Within BC "EuroCreditBank" SA the procedures for identifying the affiliated persons as well as the way of concluding, approving, recording, realizing, monitoring and reporting their transactions are synthesized in internal regulations and the subdivision responsible for the activity with the affiliated persons is the Compliance Department and PCSB.
The Bank will not enter into transactions with persons whose lack or existence of affiliation with the Bank can not be established and verified.
The Bank will only engage in transactions with affiliated persons after sufficient information (documents) has been accumulated to justify the economic benefit to the Bank of such transactions and to assess the related risks.
Transactions with affiliated persons exclusively reflect the interests of the Bank, are conducted under objective conditions and are in accordance with the limits and provisions set forth in the applicable normative acts. The Bank does not enter into more advantageous transactions with affiliated persons than with non-affiliated persons (with the exception of Bank employees not affiliated to the Bank).
Any transaction with a person affiliated to the Bank, the value of which exceeds the equivalent of MDL 1,000,000 or its cumulative value with other transactions with the affiliated person or with clients related to the affiliated person to the bank, leads to the exceeding of that value, must be approved before its conclusion / modification of the contractual conditions, with the vote of at least the majority of the members of the Board of Directors of the Bank, and in cases where the equivalent of 1 million lei is not exceeded, it shall be approved by the Bank's Management Committee.
An affiliate who has material interest in a transaction or in the transactions of the connected customer group must leave any meeting at which the transaction is being discussed.
The most common risks associated with affiliate transactions are:
a) reputational risk - The Bank's Board of Directors ensures the continued maintenance of a high level of honesty and integrity and operates in a prudent manner in order to protect the Bank's reputation by ensuring that the Bank's transactions with its affiliated persons are monitored and monitored by avoiding abuse of the Bank their part;
b) credit risk - The Bank ensures that affiliated persons are not granted more favorable loans, which means that the terms and conditions for granting credits are the same as for non-affiliated persons and do not meet the conditions set out in art. 80 paragraph (8) of the Law no.202 of 6 October 2017 on the activity of banks. Inappropriate application of affiliate policies for granting credits may result in loans being granted or transactions being made on more advantageous terms than those provided for non-affiliated persons, which may cause problems in recovering loans, affecting their own revenues and funds of the Bank;
c) Risk of compliance - The Bank's Board of Directors is responsible for ensuring compliance of the Bank with the applicable regulatory framework. Failure to comply with these requirements and safety and prudence standards may have serious consequences for the Bank and its affiliates, including supervision measures, sanctions and sanctioning measures;
d) Operational risk - lack of controls to identify potential conflicts of interest, fraud, and misuse of privileged information lead to operational risk. The board of directors shall ensure that adequate procedures and controls are in place to prevent an affiliated person from circumventing the established policy of conflicts of interest, fraudulent use of corporate opportunities and breach of the regulatory framework governing affiliate transactions. System weaknesses and controls may increase the potential for operational risk due to abuse and fraud by affiliated persons;
e) liquidity risk - any speculation that casts doubt on the honesty or integrity of the Bank or its affiliates, however unfounded, may affect the ability of the Bank to attract repayable funds.