MORNBFI Vol. 1 - Planters Development Bank

§ 4329Q08.12.31Sec. 4329Q (2008 - 4359Q) Direct orIndirect Borrowings. For purposes of thisSection, a credit accommodation shall beconsidered a direct or indirect borrowingin accordance with the following criteria.a. Direct borrowing - If the director,officer or stockholder of the lendingQB is a party to any of the transactionsenumerated in Sec. 4327Q for himself oras a representative or agent of others, orif he acts as a guarantor, endorser or suretyfor loans from the QB, or if the loan orcredit accommodation to another party issecured by a property interest or right ofthe director, officer or stockholder.b. Indirect borrowing - If in any ofthe transactions in Sec. 4327Q theborrower, guarantor, indorser, or suretyis a:(1) Spouse or relative within the firstdegree of consanguinity or affinity, orrelative by legal adoption of a director,officer or stockholder of the QB;(2) Partnership of which a director,officer, or stockholder or his spouse orrelative within the first degree ofconsanguinity or affinity, or relative bylegal adoption, is a general partner;(3) Co-owner with the director,officer, stockholder or his spouse orrelative within the first degree ofconsanguinity or affinity, or relative bylegal adoption, of the property or interestor right mortgaged, pledged or assignedto secure the loans or creditaccommodations, except when themortgage, pledge or assignment coversonly said co-owner’s undivided interest;(4) Corporation, association, or firmof which a director or officer of the QB,or his spouse is also a director or officerof such corporation, association or firm,except (i) where the securities of suchcorporation, association or firm are listedand traded in the domestic stock exchangeand less than fifty percent (50%) of thevoting stock thereof is owned by any one(1) person or by persons related to eachother within the third degree ofconsanguinity or affinity; or (ii) where thedirector, officer or stockholder of the lendingQB sits as a representative of the QB in theboard of directors of such corporation:Provided, That the QB representative shallnot have any equity interest in the borrowercorporation except for the minimum sharesrequired by law, rules and regulations, orby the by-laws of the corporation, to qualifya person as director of the corporation:Provided, further, That the borrowingcorporation under (i) or (ii) is not amongthose mentioned in Items “b(5)” and “b(6)”of this Section;(5) Corporation, association or firm ofwhich any or a group of directors, officers,stockholders of the lending QB and/or theirspouses or relatives within the first degreeof consanguinity or affinity or relative bylegal adoption, hold/own more than twentypercent (20%) of the subscribed capital ofsuch corporation, or of the equity of suchassociation or firm; or(6) Corporation, association or firmwholly or majority-owned or controlled byany or a group of related entities mentionedin Items “b(2)”, “b(4)” and “b(5)” of thisSection.Other cases of direct/indirect borrowingshall be resolved on a case-to-case basis.It shall be the responsibility of theQB concerned to ascertain whether theborrower, guarantor, representative,endorser or surety is related to personsmentioned in Item “b(1)” of this Sectionor connected with any of the directors,officers or stockholders of the QB in anyof the capacities mentioned in Items“b(2)”, “b(3)”, “b(4)”, “b(5)” and “b(6)” ofthis Section.In determining indirect borrowings asenumerated above, only those casesinvolving living relatives shall be considered.Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart III - Page 27