Section 23Sec./Art. 23

Credit Quota. All banking institutions, whether government or private, shall set aside at least four percent (4%) of their total loanable funds for innovation development credit: Provided, however, That the loanable fluids as used in this section shall refer to funds generated from the date of effectivity of this Act: Provided, further, That innovation development loans benefitting agricultural sector workers and businesses shall be considered as part of the compliance with the credit quota requirement of Republic Act No. 10000, otherwise known as "The Agri-Agra Reform Credit Act of 2009": Provided, furthermore, That the four percent (4%) credit quota is subject to a joint review by the NIC and the BSP after three (3) years of implementation to determine whether the law has been effective in accomplishing its goals.

The findings shall be submitted to the Congress of the Philippines.

The NIC shall conduct an annual assessment on the compliance of these banking institutions with applicable regulations on credit quotas for innovation development, and submit its recommendations to the BSP.

The BSP shall impose administrative sanctions and other penalties on the lending institutions for noncompliance with the preceding paragraphs.1шphi1 Penalties on noncompliance/under-compliance shall be computed at one-half of one percent (0.5%) of the amount of noncompliance/under-compliance and shall be directed towards innovation development. Ninety percent (90%) of the penalties collected shall go to the Innovation Fund and the remaining ten percent (10%) shall be given to the BSP to cover administrative expenses.

The BSP and the NIC, in consultation with the concerned agencies and sectors, shall promulgate such rules and regulations as may be necessary to implement Sections 22 and 23 of this Act within ninety (90) days after the effectivity of this Act. Such rules and regulations shall, among others, provide for modes of alternative compliance to the credit quota allocation and take into account the varying scale and maturity of operation of the banks in the country. Such rules and regulations shah take effect fifteen (15) days after its publication in a newspaper of general circulation in the Philippines.