Exceptions to Related Interest Classification
Exception (a): The securities of the entity are listed and traded on the big board or commercial and industrial board of domestic stock exchanges.
Ownership: Less than 50% of the voting stock is owned by any one person or persons related within the first degree of consanguinity or affinity.
Exception (b): The bank’s director or officer represents the bank on the board of the entity but holds no equity interest except the minimum shares required by law, rules, regulations, or the corporation's by-laws.
Exception (c): The entity is at least 99% owned by a non-stock corporation as defined under Section 87 of the Corporation Code who finances hospitals and other medical services.
The loan under this exception must be fully secured.
Additional Conditions for Exceptions
- The borrowing corporation under exceptions (a), (b), and (c) should not be among those enumerated as related interest under Items ae(5), ae(6), ae(7), and ae(8) in the same regulatory section.
Effectivity
- This amendment to the Manual of Regulations for Banks' definition of related interest took effect fifteen (15) days after publication in the Official Gazette or a newspaper of general circulation.
Legal Authority
- The Circular was issued pursuant to Monetary Board Resolution No. 1425 dated October 8, 2010.
- Signed by the Governor of the Bangko Sentral ng Pilipinas, Amando M. Tetangco, Jr.