QuestionsQuestions (BSP CIRCULAR NO. 695)
It amends Item (4) of Subsection X326.1.e of the MORB to redefine “related interest” for purposes of DOSRI ceilings.
“Related interest” refers to certain relationships involving directors or officers of the bank (or their spouses) who are also directors or officers of another corporation, association, or firm.
Such corporation/firm is included as “related interest,” except when one of the enumerated exceptions (a), (b), or (c) applies.
The “big board” or the “commercial and industrial board” of domestic stock exchanges.
Less than fifty percent (50%) of the voting stock must be owned by any one person or by persons related to each other within the first degree of consanguinity or affinity.
The borrowing corporation is excluded from being treated as related interest, provided the bank representative has no equity interest in the borrower corporation other than the minimum shares required by law, rules and regulations, or by-laws.
He must have no equity interest in the borrower corporation except the minimum shares required by law, rules and regulations, or the corporation’s by-laws.
When the corporation is at least ninety-nine percent (99%)-owned by a non-stock corporation as defined in Section 87 of the Corporation Code of the Philippines.
The loan must be for financing hospitals and other medical services.
The loan is fully secured.
The borrowing corporation is not among those mentioned in Items e(5), e(6), e(7), and e(8) of the same Section.
Subsection X326.1.e, Item (4), of the Manual of Regulations for Banks.
Monetary Board Resolution No. 1425 dated 08 October 2010.
Fifteen (15) days following its publication either in the Official Gazette or in a newspaper of general circulation.
It was signed by Amando M. Tetangco, Jr., BSP Governor.
Because “related interest” determines whether certain transactions or counterparties are subject to DOSRI ceilings and related regulatory limits.