subject to the terms and conditions in Subsec. 4602Q.1.

Secs. 4393Q - 4395Q (Reserved)

K. MISCELLANEOUS PROVISIONS

Secs. 4396Q - 4398Q (Reserved)

Sec. 4399Q General Provision on Sanctions Unless otherwise provided for, any violation of the provisions of this Part shall be subject to Sections 36 and 37 of R.A. No. 7653.

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