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38, GBL)4.Loans being contractual, the period ofpayment may be subject to stipulationbytheparties.Inthecaseofamortization, the amortization schedulehas no fixed period as it depends on theproject to be financed such that if it wascapable of raising revenues, it should beat least once a year with a grace periodof 3 years if the project to be financed isnotthatprofitablewhichcouldbedeferred up to 5 years if the project wasnot capable of raising revenues.(Sec.44, GBL)5.Loans granted toDOSRI:a.Directorb.Officerc.Stockholder, which should at least1% (if below 1%not anymorecovered)d.RelatedInterests,suchasDOS sspouses, their relatives within the
USTGOLDEN NOTES 2011 MERCANTILELAWTEAM:ADVISER:ATTY. AMADOE. TAYAG;SUBJECTHEAD:EARLM. LOUIEMASACAYAN;ASST. SUBJECTHEADS:KIMVERLYA. ONG& JOANNAMAYD.G. PEÑADA;MEMBERS:MA. ELISAJONALYNA. BARQUEZ, ANGELIR. CARPIO,ANTONETTET. COMIA, ALBANROBERTLORENZOF. DEALBAN, JOEBENT. DEJESUS, CHRISJARKACEM. MAÑO, ANNAMARIEP. OBIETA,RUBYANNEB. PASCUA, FLORANGELAT. SABAUPAN, GIANFRANCESNICOLEC. VILCHESfirstdegreewhetherbyconsanguinityoraffinity,partnershipwherebyDOSisapartner oracorporationwhereDOS owns at least 20%.Q:Whatareexcludedfromsuchloanlimitations?A:Nonrisk loans, such as:1.Loanssecured by obligationsof theBangkoSentralngPilipinasorthePhilippine Government2.LoansfullyguaranteedbytheGovernment3.Loanscoveredbyassignmentofdeposits maintained in the lending bankand held in the Philippines4.Loans,creditaccommodationsandacceptances under letters of credit tothe extent covered by margin deposits5.Other loans or credit accommodationswhich the MB may specify as nonriskitems.Q: What is joint and solidary signature (JSS)practice?A:A common banking practice requiring as anadditionalsecurityforaloangrantedtoacorporation the joint and solidary signature of amajor stockholder or corporate officerof theborrowing corporation.(Security Bank v. Cuenca,G.R. No. 138544, Oct. 3, 2000)Q: In case of DOSRI accounts, what are therequirements that must be complied with?A:1.Procedural requirementLoan must beapproved by the majority of all thedirectorsnotincludingthedirectorconcerned.CBapprovalisnotnecessary; however, there is a need toinform them prior to the transaction.Loan must be entered in the books ofthe corporation.(Sec. 36)2.Substantive requirementLoan must notexceed thepaid in contribution andunencumbered deposits. (Not to exceed15% of the portfolio or 100% of the networth, whichever is lower.)(Sec. 36 )Q: What is the effect of noncompliance with theforegoing requirements?A:Violation of DOSRI is a crime and carries with itpenal sanction.