38 GBL 4 Loans being contractual the period of payment may be subject to

38 gbl 4 loans being contractual the period of

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38, GBL) 4. Loans being contractual, the period of payment may be subject to stipulation by the parties. In the case of amortization, the amortization schedule has no fixed period as it depends on the project to be financed such that if it was capable of raising revenues, it should be at least once a year with a grace period of 3 years if the project to be financed is not that profitable which could be deferred up to 5 years if the project was not capable of raising revenues. (Sec. 44, GBL) 5. Loans granted to DOSRI : a. D irector b. O fficer c. S tockholder, which should at least 1% (if below 1% not anymore covered) d. R elated I nterests, such as DOS s spouses, their relatives within the
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UST G OLDEN N OTES 2011 M ERCANTILE L AW T EAM : A DVISER : A TTY . A MADO E. T AYAG ; S UBJECT H EAD : E ARL M. L OUIE M ASACAYAN ; A SST . S UBJECT H EADS : K IMVERLY A. O NG & J OANNA M AY D.G. P EÑADA ; M EMBERS : M A . E LISA J ONALYN A. B ARQUEZ , A NGELI R. C ARPIO , A NTONETTE T. C OMIA , A LBAN R OBERT L ORENZO F. D E A LBAN , J OEBEN T. D E J ESUS , C HRIS J ARK A CE M. M AÑO , A NNA M ARIE P. O BIETA , R UBY A NNE B. P ASCUA , F LOR A NGELA T. S ABAUPAN , G IAN F RANCES N ICOLE C. V ILCHES first degree whether by consanguinity or affinity, partnership whereby DOS is a partner or a corporation where DOS owns at least 20%. Q: What are excluded from such loan limitations? A: Non risk loans, such as: 1. Loans secured by obligations of the Bangko Sentral ng Pilipinas or the Philippine Government 2. Loans fully guaranteed by the Government 3. Loans covered by assignment of deposits maintained in the lending bank and held in the Philippines 4. Loans, credit accommodations and acceptances under letters of credit to the extent covered by margin deposits 5. Other loans or credit accommodations which the MB may specify as non risk items. Q: What is joint and solidary signature (JSS) practice? A: A common banking practice requiring as an additional security for a loan granted to a corporation the joint and solidary signature of a major stockholder or corporate officer of the borrowing corporation. (Security Bank v. Cuenca, G.R. No. 138544, Oct. 3, 2000) Q: In case of DOSRI accounts, what are the requirements that must be complied with? A: 1. Procedural requirement Loan must be approved by the majority of all the directors not including the director concerned. CB approval is not necessary; however, there is a need to inform them prior to the transaction. Loan must be entered in the books of the corporation. (Sec. 36) 2. Substantive requirement Loan must not exceed the paid in contribution and unencumbered deposits. (Not to exceed 15% of the portfolio or 100% of the net worth, whichever is lower.) (Sec. 36 [4]) Q: What is the effect of non compliance with the foregoing requirements? A: Violation of DOSRI is a crime and carries with it penal sanction.
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