MORNBFI Vol. 1 - Planters Development Bank

§§ 4303Q - 4304Q.111.12.31corporations, which loans, creditaccommodations and guarantees weregranted prior to and are outstanding as ofdate of acquisition, merger or consolidationof borrower-corporations shall not beincreased, but shall be reduced and oncereduced, shall not be increased beyond theapplicable SBL.(As amended by Circular Nos. 712 dated 09 February 2011 and700 dated 06 December 2010)§ 4303Q.1 (2008 - 4306Q.1) Exclusionsfrom loan limit. In addition to thoseenumerated in Sec. 4303Q, the totalliabilities of a commercial paper issuer forcommercial papers held by a QB as a firmunderwriter shall not be counted indetermining compliance with the SBLwithin a period of 180 days from theacquisition of the commercial paper by aQB: Provided, That in no case shall suchliabilities exceed five percent (5%) of the networth of the selling agent beyond the normalapplicable SBL.In case a stand–alone trust corporationis a subsidiary or affiliate of QB, the assetunder management of the trust corporationshall not form part of the relevant exposuresof the parent QB for purposes of calculatingthe SBL and the ceilings for accommodationto DOSRI of the said parent QB.The purchase by the trust corporation,in behalf of its clients, of securities orinstruments issued by its parent QB shallnot form part of the relevant exposure of thetrust corporation for purposes of calculatingthe SBL and DOSRI ceilings of the said trustcorporation.(As amended by Circular Nos. 710 dated 19 January 2011)§ 4303Q.2 (2008 - 4306Q.2)Contingent liabilities included in loan limitOutstanding foreign and domestic standbyand deferred letters of credit less margindeposits, and outstanding guarantees, thenature of which requires the guarantor toassume the liabilities/obligations of thirdparties in case of their inability to pay, shallbe included in determining the SBL exceptthose fully secured by cash, hold-out ondeposit substitutes, or governmentsecurities.§§ 4303Q.3 - 4303Q.4 (Reserved)§ 4303Q.5 (2008 - 4306Q.3) SanctionsViolations of the provisions of the foregoingrules shall be subject to the followingsanctions/penalties:a. Fines. Fines of one-tenth of onepercent (1/10 of 1%) of the excess but notto exceed P30,000 a day for each violation,reckoned from the date the excess startedup to the date when such excess waseliminated, shall be assessed on the QB.b. Other sanctionsFirst OffenseReprimand for the directors/officerswho approved the credit line or availmentwhich resulted in the excess with a warningthat subsequent violations will be subjectto more severe sanctions.Subsequent offenses(1) For the duration of each violation,imposition of a fine of P500 a day for eachof the directors/officers who approved thecredit line or availment which resulted inan excess.(2) Suspension of the QB frombranching privileges until the excess iseliminated.Sec. 4304Q (2008 - 4312Q) Grant of Loansand Other Credit Accommodations. Thefollowing regulations shall be observed inthe grant of loans and other creditaccommodations.§ 4304Q.1 (2008 - 4312Q.1) Generalguidelines. Consistent with safe and soundbusiness practices, a QB shall grant loansor other credit accommodations only inQ RegulationsPart III - 6Manual of Regulations for Non-Bank Financial Institutions