Non-Ficial Allied Undertakings Regulation

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CIRCULAR NO. 317, S. 2002. JANUARY 29, 2002: Non-Ficial Allied Undertakings Regulation

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Title Source: Supreme Court: Non-Ficial Allied Undertakings Regulation

Law: Circular No. 317, S. 2002. January 29, 2002

Decision Date: Jan 29, 2002

The Monetary Board's Circular No. 317 allows banks to acquire up to 100% equity in various non-financial allied undertakings, including warehousing, insurance, and health maintenance organizations, while superseding any inconsistent previous circulars.

Law Summary

Definition and Criteria for Non-Financial Allied Undertakings

Such undertakings are non-financial in nature but allied to banking activities.
The Monetary Board is the authority to determine and declare what constitutes non-financial allied undertakings.

Specific Non-Financial Allied Undertakings Allowed for Universal Banks (UBs), Commercial Banks (KBs), and Thrift Banks (TBs)

Banks under these categories may invest in equities of companies engaged in:
1. Warehousing
2. Storage
3. Safe deposit box services
4. Management of mutual funds (excluding the mutual funds themselves)
5. Management corporations conducting activities similar to mutual fund management
6. Computer services
7. Insurance agencies/brokerages
8. Home building and development
9. Agricultural crop drying and milling (e.g., rice and corn)
10. Service bureaus performing outsourced services for banks and non-bank financial institutions, with a limitation that data processing companies may invest up to 40% equity in such service bureaus
11. Philippine Clearing House Corporation (PCHC) and Philippine Central Depository, Inc. (PDIC)
12. Other similar activities as designated by the Monetary Board

Additional Investments by Universal Banks and Thrift Banks

Universal Banks (UBs) may invest further in health maintenance organizations (HMOs).
Thrift Banks (TBs) may invest both in the non-financial allied undertakings listed above and those in the subsequent subsection (Item b) referred to in the Circular.

Supersession and Effectivity

Any previously issued circulars inconsistent with these provisions are superseded by this Circular.
The Circular takes immediate effect upon issuance by the Monetary Board.

Legal Authority

The amendments were approved by the Monetary Board, pursuant to Section 26 of Republic Act No. 8791.
This Circular formalizes the rules guiding the scope of banks’ investments in non-financial allied undertakings as of January 29, 2002.

END