REPUBLIC ACT NO.

7353
AN ACT PROVIDING FOR THE CREATION, ORGANIZATION AND OPERATION OF RURAL BANKS,
AND FOR OTHER PURPOSES.

Sec. 13.Subject to such guidelines as may be established by the Monetary Board, rural banks
may invest in equities of allied undertakings as hereinafter enumerated: Provided, That: (a) the
total investment to equities shall not exceed twenty-five percent (25%) of the net worth of the
rural bank; (b) the equity investment in any single enterprise shall be limited to fifteen percent
(15%) of the net worth of the rural bank; and (c) the equity investment of the rural bank in any
single enterprise shall remain a minority holding in that enterprise: Provided, further, That
equity investment shall not be permitted in non-related activities;

Allied undertakings shall include;

a. Banks, financial institutions and non-bank financial intermediaries;

b. Warehousing and other post-harvest facilities;
c. Fertilizer and agricultural chemical and pesticides distribution;
d. Farm equipment distribution;
e. Trucking and transportation of agricultural products;
f. Marketing of agricultural products;
g. Leasing; and
h. Other undertakings as may be determined by the Monetary Board.

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MANUAL OF REGULATIONS FOR BANKS

Sec. X380 Non-Financial Allied Undertakings. A bank may acquire up to 100% of the equity of a
non-financial allied undertaking: Provided, That the equity investment of a TB/RB in any single
enterprise shall remain less than fifty percent (50%) of the voting shares in that enterprise:
Provided, further, That prior Monetary Board approval is required if the investment is in excess
of forty percent (40%) of the total voting stock of such allied unde0rtaking. The determination
of whether the corporation is engaged in a non-financial allied undertaking shall be based on
the primary purpose as stated in its articles of incorporation and the volume of its principal
business.

a. UBs/KBs/TBs UBs/KBs and TBs may invest in equities of the following non-financial allied
undertakings:

1) Warehousing companies;
2) Storage companies;
3) Safe deposit box companies;
 4) Companies primarily engaged in the management of mutual funds but not in the mutual
funds themselves;
5) Management corporations engaged or to be engaged in an activity similar to the
management of mutual funds;
6) Companies engaged in providing computer services;
7) Insurance agencies/brokerages;
8) Companies engaged in home building and home development;
9) Companies providing drying and/or milling facilities for agricultural crops such as rice
and corn;
10) Service bureaus, organized to perform for and in behalf of banks and NBFIs the services
allowed to be outsourced enumerated in Sec. X162: Provided, That data processing
companies may be allowed to invest up to forty percent (40%) in the equity of service
bureaus;
11) Philippine Clearing House Corporation (PCHC), Philippine Central Depository, Inc. and
Fixed Income Exchange;
12) Companies engaged in merchant acquiring business;
13) Such other similar activities as the Monetary Board may declare as nonfinancial allied
undertakings of banks.
14) UBs may further invest in health maintenance organizations (HMOs).

In addition, TBs may also invest in the equities of companies enumerated in Item “b” of
this Section.

b. RBs/Coop Banks RBs/Coop Banks may invest, as a nonfinancial undertaking, in the equities
of companies engaged in the following:

1) Warehousing and other postharvest facilities;

2) Fertilizer and agricultural chemical and pesticides distribution;
3) Farm equipment distribution;
4) Trucking and transportation of agricultural products;
5) Marketing of agricultural products;
6) Leasing;
7) Automated Teller Machine (ATM) networks; and
8) Other undertakings as may be determined by the Monetary Board.

The guidelines in determining compliance with ceilings on equity investments in non-financial

allied undertakings are shown in Appendix 79.

Sec. 1381 Investments in Non-Allied or Non-Related Undertakings. Only UBs may invest in the
equity of an enterprise engaged in non-allied or non-related activities. The guidelines in
determining compliance with ceilings on equity investments in non-allied or non-related
undertakings are shown in Appendix 79.
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Fringe Benefit Plan

§ X146.2 (2017 - Duties and responsibilities/roles and functions) Loans, advances, and other
credit accommodations to officers. BSFIs may grant loans, advances, or any other forms of
credit accommodations to their officers as part of a board approved remuneration and
incentive program. The board of directors shall ensure that these credit accommodations are
granted for legitimate purposes, such as among others, financing the housing transportation,
and personal needs of the officers. In this regard, the board of directors shall identify specific
purposes eligible for said credit accommodations to officers to promote good performance and
acceptable risk-taking behavior consistent with the BSFI’s operating and risk culture, long-term
business and risk appetite, performance, and control environment. BSFIs shall submit the
board-approved purposes for the grant of loans, advances, or any other forms of credit
accommodations to officers for approval of the Bangko Sentral. The guidelines and contractual
provisions implementing said defined purposes, and any subsequent changes thereto, shall on
the other hand, be approved by the board of directors or a board-level committee.

Transitory provision. Existing financing programs for officers that have been approved by the
Bangko Sentral prior to 14 September 2017, need not be resubmitted: Provided, That BSFIs that
shall change any of the provisions of the earlier approved program shall submit for approval of
the Bangko Sentral the board-approved purposes for the grant of loans, advances, or any other
forms of credit accommodations to officers.

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Contract to sell financing

(c) Loans and Receivables-Others - This refers to loans granted other than to BSP, banks and
non-bank financial institutions with quasi-banking authority. For each of the loan classifications,
control accounts shall be maintained in accordance with the following:

i. status (current, past due but not yet non-performing; past due and already non-
performing and items in litigation);
ii. restructured loans and their status;
iii. economic activity as defined under the Philippine Standard Industrial Classification
(PSIC) of the National Statistical Coordination Board (NSCB);
iv. status per PAS 39 (current, past due and impaired);
v. residual maturity of performing loans; and
vi. repricing of performing loans.
 The sub-accounts of Loans and Receivables-Others shall be as follows:

(c.3) Development Loans Incentive - This refers to the amortized cost of loans extended by
banks incorporated under the laws of the Philippines, whether Philippine or foreign owned, to
finance educational institutions, cooperatives, hospitals and other medical services, socialized
or low-cost housing and to local government units, without national government guarantee
which shall be included for purposes of determining compliance with the provisions of PD No.
717, as amended.

(c.3d) Socialized and Low Cost Housing - This refers to the amortized cost of loans
granted to finance socialized and low cost housing.

(i) Contracts to Sell – This refers to the amortized cost of loans granted to
developers of housing projects by way of purchase by the bank of receivables
from Contracts to Sell executed between the developer and home buyers on a
with recourse or substitution basis to finance the development of socialized and
low cost housing.

(c.6) Contracts to Sell (other than those in item c.3d(i) – This refers to the amortized cost of
loans granted to developers of housing projects by way of purchase of the bank of receivables
from Contracts to Sell executed between the developer and home buyers on a with recourse or
substitution basis to finance the development of socialized and low cost housing, other than
those in Item c.3d(i).