Law Summary
Investment Ratio Matrix Based on Bank Type and Allied Undertaking Category
- The regulation provides a detailed table setting out limits for various bank types (Universal Banks, Commercial Banks, Thrift Banks, Rural Banks, Cooperatives) and categories of financial allied undertakings (Publicly Listed, Not Publicly Listed, Quasi-Banks, Insurance Companies, Venture Capital Companies (VCCs), and Others).
- For example, Universal Banks and Commercial Banks may invest up to 100% in publicly listed subcategories but are limited to 49% in non-listed or other categories.
- Thrift and Rural Banks have lower or similar percentage restrictions depending on the activity.
- Cooperatives have a 30% limit for certain financial allied undertakings.
Restrictions on Equity Ownership in Quasi-Banks
- The Monetary Board may impose further limits on equity investments by Universal and Commercial Banks in quasi-banks, capping these at 40% to ensure competitive market conditions.
Additional Provisions on Ownership of Voting Stock
- A publicly listed Universal Bank or Commercial Bank is permitted to own up to 100% of the voting stock in only one other Universal Bank or Commercial Bank.
- Ownership beyond one such institution must be limited to minority holdings.
Coordination with Republic Act No. 7721 and Other Regulations
- Existing equity investments under Republic Act No. 7721 are governed by Section X121, provided it does not conflict with the new regulations under Republic Act No. 8791.
- Any prior circulars that conflict with this Circular are revoked and superseded.
Effective Date and Implementation
- This Circular took effect immediately upon its adoption on March 13, 2002.
- The Circular was issued by the Monetary Board through Resolution No. 306 dated February 28, 2002, and was officially signed by the Governor Rafael B. Buenaventura.