MORNBFI Vol. 1 - Planters Development Bank

§§ 4149Q - 4149Q.909.12.31Sec. 4149Q Conducting Business in anUnsafe/Unsound Manner. Whether aparticular activity may be considered asconducting business in an unsafe orunsound manner, all relevant facts must beconsidered. An analysis of the impactthereof on the QB’s/trust entity’s operationsand financial conditions must beundertaken, including evaluation of capitalposition, asset condition, management,earnings posture and liquidity position.In determining whether a particularact or omission, which is not otherwiseprohibited by any law, rule or regulationaffecting QBs/trust entities, may bedeemed as conducting business in anunsafe or unsound manner, the MonetaryBoard, upon report of the head of thesupervising or examining departmentbased on findings in an examination or acomplaint, shall consider any of thefollowing circumstances: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 resultedor may result in material loss or damageor abnormal risk to the institutions,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 theQB/trust entity or any party in thedischarge by the director or officer of hisduties and responsibilities throughmanifest partiality, evident bad faith orgross inexcusable negligence; ord. The act or omission involvesentering into any contract or transactionmanifestly and grossly disadvantageous tothe QB/trust entity, whether or not thedirector or officer profited or will profitthereby.The list of activities which may beconsidered unsafe and unsound is shownin Appendix Q-24.(As amended by Circular No. 640 dated 16 January 2009)§§ 4149Q.1 - 4149Q.8 (Reserved)§ 4149Q.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 exceedP30,000 a day on a per transaction basistaking into consideration the attendantcircumstances, such as the gravity of the actor omission and the size of the QB/trustentity, to be imposed on the QB/trust entity,their directors and/or responsible officers;c. Suspension of lending or FXoperations or authority to accept new depositsubstitutes and/or new trust accounts or tomake new investments;d. Suspension of responsible directorsand/or officers;e. Revocation of quasi-banking licenseand/or trust authority; and/orf. Receivership and liquidation underSection 30 of R.A. No. 7653.All other provisions of Sections 30 and37 of R.A. No. 7653, wheneverappropriate, shall also be applicable onthe conduct of business in an unsafe orunsound manner.Q RegulationsPart I - Page 44Manual of Regulations for Non-Bank Financial Institutions