Question & AnswerQ&A (SEC MEMORANDUM CIRCULAR NO. 7, S. 2013)
The total credit that a lending company may extend to any person, company, corporation, or firm shall not exceed thirty percent (30%) of its net worth.
The total credit that a lending company may extend to its directors, officers, and stockholders and their related interests shall not exceed fifteen percent (15%) of its net worth.
Related interests include the spouse or relatives within the first degree of consanguinity or affinity, or relatives by legal adoption of the director, officer, or stockholder; partnerships where such persons or their spouses/relatives are general partners; corporations where such persons or their spouses/relatives are directors or officers; corporations where more than 20% of subscribed capital stock is owned by such persons or their spouses/relatives; and corporations wholly or majority-owned or controlled by entities mentioned above.
A fine of P10,000.00 plus P100.00 per day until compliance is reached.
For the second offense, a fine of P10,000.00 plus P200.00 per day; for the third offense, a fine of P10,000.00 plus P300.00 per day; and for the fourth offense, suspension and/or revocation of the Certificate of Authority after due notice and proceedings.
The same as for the DOSRI limit: P10,000.00 plus progressively increasing daily fines for the first three offenses, and suspension and/or revocation of the Certificate of Authority on the fourth offense.
Fifteen (15) days after the publication of the Memorandum Circular in two newspapers of general circulation in the Philippines.
Lending companies organized under the Lending Company Act of 2007 (Republic Act No. 9474) are subject to these credit limits.
Corporations where more than twenty percent (20%) of its subscribed capital stock is owned by a director, officer, stockholder of the lending company or their close relatives are considered related interests, thereby subjecting their loans to the DOSRI credit limits.
Due notice and proper administrative proceedings must be conducted before suspension and/or revocation.