BANKING LAWS JURISPRUDENCE

Goldenway v. Equitable Bank

Section 47 did not divest juridical persons of the right to redeem their foreclosed properties but only
modified the time for the exercise of such right by reducing the one-year period originally provided in Act No.
3135. The new redemption period commences from the date of foreclosure sale, and expires upon registration of
the certificate of sale or three months after foreclosure, whichever is earlier. There is likewise no retroactive
application of the new redemption period because Section 47 exempts from its operation those properties
foreclosed prior to its effectivity and whose owners shall retain their redemption rights under Act No. 3135.
It does not also infringe the equal protection clause. The difference in the treatment of juridical persons
and natural persons was based on the nature of the properties foreclosed – whether these are used as residence,
for which the more liberal one-year redemption period is retained, or used for industrial or commercial purposes,
in which case a shorter term is deemed necessary to reduce the period of uncertainty in the ownership of property
and enable mortgagee-banks to dispose sooner of these acquired assets.
BSB v. SALLY GO
Any exception to the rule of absolute confidentiality must be specifically legislated. Section 2 of the Bank
Secrecy Act itself prescribes exceptions whereby these bank accounts may be examined by "any person,
government official, bureau or office"; namely when:
(1) upon written permission of the depositor;
(2) in cases of impeachment;
(3) the examination of bank accounts is upon order of a competent court in cases of bribery or
dereliction of duty of public officials; and
(4) the money deposited or invested is the subject matter of the litigation. Section 8 of R.A. Act No.
3019, the Anti-Graft and Corrupt Practices Act, has been recognized by this Court as constituting an
additional exception to the rule of absolute confidentiality,92 and there have been other similar
recognitions as well.

PDIC v. CA
The head office of a bank and its branches are considered as one under the eyes of the law. While branches
are treated as separate business units for commercial and financial reporting purposes, in the end, the head office
remains responsible and answerable for the liabilities of its branches which are under its supervision and control.
UCPB V. Ramos
Banking institutions engaged in the grant of loans are expected to ascertain and verify the identities of the
persons it transacts business with. The business of bank is one affected with public interest, for which reason the
bank should guard against loss due to negligence or bad faith. In approving the loan of an applicant, the bank
itself with proper information regarding its debtors. (Degree of Diligence of Banks for their Loan Transactions)
Consolidated Rural Bank vs. CA
Unlike private individuals, mortgagee-bank is expected to exercise a greater care and prudence in its
dealings, including those involving registered lands. Consequently, mortgagee-banks cannot just rely on the fact
of certificate of title of the subject property, and that judicial notice is taken of the standard practice for banks
before they approve a loan to send representatives to the premises of the land offered as collateral and to
investigate the ownership thereof. Failure to comply with such standards makes the bank a mortgagee in bad faith.
BSP Monetary Board and Chuchi Fonacier vs. Hon. Antonio-Valenzuela, et. al.
The actions of the Monetary Board under Sections 29 and 30 of R.A 7653, which pertain to the power to
appoint a conservator or a receiver for a bank, may not be restrained or set aside by the court, [actions of MB is
final and executory] except on petition for certiorari on the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. Hence, the
issuance by the RTC of writs of preliminary injunction is an unwarranted interference with the powers of the
Monetary Board. The close now, hear later doctrine has already been justified as a measure for the protection of
the public interest.
Villanueva v. CA, G.R. No. 114870, May 26, 1995
Where upon the insolvency of a bank, a receiver therefor is appointed, the assets of the bank pass beyond
its control into the possession and control of the receiver whose duty it is to administer the assets for the benefit
of the creditors of the bank. Thus, the appointment of a receiver operates to suspend the authority of the bank and
of its directors and officers over its property and effects, such authority being reposed in the receiver.
Abacus Real Estate Development Center, Inc. v. Manila Banking Corp, G.R. No. 162270, Apr. 6, 2005
A receiver can only perform acts of administration and not acts of dominion. The receiver cannot approve
an option to purchase real property. He has only the authority to administer the same for the benefit of its creditors.
Salud v. Central Bank, G.R. No. L-17630, August 19, 1986
While resolutions of the Monetary Board forbidding a bank to do business on account of a condition of
insolvency and appointing a receiver to take charge of the bank’s assets or determining whether the bank may be
rehabilitated or should be liquidated are by law “final and executory.” However, they can be set aside by the court
on one specific ground - if the action is plainly arbitrary and made in bad faith. Such contention can be asserted
as an affirmative defense or a counterclaim in the proceeding for assistance in liquidation.
Ong v. CA, G.R. No. 112830, Feb. 1, 1996
All claims against the insolvent bank should be filed in the liquidation proceeding. It is not necessary that
a claim be initially disputed in a court or agency before it is filed with the liquidation court.
Ejercito v. Sandiganbayan, G.R. No. 157294-95, November 30, 2006
The money deposited under the trust agreement (“Trust account”) is intended not merely to remain with
the bank but to be invested by it elsewhere. To hold that this type of account is not protected by R.A. 1405 would
encourage private hoarding of funds that could otherwise be invested by banks in other ventures, contrary to the
policy behind the law.
Salvacion v. Central Bank of the Philippines
The exemption from garnishment of foreign currency deposits under R.A. 6426 cannot be invoked to
escape liability for the damages to the victim. The garnishment of the transient foreigner’s foreign currency
deposit should be allowed to prevent injustice and for equitable grounds. The law was enacted to encourage
foreign currency deposit and not to benefit a wrongdoer.
Republic v. Sandiganbayan, G.R. No. 166859, 169203, 180702, April 12, 2011
Violation of DOSRI is a crime and carries with it penal sanction. It does not make the transaction void but
only renders the responsible officers and directors criminally liable.
BANKING LAWS (LEX PARETO NOTES)

I. GENERAL BANKING LAWS OF 2000

(1) Sec. 3.1 – Classes of Banks (6)
(2) Sec. 35 – Limit on Loan/Credit Accommodation (1)
(3) Sec. 36 – Restrictions (DOSRI) (2)
(4) Sec. 47 - Foreclosure of Real Estate Mortgage (3)
(5) Sec. 70 – Prohibited Transactions after the bank becomes insolvent (2)

II. NEW CENTRAL BANK ACT

(1) Sec. 3 – BSP (2)
(2) Sec. 30 – Receivership and Liquidation (5)
(3) Sec. 94 – Purpose of Requiring Maintain Balance (1)
(4) Sec. 95 – Bank deposits vs Bank Substitutes (2)

III. SECRECY OF BANK DEPOSIT ACT

(1) Sec. 2 - Secrecy of Bank Deposit (16)

IV. PHILIPPINE DEPOSIT INSURANCE CORP

(1) Sec. 3 – Types of Account Covered by PDIC (1)
(2) Sec. 4(f) – Accounts Covered (1)
(3) Sec. 4(g) – Accounts not Covered (1)

V. TRUTH IN LENDING ACT

(1) Sec. 4 – Disclosure Requirement (2)
(2) Sec. 6 – Violation of Truth in Lending Act (2)

VI. UNIFORM CURRENCY ACT

(1) Sec. 1 – Uniform Currency (2)

VII. FOREIGN CURRENCY DEPOSIT ACT

(1) Sec. 2 – Declaration of Policy (1)

VIII. ANTI-MONEY LAUNDERING LAW

(1) Sec. 3 – Definition (5)