MORNBFI Vol. 1 - Planters Development Bank

§§ 4408Q - 4408Q.909.12.31must be considered. An analysis of theimpact thereof on the QB’s/trust entity’soperations and financial conditions must beundertaken, including evaluation of capitalposition, asset condition, management,earnings posture and liquidity position.In determining whether a particular actor omission, which is not otherwiseprohibited by any law, rule or regulationaffecting QBs/trust entities, may be deemedas conducting business in an unsafe orunsound manner, the Monetary Board, uponreport of the head of the SES based onfindings in an examination or a complaint,shall consider any of the followingcircumstances:a. The act or omission has resulted ormay result in material loss or damage, orabnormal risk or danger to the safety,stability, liquidity or solvency of theinstitution;b. The act or omission has resulted ormay result in material loss or damage orabnormal risk to the institution’s depositors,creditors, investors, stockholders, or to theBSP, or to the public in general;c. The act or omission has caused anyundue injury, or has given unwarrantedbenefits, advantage or preference to the QB/trust entity or any party in the discharge bythe director or officer of his duties andresponsibilities through manifest partiality,evident bad faith or gross inexcusablenegligence; ord. The act or omission involves enteringinto any contract or transaction manifestlyand grossly disadvantageous to the QB/trustentity, whether or not the director or officerprofited or will profit thereby.The list of activities which may beconsidered unsafe and unsound is shownin Appendix Q-24.In line with the statement of principlesgoverning trust and other fiduciary businessunder Sec. 4401Q, the trustee, fiduciary orinvestment manager shall desist from thefollowing unsound practices:a. Entering in an arrangement wherebythe client is at the same time the borrowerof his own fund placement, or whereby thetrustor or principal is a borrower of othertrust, fiduciary or investment managementfunds belonging to the same family orbusiness group of such trustor or principal;b. Granting loans or accommodationsto any trust committee member, officer andemployee of the trust department exceptwhere such loans are obtained by saidpersons as members of an employee benefitfund of the trustee’s own institution;c. Borrowing from, or selling trust,other fiduciary and/or investmentmanagement assets to, the trust corporationor IH proper to cover portfolio lossesand/or to guarantee the return of principalor income;d. Granting new loans to any borrowerwho has a past due and/or classified loanaccount with the institution itself or its trustdepartment; ande. Requiring clients to sign documentsin blank.(As amended by Circular No. 640 dated 16 January 2009)§§ 4408Q.1 - 4408Q.8 (Reserved)§ 4408Q.9 Sanctions. The MonetaryBoard may, at its discretion and based onthe seriousness and materiality of the actsor omissions, impose any or all of thefollowing sanctions provided under Section37 of R.A. No. 7653 and Section 56 ofR.A. No. 8791, whenever a QB/trust entityconducts business in an unsafe and unsoundmanner:a. Issue an order requiring the QB/trustentity to cease and desist from conductingbusiness in an unsafe and unsound mannerand may further order that immediate actionbe taken to correct the conditions resultingfrom such unsafe or unsound practice;b. Fines in amounts as may bedetermined by the Monetary Board to beappropriate, but in no case to exceedQ RegulationsPart IV - Page 14Manual of Regulations for Non-Bank Financial Institutions