OLD PROVISIONS:

This shall serve as guide for all officers and staff in handling clients requesting for loan extension
or renewal of their loans.

Under our existing policies, loan renewal is allowed under the following circumstances:

LOAN RENEWAL:

“Renewal of loans shall be allowed in highly meritorious cases, subject to the following
conditions:

 Under the following circumstances, only THREE (3) renewals is allowed;

 It will not prejudice the interest of the bank taking into consideration account profitability.
 It will improve the borrower’s financial standing and enable him to pay within the period
of renewal.
 Atleast 20% reduction of the original principal loan and all interests are paid.
 All Unpaid Interests and Accounts Receivable should be paid.
 The borrower has offered additional securities if the value of the previous collaterals are
diminished.

TO BE MORE SPECIFIC, LET THE PARTICULAR PROVISION OF THE ABOVE-

MENTIONED POLICIES BE AMENDED TO READ AS FOLLOWS:

I. LOAN RENEWAL
Renewal of loans shall ONLY be allowed upon re-establishment of the credit-
worthiness of the obligor using the same credit granting criteria for the
evaluation and approval of new loans;

a. For Agricultural & Commercial Loans

Under the following circumstances, reasonable standards shall be

observed, taking into consideration the following factors;

1. It will not prejudice the interest of the bank taking into consideration
account profitability;
2. It will improve the borrower’s financial standing and enable him to
pay within the period of renewal;
3. Only three (3) renewals are allowed;
4. Borrower’s normal operation or production cycle to ensure a realistic
repayment schedule;
5. At least 5% reduction of the original principal loan and all interests
are paid.
6. All Unpaid Interests and Accounts Receivable should be paid

ADDENDUM TO POLICIES ON RENEWAL Page 1

 7. Status of collateral, re-appraisal of properties shall be established
taking into consideration changes in market conditions and physical
aspects of the property; and Age of account, delinquency status,
payment history and account profitability (in case of business).
8. Meritorious request not covered by items 3 and 5 shall be elevated
for approval of the Board of Directors.

b. For Salary Loans

Under the following circumstances, salary loans may be allowed for

renewal;

1. After verification of all information gathered and data presented,

an application has passed the standards of the bank in granting of
loans.
2. At least 12 monthly amortizations are paid for loans with 24 months
and longer term.
3. At least FORTY PERCENT (40%) reduction in the original principal
for loans with terms shorter than 24 months.
4. The renewal is not prejudicial to the interests of the bank.
5. Meritorious request not covered by ITEMS 2 AND 3 shall be
elevated for approval of the BOARD OF DIRECTORS.

 EXCEPTIONS/ DEVIATIONS ON THE ABOVE TERMS AND CONDITIONS SHALL BE

PROPERLY REPORTED AND MONITORED DULY APPROVED BY THE BOARD OF
DIRECTORS.

 ALL ITEMS AND PROVISIONS OF THE CREDIT POLICIES INCONSISTENT TO THE

ABOVE-MENTIONED GUIDELINES SHALL BE DEEMED SUPERSEDED.

Approved per Board Resolution No. 16-17 series of 2017

ADDENDUM TO POLICIES ON RENEWAL Page 2

AMENDMENTS:

To align the policies with the updated sound credit risk management practices, let the particular
provision of the above-mentioned policies be amended to read as follows;

II. LOAN RENEWAL

Renewal of loans shall ONLY be allowed upon re-establishment of the credit-
worthiness of the obligor using the same credit granting criteria for the
evaluation and approval of new loans;

Under the following circumstances, reasonable standards shall be observed,

taking into consideration the following factors;

 It will not prejudice the interest of the bank taking into consideration
account profitability;
 It will improve the borrower’s financial standing and enable him to pay
within the period of renewal;
 Borrower’s normal operation or production cycle to ensure a realistic
repayment schedule;

A. For Agricultural & Commercial Loans

1. Maximum of three (3) renewals are allowed;

2. At least 5% reduction of the original principal loan and all
interests are paid.
3. All Unpaid Interests and Accounts Receivable should be paid.

ADDENDUM TO POLICIES ON RENEWAL Page 3

 4. Status of collateral, re-appraisal of properties shall be
established taking into consideration changes in market
conditions and physical aspects of the property; and
5. Age of account, delinquency status, payment history and
account profitability (in case of business).
6. Meritorious request not covered by item No. 1 and 2 shall be
elevated for approval of the next approving authority via the
original loan approving authority.

c. For Salary Loans

Under the following circumstances, salary loans may be allowed for

renewal;
1. After verification of all information gathered and data presented,
an application has passed the standards of the bank in granting of
loans.
2. At least 12 monthly amortizations are paid for loans with 24 months
and longer term.
3. At least forty percent (40%) reduction in the original principal for
loans with terms shorter than 24 months.
4. Meritorious request not covered by items 2 and 3 shall be elevated
for approval of the next approving authority via the original loan
approving authority.

All items and provisions of the credit policies inconsistent to the above-mentioned guidelines s
hall be deemed superseded.

Approved per Board Resolution No. ___ series of 2018

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