Banking Edited

REVIEWER IN COMMERCIAL LAW
Table of Contents
BANKING LAWS
CHAPTER I. GENERAL BANKING LAW OF 2000 (RA 8791) I. General Concepts A. Definition B. Nature of Business II. Classification of Banks III. Authority of the BSP over Banks A. Regulatory Powers B. Supervisory Powers C. Policy Direction IV. Organization of Banks A. Conditions for Organization B. Ownership of Banks C. Directors and Officers V. Operation of Banks A. Core Banking B. Operations of a KB and UB C. Prudential Measures D. Other Functions E. Prohibited Functions F. Some Requirements for the Operation of Banks VI. Foreign Banks CHAPTER II. THE NEW CENTRAL BANK ACT (RA 7653) I. General Provision II. Organization of the BSP A. Monetary Board B. Governor/Deputy Governor III. Operation of the BSP A. Supervision and Examination B. Handling of Banks in Distress C. Monetary Administration D. As Banker and Financial Adviser of the Government E. Other Operations F. Prohibited Operations CHAPTER III. LAW ON SECRECY OF BANK DEPOSITS (RA 1405) I. Purposes II. Coverage III. Prohibited Acts IV. Exceptions V. Penalty CHAPTER IV. TRUTH IN LENDING ACT (RA 3765) I. Policy II. Disclosure Statement III. Coverage IV. Sanctions 132 132 132 132 133 133 133 133 133 134 134 134 135 137 137 139 139 142 145 146 147 149 149 149 149 150 150 150 150 152 156 157 157 CHAPTER V. ANTI-MONEY LAUNDERING ACT (RA 9160 as amended by RA 9194) I. Policies II. Coverage III. Obligations of Covered Institutions A. Customer Identification B. Record Keeping C. Reporting of Covered and Suspicious Transactions IV. Freeze Order V. Forfeiture Provisions VI. Anti-Money Laundering Council CHAPTER VI. FOREIGN CURRENCY DEPOSIT ACT (RA 6426) I. Confidentiality II. Privileges
162 162 162 163 163 163 163 164 164 165
167 167 167
159 159 159 159 159 160 161 161 161 161 161
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BANKING LAWs
Chapter I. General Banking Law of 2000
Banking Laws
FACULTY-STUDENT EDITORIAL BOARD AND LECTURES COMMITTEE Prof. Gwen Grecia-de Vera
FACULTY EDITOR
COMMERCIAL LAW Krizelle Poblacion Christina Ortua

SUBJECT EDITORS
LECTURES Edel Cruz

HEAD
ACADEMICS COMMITTEE Samantha Poblacion

DIRECTOR FOR ACADEMICS EDITOR-IN-CHIEF
CORPORATION LAW Rency Corrige

LEAD WRITER
Jason Mendoza
DEPUTY HEAD
Rania Joya
DEPUTY DIRECTOR FOR ACADEMICS LAYOUT HEAD
Malds Menzon
LOGISTICS, HR
Ben Evangelista Raissa Villanueva

WRITERS
-------Kae Guerrero
PRINTING
AND
-------Leo Zulueta
LOGO, COVER
AND
TEMPLATE DESIGN
DISTRIBUTION
Chapter I. General Banking Law of 2000 (RA 8791)

I. II. III. GENERAL CONCEPTS A. DEFINITION B. NATURE OF BUSINESS CLASSIFICATION OF BANKS AUTHORITY OF THE BSP OVER BANKS A. REGULATORY POWERS B. SUPERVISORY POWERS C. POLICY DIRECTION ORGANIZATION OF BANKS A. CONDITIONS FOR ORGANIZATION B. OWNERSHIP OF BANKS C. DIRECTORS AND OFFICERS OPERATION OF BANKS A. CORE BANKING B. OPERATIONS OF A KB AND UB C. PRUDENTIAL MEASURES D. OTHER FUNCTIONS E. PROHIBITED FUNCTIONS F. SOME REQUIREMENTS FOR THE OPERATION OF BANKS FOREIGN BANKS
As opposed to Quasi-banks: Quasi-banks (QB) refer to entities engaged in the borrowing of funds through the issuance, endorsement or assignment with recourse or acceptance of deposit substitutes for purposes of relending or purchasing of receivables and other obligations. (last paragraph of Sec. 4)
IV.
B. Nature of Business
Imbued with Public Interest: The banking industry is declared as indispensable to the national interest. (Sec. 22) Fiduciary Nature of Banks Failure on the part of the bank to satisfy the degree of diligence required of banks may warrant the award of damages Under Sec. 2, the degree of diligence is high standards of integrity and performance, however, SC decisions has not been uniform as to the type of diligence required Highest degree of care (BPI vs. CA and Napiza 2000) Higher than diligence of a good father of a family (CBTC vs. CA 2003) Highest degree of care and diligence (Samsung Construction vs FEBTC 2004) notwithstanding the amount of diligence required, a bank is not expected to be infallible (Prudential Bank vs. CA 2000)
V.
VI.
Policy of the Law: To promote and maintain a stable and efficient banking and financial system that is globally competitive, dynamic and responsive to the demands of a developing economy. (Sec. 2)
I. General Concepts A. Definition

Banks shall refer to entities engaged in the lending of funds obtained in the form of deposits. (Sec. 3.1)
Simex International vs. CA 183 SCRA 360 (1990): As a business affected with public interest and because of the nature of its functions, the bank is under obligation to treat the accounts of its deposits with meticulous care, always having in mind the fiduciary nature of their relationship.
II. Classification of Banks (Sec. 3.2) Universal Banks. (UB) These are those that used to be called expanded commercial banks and whose operations are now primarily governed by the GBL. They can exercise the powers of an investment house and invest in nonallied enterprises. They have the highest capitalization requirement. Commercial Banks. (KB) These are ordinary or regular commercial banks, as distinguished from a universal bank. They have a lower capitalization requirement than a UB and cannot exercise the powers of an investment house and invest in non-allied enterprises. Thrift Banks. These are a. savings and mortgage banks, b. stock savings and associations, and c. private development banks
application to all institutions or functions covered; b. Conduct of examination to determine compliance with laws and regulations; c. Overseeing compliance with laws and regulations; d. Regular investigation (not oftener than once a year) to determine whether an institution is conducting its business on safe or sound basis; e. Inquiring into solvency and liquidity of the institution f. Enforcing prompt corrective action. (Sec. 4) B. Examination by BSP -The BSB shall, when examining a bank, have the authority to examine an enterprise which is wholly or majorityowned or controlled bank (Sec. 7) C. Authority over Quasi-Banks and Trust Entities -BSP shall have supervision over operations of and exercise regulatory powers over quasi banks, trust entities and other financial institutions which under special laws are subject to BSP Supervision. D. BSP Powers on Policy, Direction; Ratios, Ceilings and Limitations 1. BSP shall provide policy direction in the areas of money, banking and credit -the MB may prescribe rations, ceilings, limitations, or other forms of regulation on the different types of accounts and practices of banks and quasi-banks -this should conform to internationally accepted standards 2. MB may exempt particular categories of transactions from such ratios, ceilings and limitations, but not limited to exceptional cases, or to enable a bank or quasi-bank under rehabilitation or during a merger or consolidation, to continue in business with safety to its creditors, depositors and general public. (Sec. 5)
loan
Cooperative Banks. These are banks organized primarily to make financial and credit services available to cooperative banks. Islamic Banks. These are banks whose business dealings and activities are subject to the basic principles and rulings of Islamic Sharia, such as the Al Amanah Islamic Investment Bank of the Philippines which was created by RA 6848
as determined by the Monetary Board.
Other classifications of banks
IV. Organization of Banks A. Conditions for Organization

Conditions for organization: 1. Entity must be a stock corporation and must only issue par value stocks; 2. Its funds must be obtained from the public, (20 or more persons); and 3. Minimum capital requirements prescribed by the MB for each
III. Authority Banks
of
the
BSP
Over
A. Supervision over operations and activities a. Issuance of rules of conduct or standards of operation for uniform
category of banks must be satisfied (Sec. 8, Sec. 9) RULE: Prohibition on Treasury Stocks, unless: 1. Authorized by the MB 2. The stock so purchased or acquired shall within 6 months from the time the of its purchase or acquisition, be sold or disposed of at a public or private sale. (Sec. 10) Shares of the parent bank held by a subsidiary financial allied undertaking in a consolidated statement of condition are considered treasury shares. (BSP Circular No. 280 dated March 29, 2001, as amended) No BSP certificate of authority, no SEC registration of any bank (Sec. 14) Requirements for issuance of certificate of authority: 1. All requirements of existing laws and regulations have been complied with 2. The public interest and economic conditions justify the authorization 3. The amount of capital, the financing, organization, direction and administration, as well as the integrity and responsibility of the organizers and administrators reasonably assure the safety of deposits and the public interest (Sec. 14.1 to 14.3)
The citizenship of the corporation which is a stockholder in a bank shall follow the citizenship of the controlling stockholders of the corporation, irrespective of the place of incorporation. (Sec. 11) Controlling stockholders mean individuals holding more than 50% of the voting stock of the corporate stockholder of the bank. (BSP Circular No. 256) Full disclosure of stockholdings of family groups or related interests: Family group means individuals related to each other within the fourth degree of consanguinity or affinity, legitimate or common-law (Sec. 12) Related interest means two or more corporations owned or controlled by the same family group or same group of persons. (Sec. 13) Board of Directors: At least 5, and a maximum of 15 members of the board of directors of bank, 2 of whom shall be independent directors. (Sec. 15) Independent Director: shall mean a person other than an officer or employee of the bank, its subsidiaries or affiliates or related interests. (Sec. 15) In the case of a bank merger or consolidation, the number of directors shall not exceed 21. (Sec. 17)
C. Fit and Proper Rule B. Ownership of Banks

Stockholdings restriction: a. Filipinos and domestic non-bank corporation, individually, may own up to 40% of the voting stock of a domestic bank b. Foreign individuals and non-bank corporations, aggregately, may own or control up to 40% of the voting stock of a domestic bank. (Sec. 11; BSP Circular No. 256, dated August 15, 2000) However, under Sec. 8 of RA 7721, Philippine corporations whose shares of stock are listed in the PSE or are of long standing for at least 10 years shall have the right to acquire, purchase or own up to 60% of the voting stock of a domestic bank. Grandfather rule: To maintain the quality of bank management and to afford better protection to depositors and the public in general, the Monetary Board may a. Prescribe, pass upon and review the qualifications and disqualifications of individuals elected or appointed bank directors or officers b. Disqualify, suspend or remove any bank director or officer who commits or omits an act which render him unfit for the position. (Sec. 16) Prohibition on Public Officials as officers of banks: RULE: No appointive or elective official whether full-time or part-time shall at the same time serve as officer of any private bank. EXCEPTIONS: a. otherwise provided in the Rural Banks Act,
b. in cases where such service is incident to financial assistance provided by the government or a government-owned or -controlled corporation to the bank c. otherwise provided under existing laws (Sec.19) Responsibility of directors for corporate governance: The board of directors is primarily responsible for the corporate governance of the bank/quasibank/trust entity. To ensure good governance of the bank/quasi-bank/trust entity, the board of directors should establish strategic objectives, policies and procedures that will guide and direct the activities of the bank/quasi-bank/ trust entity and the means to attain the same as well as the mechanism for monitoring managements performance. (BSP Circular 283)
PCI Bank vs. CA, 2001 As a general rule, a banking corporation is liable for the wrongful or tortuous acts and declarations of its officers or agents within the course and scope of their employment. A bank holding out its officers and agents as worthy of confidence will not be permitted to profit by the frauds these officers or agents were enabled to perpetrate in the apparent course of their employment; nor will it be permitted to shirk its responsibility for such frauds, even though no benefit may accrue to the bank therefrom.
Banks or any of their branches or offices may open for business on Saturdays, Sundays or holidays for at least 3 hours a day; Provided that banks which opt to open on days other than working days shall report to the BSP the additional days during which they or their branches or offices shall transact business. (Sec. 21) Bank Branches: UBs or KBs may open branches or other offices within or outside the Philippines upon prior approval of the BSP. (Sec. 20) A bank and its branches and offices shall be treated as one unit. (Sec. 20) Strikes and Lockouts: Notwithstanding the provisions of any law to the contrary, any strike or lockout involving banks, if unsettled after 7 calendar days shall be reported by the BSP to the Secretary of Labor who may assume jurisdiction over the dispute or decide it or certify the same to the NLRC for compulsory arbitration. However, the President of the Philippines may at any time intervene and assume jurisdiction over such labor dispute in order to settle or terminate the same. (Sec. 22)
A. Core Banking 1. Deposit Function

Only a UB or KB can accept demand deposits Exception: Banks other than a UB or KB with prior approval of, and subject to such conditions and rules as may be prescribed by the Monetary Board (Sec. 33) Types of Deposits: 1. Time Deposit - Interest rate stipulated depending on the number of days. During this period, the money deposited cannot be withdrawn. High interest rates. 2. Savings Deposit - Bank pays an interest rate, but not as high as time deposits. 3. Demand Deposits/Current Accounts - No interest is paid by the bank because the depositor can take out his funds any time. It is called demand deposit because the depositor can withdraw the money he deposited on the very same day when he
When Monetary Board may regulate the compensation and other benefits of directors and officers: Only in exceptional cases and when the circumstances warrant, such as but not limited to: 1. when a bank is under comptrollership or conservatorship 2. when a bank is found by the Monetary Board to be conducting business in an unsafe or unsound manner 3. when a bank is found by the Monetary Board to be in an unsatisfactory financial condition. (Sec. 18)
V. Operation of Banks
Banking Days and Hours: All banks including their branches and offices shall transact business on all working days (Mondays to Fridays, except holidays) for at least 6 hours a day. (Sec. 21)
deposited it. (Villanueva, Commercial Law Review, opinion) Presumption of ownership of deposits: It is presumed that money deposited in a bank account belongs to the person in whose name the deposit account is opened.
BPI v. CA (1994) A bank is under no duty or obligation to make an application or set-off against the deposit accounts of a borrower. To apply the deposit to the payment of a loan is a privilege, a right of set-off which the bank has the option to exercise, but not the obligation. CA Agro-industrial Dev. Corp. v. CA (1983) The rent of safety deposit boxes is a special kind of deposit and cannot be characterized as an ordinary contract of lease because the full and absolute possession and control of the deposit box is not given to the renters. The prevailing rule is that the relation between the bank renting out and the renter is that of bailer and bailee the bailment being for hire and mutual benefit.
b. Shall have the right to demand immediate repayment or liquidation of the obligation (Sec. 40) Limit on Loans, Credit Accommodations and Guarantees:
Real Estate Shall not exceed 75% of the appraised value of the respective reas estate security, plus 60% of the appraised value of the insured improvements, and such loans may be made to the owner of the real estate or to his assignees EXC: the Monetary Board otherwise prescribes (Sec. 37) Shall not exceed 75% of the appraised value of the security, and such loans and other credit accommodations may be made to the title-holder of the chattels and intangible properties or his assignees EXC: the Monetary Board otherwise prescribes (Sec. 38)
Security of chattels and intagible properties (patents, trademarks, tade names, and copyrights)
2. Loan Function
Know your customer rule: Before granting a loan or other credit accommodation, a bank must ascertain that the debtor is capable of fulfilling its commitments to the bank. (Sec. 40) The bank may demand from its credit applicants a statement of their assets and liabilities and of their income and expenditure and such information as may be prescribed by law or by rules and regulations of MB to enable the bank to properly evaluate the credit application which includes the corresponding financial statements submitted for taxation purposes to the BIR. (Sec. 40) Credit enhancement If the borrower is less than creditworthy, third persons may enhance his credit by providing guarantees and other security devices in favor of the bank. (Morales, The Philippine General Banking Law, opinion) If there is material misrepresentation, the bank may: a. Terminate any loan or other credit accommodation granted on the basis of said statements; and
Grant of Loans: a. Only in amounts and for the periods of time essential for the effective completion of the operations to be financed (Sec. 39) b. Consistent with safe and sound banking practices (Sec. 39) Purpose of Loans: Purpose must be stated in the application and in the contract between the bank and the borrower. (Sec. 39) Effect of lack of banks prior approval: The bank shall have the right to terminate the loan or other credit accommodation and demand immediate repayment of the obligation. (Sec. 39) Amortization on Loans and Other Credit Accommodations: a. In case of loans and other credit accommodations with maturities of more than 5 years, provisions must be made for periodic amortization payments, but such payments must be made at least annually: Provided, however, That when the borrowed funds are to be used for purposes which do not initially produce revenues adequate for regular amortization payments therefrom, the bank may permit the initial amortization payment to be deferred until such time as said revenues are sufficient for such purpose, but in no
case shall the initial amortization date be later than 5 years from the date on which the loan or other credit accommodation is granted. b. In case of loans and other credit accommodations to microfinance sectors, the schedule of loan amortization shall take into consideration the projected cash flow of the borrower and adopt this into the terms and conditions formulated by banks.(Sec. 44) Prepayment of Loans by Borrower: A borrower may prepay the unpaid balance of any bank loan and other credit accommodation: a. At any time prior to the agreed maturity date b. In whole or in part c. Subject to such reasonable terms and conditions as may be agreed upon between the bank and its borrower. (Sec. 45) Development Assistance Incentives: The BSP shall provide incentives to banks which, without government guarantee, extend loans to finance educational institutions, cooperatives, hospitals and other medical services, socialized or low cost housing, local government units and other activities with social content. (Sec. 46)
Necessary powers of a KB: a. Accepting drafts b. Issuing letters of credit c. Discounting and negotiating promissory notes, drafts, bills of exchange, and other evidence of debt d. Accepting or creating demand deposits e. Receiving other types of deposits and deposit substitutes f. Buying and selling foreign exchange and gold or silver bullion g. Acquiring marketable bonds and other debt securities h. Extending credit All are subject to such rules as the Monetary Board may promulgate. (Sec. 29) Equity investments of KB: 1. The total investment in equities of allied enterprises shall not exceed 35% of the net worth of the bank 2. The equity investment in any one enterprise shall not exceed 25% of the net worth of the bank Equity investments of a KB in financial allied enterprises: 1. A KB may own up to 100% of the equity of a thrift bank or a rural bank 2. For other financial allied enterprises, including another bank, such investment shall remain a minority holding in that enterprise. (Sec. 31) Equity investments of a KB in nonfinancial allied enterprises: A KB may own up to 100% of the equity in a non-financial allied enterprise. (Sec. 32) Equity investments of UB: 1. The total investment in equities of allied and non-allied enterprises shall not exceed 50% of the net worth of the bank 2. The equity investment in any one enterprise, whether allied or nonallied, shall not exceed 25% of the net worth of the bank EXCEPTTION: the Monetary Board otherwise prescribes (Sec. 30) Equity investments of a UB in financial allied enterprises: 1. A UB may own up to 100% of the equity of a thrift bank, a rural bank, or a financial allied enterprise.
B. Operations of a KB and UB
Powers
KB a. gen. powers incident to corporations b. all such powers as may be necessary to carry on the business of commercial banking (Sec. 29)
Equity investment s
allied enterprises financial or non-financial (Sec. 30)
UB a. gen. powers incident to corporations b. all such powers as may be necessary to carry on the business of commercial banking c. powers of an investment house d. power to invest in non-allied enterprises (Sec. 23) Allied and nonallied enterprises financial or non-financial (Sec. 24)
2. A publicly-listed UB or KB may own

up to 100% of the voting stock of only one other UB or KB (SEC. 25) Equity investments of a UB in nonfinancial allied enterprises: A UB may own up to 100% of the equity in a non-financial allied enterprise. (Sec. 26) Equity investments of a UB in nonallied enterprises: The equity investment of a UB, or of its wholly or majority-owned subsidiaries, in a single non-allied enterprise shall not exceed 35% of the total equity in that enterprise nor shall it exceed 35% of the voting stock in that enterprise. (Sec. 27) Equity investments in quasi-banks: 40% equity investment for both UB and KB (Sec. 28)
UB Allied Enterprises -Total equity investment -investment enterprise in 1 -max 50% of networth -max 25% of networth (Sec.24) KB -max 35% of networth -max 25% of networth (Sec. 30)
1. Capital Adequacy
A bank must conform to the risk-based capital ratio prescribed by the MB EXCEPT: a. In case of a bank merger or consolidation, b. When a bank is under rehabilitation under a program approved by the BSP (Sec. 34) c. The MB may alter or suspend compliance with such ratio whenever necessary for a maximum period of 1 year Risk-based capital ratio: The minimum ratio which the net worth of a bank must bear to its total risk assets which may include contingent accounts [i.e. net worth : total risk assets] (Sec. 34) Purpose: A bank must not be allowed to expand the volume of its loans and investments in a manner that is disproportionate to its net worth. (Morales, The Philippine General Banking Law, opinion) Effect of non-compliance: 1. The MB may limit or prohibit the distribution of net profits by such bank and may require that part or all of the net profits be used to increase the capital accounts of the bank until the minimum requirement has been met. 2. The MB may restrict or prohibit the acquisition of major assets and the making of new investments by the bank, with the exception of purchases of readily marketable evidences of indebtedness of the RP and the BSP and any other evidences of indebtedness or obligations the servicing and repayment of which are fully guaranteed by the RP, until the minimum required capital ratio has been restored. (Sec. 33)
Financial Allied - Thrift/rural banks -other financial allied -publicly listed KB/UB
Quasi-Banks
NonFinancial Allied Non-Allied Enterprises
-100% -100% equity equity -100% -minority equity holding -100% (Sec. 31) voting stock of only 1 other KB/UB (Sec. 25) May be limited by MB to 40% to promote competitive conditions in financial markets (Sec.28) 100% 100% equity equity (Sec. 26) (Sec.32) Max 35% Not of total allowed to equity in a invest in single non-allied enterprise, enterprise max 35% of voting stock in that enterprise (Sec. 27)
2. Single Borrowers Limit

The total loans, credit accommodations and guarantees that may be extended by a bank to any person, partnership, association, or corporation or other entity shall at no time exceed 20% of the net worth of such bank. (Sec. 35.1) EXCEPTIONS: 1. The Monetary Board otherwise prescribes for reasons of national interest (Sec. 35.1)
C. Prudential Measures
2. Wholesale lending activities of government banks to particiapting institutions for relending to end-user borrowers: separate limit of 35% net worth. (BSP Circular No. 425 dated Mach 25, 2004) Increase of limit: The Monetary Board may increase the limit prescribed by an additional 10% of the net worth, when: a. The additional liabilities of any borrower are adequately secured by trust receipts, shipping documents, warehouse receipts or other similar documents transferring or securing title b. Covering readily marketable, nonperishable goods c. Which must be fully covered by insurance (Sec. 35.2) Purpose: To prevent the bank from making excessive loans and other credit accommodations to a single borrower or corporate group, including guarantees for the account of such borrower or group. Tha bank is prohibited from placing many eggs in the basket of one client. [It] is a damage-control mechanism [and] a device for risk amelioration. (Morales, The Philippine General Banking Law, opinion) Basis for determining compliance: The basis for determining compliance with the SBL is the total credit commitment of the bank to the borrower. (Sec. 35.1) Inclusions in the ceiling: a. the direct liability of the maker or acceptor of paper discounted with or sold to such bank and the liability of a general indorser, drawer or guarantor who obtains a loan or other credit accommodation from or discounts paper with or sells papers to such bank; b. in the case of an individual who owns or controls a majority interest in a corporation, partnership, association or any other entity, the liabilities of said entities to such bank; c. in the case of a corporation, all liabilities to such bank of all subsidiaries in which such corporation owns or controls a majority interest; and d. in the case of a partnership, association or other entity, the
liabilities of the members thereof to such bank. (35.3) Guidelines on the wholesale lending of government banks: a. it shall apply only to loans granted by participating financial institutions (PFIs) on a wholesale bases for on lending to end-user borrowers b. it shall apply only to loan programs funded by multilateral, international, or local development agencies, organizations, or institutions, especially designed for wholesale lending activities of government banks c. the end-user borrowers of the PFIs shall be subject to the 25% SBL, not the increased ceiling of 35%; and d. government banks shall observe appropriate criteria for accrediting PFIs and for the grant/renewal of credit lines to accredited PFIs BSP Circular No. 425 dated Mach 25, 2004) Exclusions from the ceiling: Loans and other credit accommodations a. secured by obligations of the BSP or of the Philippine Government b. fully guaranteed by the government as to the payment of principal and interest c. covered by assignment of deposits maintained in the lending bank and held in the Philippines d. under letters of credits to the extent covered by margin deposits e. specified by the Monetary Board as non-risk items (Sec. 35.5) Combination of liabilities: The MB may prescribe the combination of the liabilities of subsidiary corporations or members of the partnership, association, entity or such individual under certain circumstances, including but not limited to any of the following situations: a. the parent corporation, partnership, association, entity or individual guarantees the repayment of the liabilities; b. the liabilities were incurred for the accommodation of the parent corporation or another subsidiary or of the partnership or association or entity or such individual; or c. the subsidiaries though separate entities operate merely as departments or divisions of a single entity. (35.4)
Loans and other credit accommodations, deposits maintained with, and usual guaranteed by a bank to any other bank or non-bank entity, whether locally or abroad, shall be subject to the limits as herein prescribed. (35.6)
A DOSRI borrower is required to waive the secrecy of his deposits of whatever nature in all banks in the Philippines. (Sec. 26, New Central Bank Act) Purpose: To prevent the bank from becoming a captive source of finance for DOSRI. (Morales, The Philippine General Banking Law, opinion)
3. DOSRI (Directors, Officers, Stockholders and their Related Interests)

No director or officer of any bank a. shall, directly or indirectly, for himself or as the representative or agent of others, borrow from such bank nor b. shall he become a guarantor, endorser or surety for loans from such bank to others, or in any manner be an obligor or incur any contractual liability to the bank EXCEPTIONS: 1. valid insider lending (Sec. 36) 2. loans, credit accommodations and guarantees extended by a cooperative bank to its cooperative shareholders (Sec. 36) Requirements for valid insider lending: a. in the regular course of business b. upon terms not less favorable to the bank than those offered to others (Sec. 36) c. there is a written approval of the majority of all the directors of the bank, excluding the director concerned. (Except: granted to officers under a fringe benefit plan approved by the BSP (Sec. 36)) d. the required approval shall be entered upon the record of the bank and a copy of such entry shall be transmitted forthwith to the appropriate supervising and examining department of the BSP (Sec. 36) e. limited to an amount equivalent to the DOSRI borrowers respective unencumbered deposits and book value of their paid-in capital contribution in the bank EXC: 1. non-risk items 2. loans in the form of fringe benefits (Sec. 36)
4. Loan-Loss Provisioning
The following are subject to regulation by the Monetary Board a. the amount of reserves for bad debts or doubtful accounts or other contingencies. b. the writing off of loans, other credit accommodations, advances and other assets (Sec. 49) Purpose: For effective banking supervision. There is a problem of mismatch when a loan becomes non-performing. The bank is paying interest on the money it borrowed from the depositors or other placers of funds, but is not recouping that interest from the loan it made. Eventually, the bank may have to write off loan losses against profits. To cushion this eventuality, the bank is required to set aside reserved for bad debts and other doubtful accounts or contingencies. (Morales, The Philippine General Banking Law, opinion)
5. Reserves
Purposes: a. To control the volume of money created by the credit operations of the banking system, the BSP requires all banks to maintain reserves against their deposit and deposit-substitute liabilities. b. As a ready source of funds that will respond to unusually large number of withdrawals or preterminations of deposits or deposit-substitutes, taking in the shape of a bank run. (Morales, The Philippine General Banking Law, opinion) Two types of reserves: a. Statutory legal reserve Now at 11% (BSP Circular No. 491 dated July 12, 2005)
For deposit-substitutes: 2% (BSP Circular No. 444 dated August 18, 2004) For foreign currency deposit units: 100% (BSP Circular No. 1389 dated April 13, 1993, as amended); 30% of this cover must be in the form of liquid assets (BSP Circular-Letter dated June 6, 1997, as cited in Morales) b. Liquidity reserve Now deposits should be placed in the Reserve Deposit Account of the BSP for at least 3 months (BSP Circular No. 539 dated August 9, 2006) The BSP shall not pay interest on the reserves maintained with it unless the Monetary Board decides otherwise as warranted by circumstances. (Sec. 94, New Central Bank Act)
exceed 50% of combined capital accounts b. The equity investment of a bank in another corporation engaged primarily in real estate shall be considered as part of the banks total investment in real estate, unless otherwise provided by the Monetary Board (Sec. 51) Exception: 1. Such as shall be mortgaged to it in good faith by way of security for debts; 2. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings; or 3. Such as it shall purchase at sales under judgments, decrees, mortgages, or trust deeds held by it and such as it shall purchase to secure debts due it. (Sec. 52) Any real property acquired or held under these circumstances shall be disposed of by the bank within a period of 5 years or as may be prescribed by the MB. (Sec. 52) Foreclosure of REM: A bank may foreclose, whether judicially or extrajudicially, any mortgage on real estate which is security for any loan or other credit accommodation granted (Sec. 47) Right of redemption of mortgagor: The mortgagor or debtor whose real property has been sold for the full or partial payment of his obligation shall have the right to redeem the property: within 1 year after the sale of the real estate by paying the amount due under the mortgage deed, with interest thereon at the rate specified in the mortgage, and all the costs and expenses incurred by the bank or institution from the sale and custody of said property less the income derived therefrom. (Sec. 47) Right of redemption of mortgagor who is a juridical person in an extrajudicial foreclosure: Redeem the property not after, the registration of the certificate of foreclosure sale with the applicable Register of Deeds which in no case shall be more than 3 months after foreclosure, whichever is earlier. (Sec. 47) Owners of property that has been sold in a foreclosure sale prior to the effectivity of
6. PDIC Insurance
Banks are required to insure their deposit liabilities with the PDIC. Partial Insurance: Each depositor is a beneficiary of the insurance for a maximum amount of P500,000, or its foreign currency equivalent in the case of an FCDU deposit. (RA 9576, 2009) Note: PDIC only insures deposit liabilities of a bank or banking institution which is engaged in the business of receiving deposits, or in the business of receiving deposits (Sec.5, RA 3591, as amended) Purpose: Full insurance might encourage risky banking activities = to limit moral hazard
D. Other Functions 1. Ownership of Real Property and Foreclosure of Real Estate Mortgage
A bank may acquire real estate as shall be necessary for its own use in the conduct of its business Conditions: a. The total investment in such real estate and improvements thereof including bank equipment shall not
the GBL shall retain their redemption rights until their expiration. (Sec. 47) The purchaser shall have the right to enter upon and take possession of such property immediately after the date of the confirmation of the auction sale and administer the same in accordance with law. (Sec. 47) Any petition in court to enjoin or restrain the conduct of foreclosure proceedings shall be given due course only upon the filing by the petitioner of a bond in an amount fixed by the court conditioned that he will pay all the damages which the bank may suffer by the enjoining or the restraint of the foreclosure proceeding.
interests, of such directors, officers and stockholders. (Sec. 80) Trust Business Requirements: 1. Registration of AOI and ByLaws of a Trust Entity: The SEC shall not register the AOI and ByLaws or any amendment thereto, of any trust entity, unless accompanied by a certificate of authority issued by the BSP. (Sec. 81)
2. Minimum Capitalization: (Sec.

82) Min. paid-in capital: a. if non-bank: combined capital accounts of not less than P250,000,000 (Subsec. 440Q.1 of the Manual of Regulations for Non-Bank Financial Institutions) b. if domestic bank: combined capital accounts must not be less than the min. capital prescribed by the Monetary Board for such bank but in no case be less than P250,000,000 (Subsec. 404.1.a of the Manual of Regulations for Banks) c. if stand-alone trust company (not affiliated to a bank): P300,000 (Morales, The Philippine General Banking Law) Combined capital accounts: the total of capital stock, retained earnings and profit and loss summary, net of (a) such unbooked valuation reserves and other capital adjustments as may be required by the BSP, and (b) total outstanding unsecured credit accommodations, both direct and indirect, to DOSRI Powers of a Trust Entity: a. Trust Business any activity resulting from trusteeship involving the appointment of a trustee by a trustor for the administration, holding, management of funds and/or properties of the trustor by the trustee for the use, benefit or advantage of the trustor or of beneficiaries b. Other fiduciary business any activity of a licensed trust bank resulting from a contract or agreement whereby the bank binds itself to render services or to act in a representative capacity such as in agency, guardianship, administratorship of wills, properties and estates, executorship, receivership, and other similar services which do not create or result in a trusteeship.
2. Trust Operations
Only a trust entity shall act as a trustee or administer any trust or hold property in trust or on deposit for the use, benefit, or on behoof of others. (Sec. 79) Trust Entity: A stock corporation or a person duly authorized by the Monetary Board to engage in trust business. (Sec. 79) Prudent Man Rule: A trust entity shall administer the funds or property under its custody with the diligence that a prudent man would exercise in the conduct of an enteprise of a like character and with similar aims. (Sec. 80) Rule on Self-Dealing: No trust entity shall engage in self-dealing except when: a. The transaction is specifically authorized by the trustor, and b. The relationship of the trustee and the other party involved is fully disclosed to the trustor or beneficiary of the trust prior to the transaction (Sec. 80) Self Dealing: Purchase or acquire property from Sell, transfer, assign, or lend money or property to Purchase debt instruments of, any of the departments, directors, officers, stockholders, or employees of the trust entity, relatives within the 1st degree of consanguinity or affinity, or the related
c. Investment
management activity any activity resulting from a contract or agreement primarily for financial return whereby the bank (the investment manager) binds itself to handle or manage investible funds or any investment portfolio in a representative capacity as financial or managing agent, adviser, consultant or administrator of financial or investment management, advisory, consultancy or any similar arrangement which does not create or result in a trusteeship. (Morales, The Philippine General Banking Law, opinion) Deposit requirement: Before transacting trust business, every trust entity shall deposit with the BSP, as security for the faithful performance of its trust duties, cash or securities cash or securities approved by the Monetary Board in an amount equal to or not less than P500,000 or such higher amount as may be fixed by the Monetary Board (Sec. 84) A trust entity so long as it shall continue to be solvent and comply with laws or regulations shall have the right: a. to collect the interest earned on such securities deposited with the BSP b. to exchange the securities for others, from time to time, with the approval of the BSP (Sec. 84) If the trust entity fails to comply with any law or regulation, the BSP shall retain such interest on the securities deposited with it for the benefit of rightful claimants. (Sec. 84) All claims rising out of the trust business of a trust entity shall have priority over all other claims as regards the deposit. (Sec. 84) Bond requirement: No bond or other security shall be required by the court from a trust entry for the faithful performance of its duties as courtappointed trustee, executor, administrator, guardian, receiver, or depositary. However, the court may, upon proper application with it showing special cause therefore, require the trust entity to post a
bond or other security for the protection of funds or property confided to such entity. (Sec. 86) Separation of Trust Business from General Business: The following must be kept separate and distinct: a. the trust business and all funds, properties or securities received by any trust entity as executor, administrator, guardian, trustee, receiver, or depositary from the general business including all other funds, properties, and assets of such trust entity b. the accounts of all such funds, properties, or securities from the accounts of the general business of the trust entity (Sec. 87) The separation of assets is warranted because the trust department is not the beneficial owner of the assets held in trust. (Morales, The Philippine General Banking Law, opinion) Investments of a Trust Entity Limitations: The lending and investment of funds and other assets acquired by a trust entity as executor, administrator, guardian, trustee, receiver or depositary of the estate of any minor or other incompetent person shall be limited to loans or investments as may be prescribed by law, the Monetary Board or any court of competent jurisdiction, EXCEPT: Otherwise directed by the instrument creating the trust (Sec. 88) Investments of a Trust Entity Real Estate Acquisition: Governed by Sec. 52. (Sec. 89) may acquire real estate which are: 1. mortgage to in good faith by way of security for debts 2. conveyed to it in satisfaction of debts previously contracted in the course of its dealings 3. purchased at sales under judgments, decrees, mortgages, or trust deeds held by it and purchased to secure debts due to it But such real property shall be disposed of within 5 years Investments of a Trust Entity Investment of Non-Trust Funds: The investment of funds other than trust funds of a trust entity which is a bank,
financing company or an investment house shall be governed by the relevant provisions of the GBL and other applicable laws. (Sec. 90) Sanctions and Penalties: A trust entity or any of its officers and directors found to have willfully violated any pertinent provisions of the GBL shall be subject to the sanction and penalties provided under Sec. 66 of the GBL and Sec. 36 and 37 of the New Central Bank Act. (Sec.91) under the GBL: suspension for the officers and directors and dissolution for the corporation under the NCBA: fines of P50,000 to P200,000, or imprisonment of 2 10 years, or both; and administrative sanctions, which include fines, suspension of certain privileges, revocation of license, etc. Exemption of Trust Assets from Claims: No assets held by a trust entity in its capacity as trustee shall be subject to any claims other than those of the parties interested in the specific trust. (Sec. 92)
NOTE: But a bank may be said to be allowed to act as a guarantor, as may be implied from the following provisions of the General Banking Law: a. Guarantees are now included in the computation of SBL b. No restatement of Sec.74 of GBA prohibiting the issuance of guarantees c.The recognition of the validity of guarantees by a bank to another bank. (Morales, The Philippine General Banking Law, opinion) Prohibited Transactions of Directors, Officers, Employees, or Agents of Any Bank: 1. Making false entries in any bank report or statement or participating in any fraudulent transaction, thereby affecting the financial interest of, or causing damage to, the bank or any person; 2. Without order of a court of competent jurisdiction, disclosing to any unauthorized person any information relative to the funds or properties in the custody of the bank belonging to private individuals, corporations, or any other entity: Provided, That with respect to bank deposits, the provisions of existing laws shall prevail; 3. Accepting gifts, fees or commissions or any other form of remuneration in connection with the approval of a loan or other credit accommodation from said bank; 4. Overvaluing or aiding the overvaluing of any security for the purpose of influencing in any way the actions of the bank or any bank; or 5. Outsourcing inherent banking functions. (SubSec. 55.1) Prohibited transactions of borrowers of bank 1. Fraudulently overvaluing property offered as security for a loan or other credit accommodation from the bank; 2. Furnishing false or misrepresenting or suppressing material facts for the purpose of obtaining, renewing, or increasing a loan or other credit accommodation or extending the period thereof; 3. Attempting to defraud the said bank in the event of a court action to
3. Other Banking Services

Other Banking Services 1. Receive in custody funds, documents and valuable objects; 2. Act as financial agent and buy and sell, by order of and for the account of their customers, shares, evidences of indebtedness and all types of securities; 3. Make collections and payments for the account of others and perform such other services for their customers as are not incompatible with banking business; 4. Upon prior approval of MB, act as managing agent, adviser, consultant or administrator of investment management/advisory/consultancy accounts; and 5. Rent out safety deposit boxes. (Sec. 53)
E. Prohibited Functions
Prohibition to act as insurer: A bank shall not directly engage in insurance business as the insurer. (Sec. 54)
recover a loan or other credit accommodation; or 4. Offering any director, officer, employee or agent of a bank any gift, fee, commission, or any other form of compensation in order to influence such persons into approving a loan or other credit accommodation application.(SubSec. 55.2) Prohibition on conduct of business in an unsafe or unsound manner: A bank must not conduct business in an unsafe or unsound manner. (Sec. 56) EFFECT OF VIOLATION: The MB may, without prejudice to the administrative sanctions provided in Sec. 37 of the NCBA, a. take action under Sec. 30 of the same Act b. and/or immediately exclude the erring bank from clearing, the provisions of law to the contrary notwithstanding. (Sec. 56) Prohibition on Dividend Declaration: No bank or QB shall declare dividends, if at the time of declaration: 1. Its clearing account with the BSP is overdrawn; or 2. It is deficient in the required liquidity floor for government deposits for 5 or more consecutive days; or 3. It does not comply with the liquidity standards/ratios prescribed by the BSP for purposes of determining funds available for dividend declaration; or 4. It has committed a major violation as may be determined by the BSP. (Sec. 57)
conduct, either personally or by a committee created by the board, an annual balance sheet audit of the bank, QB or trust entity to review the internal audit and control system of the bank, QB or trust entity and to submit a report of such audit. (Sec. 58) Financial Statements: Every bank, QB or trust entity shall submit to the appropriate supervising and examining department of the BSP financial statements in such form and frequency as may be prescribed by the BSP. (Sec. 60) Publication of Capital Stock: A bank, QB or trust entity incorporated under the laws of the Phils. shall not publish the amount of its authorized or subscribed capital stock without indicating at the same time and with equal prominence, the amount of its capital actually paid up. (Sec. 62) Electronic Transactions: The BSP shall have full authority to regulate the use of electronic devices, such as computers, and processes for recording, storing and transmitting information or data in connection with the operations of a bank, QB or trust entity, including the delivery of services and products to customers by such entity. (Sec. 59) Advertisement or Business Representation: No person, association, or corporation unless duly authorized to engage in the business of a bank, quasi-bank, trust entity, or savings and loan association shall advertise or hold itself out as being engaged in the business of such bank, quasi-bank, trust entity, or association, or use in connection with its business title, the word or words bank, banking, banker, quasi-bank, quasi-banking, quasi-banker, savings and loan association, trust corporation, trust company, or words of similar import or transact in any manner the business of any such bank, corporation or association. (Sec. 64) Penalties for Violation: Unless otherwise provided, the violation of any of the provisions of this Act shall be subject to Secs 34, 35, 36 and 37 of the NCBA. If the offender is a director or officer of a bank, quasi-bank or trust entity, the MB may also suspend or
F. Some Requirements for the Operation of Banks

Independent Auditor: The MB may require a bank, QB or trust entity to engage the services of an independent auditor to be chosen by the bank, QB or trust entity concerned from a list of CPAs acceptable to the MB. The MB may also direct the board of directors of a bank, QB, trusty entity and/or the individual members thereof, to
remove such director or officer. If the violation is committed by a corporation, such corporation may be dissolved by quo warranto proceedings instituted by the Sol.Gen.. (Sec. 66) Settlement of Disputes: The provisions of any law to the contrary notwithstanding, the BSP shall be consulted by other government agencies or instrumentalities in actions or proceedings initiated by or brought before them involving controversies in banks, QBs or trust entities arising out of and involving relations between and among their directors, officers or stockholders, as well as disputes between any or all of them and the bank, QBs or trust entity of which they are directors, officers or stockholders. (Sec. 63) Conservatorship: The grounds and procedure for placing a bank and quasi-bank under conservatorship as well as, the powers and duties of the conservator appointed for the bank shall be governed by the provisions of the New Central Bank Act. (Sec. 67) Voluntary Liquidation: In case of voluntary liquidation of any bank organized under the laws of the Philippines, or of any branch or office in the Philippines of a foreign bank, written notice of such liquidation shall be sent to the Monetary Board before such liquidation is undertaken (Sec. 68) Receivership and Involuntary Liquidation: The grounds and procedures for placing a bank and quasi-bank under receivership or liquidation, as well as the powers and duties of the receiver or liquidator appointed for the bank shall be governed by the New Central Bank Act. Provided, that the petitioner or plaintiff files with the clerk or judge of the court in which the action is pending a bond, executed in favor of the BSP, in an amount to be fixed by the court. (Sec. 69)
3. through the acquisition of voting stock in a domestic bank
If there are more than 1 local branches, all such branches shall be treated as 1 unit for the purpose of the GBL and all references to the Philippine branches of foreign banks shall be held to refer to such units (Sec. 74) The head office of such local branches shall fully guarantee the prompt payment of all liabilities of its Philippine branch in order to provide effective protection of the interests of the depositors and other creditors of the local branches. (Sec. 75) Residents and citizens of the Philippines who are creditors of the local branch shall have preferential rights to the assets of such branch in accordance with existing laws. (Sec. 75) The MB shall adopt measures as may be necessary to ensure that at all times the control of 70% of the resources or assets of the entire banking system is held by banks which are at least majority-owned by Filipinos. (Sec. 73) Any right, privilege or incentive granted to a foreign bank shall be equally enjoyed by and extended under the same conditions to banks organized under the Philippine laws. (Sec. 73) Summons and Legal Process: Service may be made upon:
a. the Philippine agent or head of any foreign bank designated to accept such service b. the Philippine agent or head authorized by the bank to accept such service c. the BSP Deputy Governor In-Charge of the supervising and examining departments
VI. Foreign Banks

Transacting Business Philippines - Ways: in the
1. through the establishment of local branches 2. through the conduct of offshore banking
Laws Applicable: In all matters not specifically covered by special provisions applicable only to a foreign bank or its branches and other offices in the Philippines any foreign bank licensed to do business in the Philippines shall be bound by the provisions of the GBL, all other laws, rules and regulations applicable to banks organized under the laws of the Philippines of the same class, except those that provide for the creation, formation, organization or dissolution of corporations or for the fixing of the relations, liabilities, responsibilities, or
duties of stockholders, members, directors or officers of corporations to each other or to the corporation. (Sec. 77) Revocation of License of a Foreign Bank: The Monetary Board may revoke the license to transact business in the Philippines of any foreign bank, if it finds that the foreign bank
a. is insolvent b. is in imminent danger of being insolvent c. if it continues to do business, will involve probable loss to those transacting business in the Philippines. (Sec. 78)
After the revocation of its license,
a. It shall be unlawful for any such foreign banks to transact business in the Philippines unless its license is renewed or reissued b. The BSP shall take the necessary action to protect the creditors of such foreign bank and the public (Sec. 78)
Chapter II. The New Central Bank Act (RA 7653)

I. CHANGES BROUGHT BY THE NEW CENTRAL BANK ACT II. GENERAL PROVISION III. ORGANIZATION OF THE BSP A. MONETARY BOARD B. GOVERNOR/DEPUTY GOVERNOR IV. OPERATION OF THE BSP A. SUPERVISION AND EXAMINATION B. HANDLING OF BANKS IN DISTRESS C. MONETARY ADMINISTRATION D. AS BANKER AND FINANCIAL ADVISER OF THE GOVERNMENT E. OTHER OPERATIONS F. PROHIBITED OPERATIONS
BSP Nature: A. A central monetary authority B. An independent and accountable body C. A government-owned corporation but enjoys fiscal and administrative autonomy. (Sec. 1 and Sec. 2) BSP Objectives: A. To maintain price stability conducive to a balanced and sustainable growth of the economy (primary objective) B. To promote and maintain monetary stability and the convertibility of the peso (Sec. 3) BSP Responsibilities: A. To provide policy directions in the areas of money, banking, and credit B. To supervise operations of banks (Sec. 3) All powers, duties and functions vested by law int eh Central Bank of the Philippines not inconsistent with the NCBA shall be deemed transferred to the BSP. All references to the Central Bank of the Philippines in any law or special charters shall be deemed to refer to the BSP. (Sec. 136)
I. Changes Brought by the New Central Bank Act Salient features 1. Assurance of BSP independence by providing for the majority of the members of the Monetary Board to come from the private sector (Sec. 6) 2. The BSP may now concentrate on monetary policy, and will shed itself of fiscal responsibilities which in the past, had distacted it from its primary function (Sec. 3, 129, 130) 3. Provides safeguards to ensure that unlike the old Central Bank which sustained huge losses, the BSP would have a positive net income position by the following provisions: a. Capitalization of P50B of which P10B will be paid upon effectivity of the Act (Sec.2) b.Maintenance of positive net foreign asset position (Sec.71) c.charging interests on all loans and advances to banks (Sec. 85) d. authority to collect interests on loans and advances to closed financial institutions; and e. BSP cant acquire any shares in banking enterprise, in development banking and financing (Sec. 128) 4.MB will also II. General Provision
III. Organization of the BSP A. Monetary Board

Composition: 7 members with 6-year terms (Sec. 6) Members: 1. The BSP Governor or his designated alternate (a deputy governor) 2. A Cabinet member to be designated by the President or his designated alternate (an Undersecretary in his department) 3. 5 members from the private sector (Sec. 6) No member of the MB may be reappointed more than once. (Sec. 6) Qualifications: 1. Natural-born citizens of the Philippines 2. At least 35 years old (the Governor must be at least 40 years old) 3. Of good moral character
4. Of unquestionable integrity 5. Of known probity and patriotism 6. With recognized competence in social and economic disciplines (Sec. 8) Disqualifications: 1. Direct connection with any multilateral banking or financial institution 2. Substantial interest in any private bank in the Philippines, within 1 year prior to his appointment (Sec. 9) Prohibitions on the members: 1. To be a director, officer, employee, consultant, lawyer, agent or stockholder of any bank, quasi-bank, or any other institution which is subject to supervision or examination by the BSP 2. To hold any other public office or public employment during their tenure 3. To be employed in any multilateral banking or financial institution within 2 years after the expiration of his term EXCEPTION: when he serves as an official representative of the government to such institution (Sec. 9) Removal of any member of the MB: 1. If the member is subsequently disqualified under Sec. 8 2. If he is physically or mentally incapacitated that he cannot properly discharge his duties and responsibilities and such incapacity has lasted for more than 6 months 3. If he is guilty of acts or operations which are of fraudulent or illegal character or which are manifestly opposed to the aims and interests of the BSP 4. If he no longer possesses the qualifications under Sec. 8 (Sec. 10) Vacancies: Cause: death, resignation, or removal of any member Effect: a new member will be appointed to complete the unexpired period of the term of the member concerned (Sec. 7) Salaries: Fixed by the Phil. President at a sum commensurate to the importance and responsibility attached (Sec. 13) Meetings: 1. held at least once a week 2. called by the Governor or by 2 MB members
3. the complete records of the proeedings and deliberations of the MB including the tapes and transcripts of stenographic notes are to be maintained and preserved (Sec. 11) 4. deputy governors may attend (Sec. 12) 5. any member with personal or pecuniary interest in any matter in the agenda shall disclose his interest and shall retire from the meeting when the matter is taken up (Sec. 14) Quorum: Presence of 4 constitute a quorum (Sec. 11) members
Decisions: Concurrence of at least 4 members, except as otherwise provided in the NCBA (Sec. 11)
B. Governor/Deputy Governor
Governor: The Governor shall be the chief executive officer of the BSP Deputy Governor(s): 1. to be appointed by the Governor, with the approval of the MB 2. not more than 3 (Sec. 21)
IV.
Operation of the BSP and
A. Supervision Examination
Coverage: Banking institutions and quasibanks, including their subsidiaries and affiliates engaged in allied activities. (Sec. 25) The supervising and examining department head, personally or by deputy, shall examine the books of every banking institution once in every 12 months, and at such other times as the MB by an affirmative vote of 5 members, may deem expedient (there must be an interval of at least 12 months between annual examinations) (Sec. 28) The bank concerned shall afford the head of the appropriate supervising and examining departments and his authorized deputies full opportunity to examine its books, cash and available assets and general condition at any time
during banking hours when requested to do so by the BSP. (Sec. 28) Non-disclosure of papers: RULE: None of the reports and other papers relative to such examinations shall be open to inspection by the public EXCEPTION: if the publicity is incidental to the proceedings authorized or is necessary for the prosecution of violations in connection with the business of such institutions. (Sec. 28) No Restraining Order or Injunction on the BSP: RULE: No restraining order or injunction shall be issued by the court enjoining the BSP from examining any institution subject to supervision or examination by the BSP EXCEPTION: existence of a convincing proof that the action of the BSP is plainly arbitrary and made in bad faith and the petitioner or plaintiff files with the clerk or judge of the court in which the action is pending a bond executed in favor of the BSP (Sec. 25)
b. When, on the basis of the report of the conservator or of its own findings, the MB determines that the continuance in business of the institution would involve probable loss to its depositors or creditors (the bank or quasi-bank would then be placed under receivership) (Sec. 29) Qualifications of a Conservator: The conservator should be competent and knowledgeable in bank operations and management. (Sec. 29) The appointment of a conservator shall be vested exclusively with the MB. (Sec. 30) Powers and Duties of a Conservator: a. To take charge of the assets, liabilities, and the management thereof b. To reorganize the management c. To collect all monies and debts due said institution, and d. To exercise all powers necessary to restore its viability e. To report and be responsible to the MB f. To overrule or revoke the actions of the previous management and board of directors of the bank or quasi-bank. (Sec. 29)
First Philippine International Bank vs CA (1996) While the Central Bank law gives vast and far reaching powers to the conservator of a bank, such powers must be related to the preservation of the assets of the bank, the reorganization of the management and the restoration of viability. Such powers cannot extend to the post-facto repudiation of perfected transactions, otherwise they would infringe against the non-impairment clause of the Constitution.
B. Handling Distress
of
Banks
in
1. Conservatorship
Applicability: when a bank or a quasi-bank is in a state of continuing inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of depositors and creditors (Sec. 29) determination is to be made by the Monetary on the basis of a report submitted by the appropriate supervising or examining department (Sec. 29) Period and Termination: Period: shall not exceed 1 year (Sec. 29) The expenses attendant to the conservatorship shall be borne by the bank or quasi-bank concerned (Sec. 29) Grounds for termination of conservatorship by MB: a. When it is satisfied that the institution can continue to operate on its own and the conservatorship is no longer necessary
Remunerations: The conservator shall receive remuneration in an amount not to exceed 2/3 of the salary of the president of the institution in 1 year, payable in 12 equal monthly payments EXC: a conservator connected with the BSP, in which case said conservator shall not be entitled to receive any remuneration or emolument. (Sec. 29)
2. Receivership
Grounds:
Whenever the MB finds that a bank or quasi-bank: a. Is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That this shall not include inability to pay caused by extraordinary demands induced by financial panic in the banking community; b. Has insufficient realizable assets, as determined by the BSP, to meet its liabilities; or c. Cannot continue in business without involving probable losses to its depositors or creditors; or d. Has willfully violated a cease and desist order under Sec. 37 that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution Receiver: a. if a banking institution: the PDIC b. if a quasi-bank: any person of recognized competence in banking or finance (Sec. 30) The appointment of a receiver shall be vested exclusively with the MB. And the designation of a conservator is not a precondition to the designation of a receiver. (Sec. 30) Powers and Duties of a Receiver: a. Immediately gather and take charge of all the assets and liabilities of the institution b. Administer the assets for the benefit of the creditors c. Exercise the general powers of a receiver under the Revised Rules of Court d. Not to pay or commit any act that will involve the transfer or disposition of any asset of the institution, except: 1. administrative expenditures 2. receiver may deposit or place funds in non-speculative investments e. Subject to prior approval of the MB, determine, as soon as possible, but not later than 90 days from take over, whether the institution may be rehabilitated or otherwise placed in such a condition so that it may be permitted to resume business with safety to its depositors and creditors and the general public The assets receivership of the institution under and liquidation shall be
deemed in custodia legis and shall be exempt from any order of garnishment, levy, attachment, or execution. (Sec. 30)
3. Liquidation
Should the determination be that the institution cannot be rehabilitated or permitted to resume business, the MB shall notify in writing the board of directors of the institution of its findings and direct the receiver to proceed with the liquidation of the institution. (Sec. 30) Procedure: 1. The receiver shall file ex parte with the proper RTC, and without requirement of prior notice or any other action, a petition for assistance in the liquidation of the institution pursuant to the liquidation plan adopted by the PDIC (if quasi-bank, liquidation plan adopted by the MB) 2. Upon acquiring jurisdiction, the court shall, upon motion by the receiver after due notice, a. adjudicate disputed claims against the institution, b. assist the enforcement of individual liabilities of the stockholders, directors, and officers, and c. decide on other issues as may be material to implement the liquidation plan 3. The receiver shall convert the assets of the institutions to money, dispose of the same to creditors and other parties, for the purpose of paying the debts of such institution in accordance with the rules on concurrence and preference of credit under the Civil Code The assets of the institution under receivership and liquidation shall be deemed in custodia legis and shall be exempt from any order of garnishment, levy, attachment, or execution. (Sec. 30) Dispositions: In case of a liquidation of a bank or quasibank, after payment of the cost of proceedings, including reasonable expenses and fees of the receiver to be allowed by the court, the receiver shall pay the debts of such institution, under order of the court, in accordance with the rules on concurrence and preference of credit in the Civil Code. (Sec. 31)
All revenues and earnings realized by the receiver in winding up the affairs and administering the assets of any bank or quasi-bank shall be used to pay the costs of proceedings, salaries of such personnel whose employment is rendered necessary in the discharge of the liquidation together with other additional expenses caused thereby. The balance of revenues and earnings, after the payment of all said expenses, shall form part of the assets available to creditors. (Sec. 32) No restraining order: The actions of the MB shall be final and executory and may not be restrained or set aside by the court (for both receivership and liquidation) EXCEPTION: petition for certiorari on the following grounds: a. the action was taken in excess of jurisdiction b. the action was taken with grave abuse of discretion as to amount to lack or excess of jurisdiction CONDITIONS: a. may only be filed by the stockholders of record representing the majority of the capital stock b. may only be filed within 10 days from receipt by the board of directors of the institution of the order directing receivership, liquidation or conservatorship. (Sec. 30)
Said notes and coins shall be a first and paramount lien on all assets of the BSP. The BSP's holdings of its own notes and coins shall not be considered as part of its currency issue and, accordingly, shall not form part of the assets or liabilities of the BSP. (Sec. 51) Legal Tender Power (Asked in 2000 Bar Exams) All notes and coins issued by the BSP shall be fully guaranteed by the Government of the Republic of the Philippines and shall be legal tender in the Philippines for all debts, both public and private: Provided, however, That, unless otherwise fixed by the MB, coins shall be legal tender in amounts not exceeding P50 for denominations of 25 centavos and above, and in amounts not exceeding P20 for denominations of 10 centavos or less. (Sec. 52) Monetary Administration Domestic Monetary Stabilization: The MB shall endeavor to control any expansion or contraction in monetary aggregates which is prejudicial to the attainment or maintenance of price stability. (Sec. 61) Monetary Administration International Monetary Stabilization: The BSP shall exercise its powers to preserve the international value of the peso and to maintain its convertibility into other freely convertible currencies, primarily for, although not necessarily limited to, current payments for foreign trade and invisibles. (Sec. 64) In order to maintain the international stability and convertibility of the Philippine peso, the BSP shall maintain international reserves adequate to meet any foreseeable net demands on the BSP for foreign currencies. Purchases in Gold: The BSP may buy and sell gold in any form, subject to such regulations as the MB may issue. The purchases and sales of gold authorized by this section shall be made in the national currency at the prevailing international market price as determined by the MB. (Sec. 69) Purchases Exchange: in Gold and Foreign
C. Monetary Administration
Peso The unit of monetary value in the Philippines is the "peso," which is represented by the sign "P." The peso is divided into 100 equal parts called "centavos," which are represented by the sign "c." (Sec. 48) Means of Payment Currency: Currency: all Philippine notes and coins issued or circulating in accordance with the provisions of this Act. (Sec. 49) Issuance: The BSP shall have the sole power and authority to issue currency, within the territory of the Philippines. (Sec. 50) Liability for Notes and Coins: Notes and coins issued by the BSP shall be liabilities of the BSP and may be issued only against, and in amounts not exceeding, the assets of the BSP.
The BSP may buy and sell foreign notes and coins, and documents and instruments of types customarily employed for the international transfer of funds. The BSP may engage in future exchange operations. The BSP may engage in foreign exchange transactions with the following entities or persons only: 1. Banking institutions operating in the Philippines; 2. The Government, its political subdivisions and instrumentalities; 3. Foreign or international financial institutions; 4. Foreign governments and their instrumentalities; and 5. Other entities or persons which the MB is hereby empowered to authorize as foreign exchange dealers, subject to such rules and regulations as the MB shall prescribe. (Sec. 70) Operations with Foreign Entities: The MB may authorize the BSP to grant loans to and receive loans from foreign banks and other foreign or international entities, both public and private, and may engage in such other operations with these entities as are in the national interest and are appropriate to its character as a central bank. The BSP may also act as agent or correspondent for such entities. Upon authority of the MB, the BSP may pledge any gold or other assets which it possesses as security against loans which it receives from foreign or international entities. (Sec. 75) Loans to Banking And Other Financial Institutions: Credit Policy: The rediscounts, discounts, loans and advances which the BSP is authorized to extend to banking institutions shall be used to influence the volume of credit consistent with the objective of price stability. (Sec. 81) Normal Credit Operations: The BSP may normally and regularly carry on the following credit operations with banking institutions operating in the Philippines: 1. Commercial credits. The BSP may rediscount, discount, buy and sell bills, acceptances, promissory notes and other credit instruments with maturities of not more than 180 days from the date of their rediscount, discount or acquisition by the BSP and resulting from transactions related to:
a. the importation, exportation, purchase or sale of readily saleable goods and products, or their transportation within the Philippines; b. the storing of non-perishable goods and products which are duly insured and deposited, under conditions assuring their preservation, in authorized bonded warehouses or in other places approved by the MB. 2. Production credits. The BSP may rediscount, discount, buy and sell bills, acceptances, promissory notes and other credit instruments having maturities of not more than 360 days from the date of their rediscount, discount or acquisition by the BSP and resulting from transactions related to the production or processing of agricultural, animal, mineral, or industrial products. Documents or instruments acquired in accordance with this subsection shall be secured by a pledge of the respective crops or products: Provided, however, That the crops or products need not be pledged to secure the documents if the original loan granted by the BSP is secured by a lien or mortgage on real estate property 70% of the appraised value of which equals or exceeds the amount of the loan granted. 3. Other credits. Special credit instruments not otherwise rediscountable under 1 and 2 may be eligible for rediscounting in accordance with rules and regulations which the BSP shall prescribe. Whenever necessary, the BSP shall provide funds from non-inflationary sources: Provided, however, That the MB shall prescribe additional safeguards for disbursing these funds. 4. Advances. The BSP may grant advances against the following kinds of collaterals for fixed periods which, with the exception of advances against collateral named in clause (4) of the present subsection, shall not exceed 180 days: i. gold coins or bullion; ii. securities representing obligations of the BSP or of other domestic institutions of recognized solvency; iii. the credit instruments to which reference is made in 1; iv. the credit instruments to which reference is made 2, for periods which shall not exceed 360 days;
utilized portions of advances in current amount covered by regular overdraft agreements related to operations included under 1 and 2, and certified as to amount and liquidity by the institution soliciting the advance; vi. negotiable treasury bills, certificates of indebtedness, notes and other negotiable obligations of the Government maturing within 3 years from the date of the advance; and vii. negotiable bonds issued by the Government of the Philippines, by Philippine provincial, city or municipal governments, or by any Philippine Government instrumentality, and having maturities of not more than 10 years from the date of advance. Advances made against the collateral named in clauses (f) and (g) may not exceed 80% of the current market value of the collateral. Special Credit Operation: The BSP may extend loans and advances to banking institutions for a period of not more than 7 days without any collateral for the purpose of providing liquidity to the banking system in times of need. (Sec. 83) Emergency Credit Operation: The MB may, by a vote of at least 5 of its members, authorize the BSP to grant extraordinary loans or advances to banking institutions secured by assets as defined hereunder a. Periods of national and/or local emergency b. Periods of imminent financial panic which directly threaten monetary and banking stability, c. Normal periods for the purpose of assisting a bank in a precarious financial condition or under serious financial pressures brought by unforeseen events, or events which, though foreseeable, could not be prevented by the bank concerned (Sec. 84) Condition for a and b: while such loans or advances are outstanding, the debtor institution shall not, except upon prior authorization by the MB, expand the total
v.
volume of its loans or investments. (Sec. 84) Conditions for c: the MB has ascertained that the bank is not insolvent and has the assets defined hereunder to secure the advances (Sec. 84) Credit Terms RULE: The BSP shall collect interest and other appropriate charges on all loans and advances it extends, the closure, receivership or liquidations of the debtorinstitution notwithstanding. (Sec. 85) Open Market Operations for the BSPs Account: The open market purchases and sales of securities by the BSP shall be made exclusively in accordance with its primary objective of achieving price stability. (Sec. 90) How: 1. Purchase and sales in the open market government securities (Sec. 91) 2. Issuance and negotiation of freely negotiable evidences of indebtedness of the BSP Only in cases of extraordinary movement in price levels (Sec. 92) and may be acquired by the BSP before their maturity (Sec. 92) BSP Portfolio: At least once every month the MB shall review the portfolio of the BSP in relation to its future credit policy. In reviewing the BSP's portfolio, the MB shall especially consider whether a sufficiently large part of the portfolio consists of assets with early maturities, in order that a contraction in BSP credit may be effected promptly whenever the national monetary policy so requires. (Sec. 93) Bank Reserves All banks operating in the Philippines shall be required to maintain reserves against their deposit liabilities (uniform application) The MB may, at its discretion, also require all banks and/or quasibanks to maintain reserves against funds held in trust and liabilities for deposit substitutes EXC: deposits and deposit substitutes with remaining maturities of 2 years or more, as well as interbank borrowings (Sec. 94)
Deposits maintained by banks with the BSP as part of their reserve requirements shall be exempt from attachment, garnishments, or any other order or process of any court, government agency or any other administrative body issued to satisfy the claim of a party other than the Government, or its political subdivisions or instrumentalities. (Sec. 103) Required Reserves: 1. Against Peso Deposits. The MB may fix and, when it deems necessary, alter the minimum reserve ratios to peso deposits, as well as to deposit substitutes, which each bank and/or quasi-bank may maintain, and such ratio shall be applied uniformly to all banks of the same category as well as to quasi-banks. (Sec. 96) 2. Against Foreign Currency Deposits. The MB is similarly authorized to prescribe and modify the minimum reserve ratios applicable to deposits denominated in foreign currencies. (Sec. 97) 3. Against Unused Balances of Overdraft Lines. In order to facilitate BSP control over the volume of bank credit, the MB may establish minimum reserve requirements for unused balances of overdraft lines. The powers of the MB to prescribe and modify reserve requirements against unused balances of overdraft lines shall be the same as its powers with respect to reserve requirements against demand deposits. (Sec. 98) Selective Regulation Of Bank Operations: Guiding Principle: The MB shall use the powers granted to it to ensure that the supply, availability and cost of money are in accord with the needs of the Philippine economy and that bank credit is not granted for speculative purposes prejudicial to the national interests. (Sec. 104) Regulations: 1. Margin Requirements Against Letters of Credit the MB may at any time prescribe minimum cash margins for the opening of letters of credit, and may relate the size of the
required margin to the nature of the transaction to be financed. (Sec. 105) 2. Required Security Against Bank Loans in order to promote liquidity and solvency of the banking system, the MB may issue such regulations as it may deem necessary with respect to the maximum permissible maturities of the loans and investments which the banks may make, and the kind and amount of security to be required against the various types of credit operations of the banks. (Sec. 106) 3. Portfolio Ceilings whenever the MB considers it advisable to prevent or check an expansion of bank credit, it may place an upper limit on the amount of loans and investments which the banks may hold, or may place a limit on the rate of increase of such assets within specified periods of time. The MB may apply such limits to the loans and investments of each bank or to specific categories thereof. In no case shall the MB establish limits which are below the value of the loans or investments of the banks on the date on which they are notified of such restrictions. The restrictions shall be applied to all banks uniformly and without discrimination. (Sec. 107) 4. Minimum Capital Ratios the MB may prescribe minimum ratios which the capital and surplus of the banks must bear to the volume of their assets, or to specific categories thereof, and may alter said ratios whenever it deems necessary. (Sec. 108) Coordination of Credit Policies By Government Institutions: GOCCs which perform banking or credit functions shall coordinate their general credit policies with those of the MB. The MB may, whenever it deems it expedient, make suggestions or recommendations to such corporations for the more effective coordination of their policies with those of the BSP. (Sec. 109)
D. As Banker and Financial Adviser of the Government

BSP as Banker of the Government: The BSP shall act as a banker of the government, its political subdivisions and instrumentalities. (Sec. 110)
Remuneration: The BSP may charge equitable rates, commissions or fees for services which it renders to the government, its political subdivisions and instrumentalities. (Sec. 116) BSP as Financial Advisor of the Government: 1. Render opinion, as shall be requested by the Government, in the following a. credit operation of the government abroad based on the gold and foreign exchange resources and obligations of the antion and on the effects of the proposed operation on the balance of payments and on monetary aggregates b. borrowing within the Philipines on the probable effects of the proposed operation on monetary aggregates, the price level, and the balance of payments (Sec. 123) 2. The Deputy Governor designated by the Governor shall be an ex-officio member of the NEDA in order to assure effective communication betweent eh economic, financial and fiscal policies of the government and the monetary, credit and exchange policies of the BSP (Sec. 124) BSP Support of the Government Securities Market: Securities Stabilization Fund 1. shall be administered by the BSP for the account of the Government 2. the operations of the SSF shall consist of purchases and sales, in the open market, of bonds and other evidences of indebtedness issued or fully guaranteed by the Government. The purpose of these operations shall be to increase the liquidity and stabilize the value of said securities in order thereby to promote investment in government obligations. The MB shall use the resources of the SSF to prevent, or moderate, sharp fluctuations in the quotations of said government obligations, but shall not endeavor to alter movements of the market resulting from basic changes in the pattern or level of interest rates. (Sec. 120) 3. The SSF shall retain net profits which it may make on its operations, regardless of whether said profits arise from capital gains or from interest
earnings. The SSF shall correspondingly bear any net losses which it may incur. (Sec. 122)
E. Other Operations 1. Conduct Statistics of Research and
Purpose: For the guidance of the MB in the formulation and implementation of its policies (Sec. 22) Data: Forecasts of the balance of payment of the Philippines, statistics on the monthly movement of the monetary aggregates and of prices and other statistical series and economic studies useful for the formulation and analysis of monetary, banking, credit and exchange policies. (Se. 22) Authority of BSP to obtain data and information: a. through a request b. from government offices and instrumentalities, or governmentowned or controlled corporations c. any data which it may require for the proper discharge of its functions and responsibilities d. can be enforced through the issuance of a subpoena for the production of the books and records (refusal of the subpoena without justifiable cause = contempt) (Sec. 23)
2. Training Personnel
of
Technical
The BSP shall promote and sponsor the training of technical personnel in the field of money and banking and shall defray the costs of study, at home or abroad, of: a. qualified BSP employees b. promising university graduates c. any other qualified persons determined by proper competitive examinations (Sec. 24)
3. Reportorial Requirements
a. general balance sheet showing the volume and composition of the
BSPs assets and liabilities as of the last working day of the month within 60 days after the end of each month except for December which shall be submitted within 90 days after the end hereof b. analysis of economic and financial developments, including the condition of net international reserves and monetary aggregates not later than 90 days after the end of each quarter c. the preceding years budget and profit and loss statement of the BSP showing in reasonable detail the result of its operations d. a review of the state of the financial system 120 days after the end of each semester e. abnormal movements in monetary aggregates and the general price level as soon as practicalbe and not later than 72 hours after they are taken, remedial measures in response to such abnormal movements (Sec. 39) f. annual report on the condition of the BSP including a review of the policies and measures adopted by the MB during the past year and an analysis of the economic and financial circumstances which gave rise to said policies and measures (Sec. 40) Effect of failure to comply with the annual report: Failure to comply with the reportorial requirement without justifiable reason as may be determined by the MB shall cause the withholding of the salary of the personnel concerned until the requirements are complied with. (Sec. 40) Signatures on Statements: The balance sheets and other financial statements of the BSP shall be signed by a. the officers responsible for their preparation b. the Governor c. the auditor of the BSP. (Sec. 41)
a. non-stock savings and loan associations and provident funds organized exclusively for employees of the BSP, and b. as otherwise provided in the NCBA 2. directly or indirectly requesting or receiving any gift, present or pecuniary or material benefit for himself or another, from any institution subject to supervision or examination by the BSP; 3. revealing in any manner, except under orders of the court, the Congress or any government office or agency authorized by law, or under such conditions as may be prescribed by the MB, information relating to the condition or business of any institution. This prohibition shall not be held to apply to the giving of information to the MB or the Governor of the BSP, or to any person authorized by either of them, in writing, to receive such information; and 4. borrowing from any institution subject to supervision or examination by the BSP shall be prohibited unless said borrowings are adequately secured, fully disclosed to the MB, and shall be subject to such further rules and regulations as the MB may prescribe: Provided, however, That personnel of the supervising and examining departments are prohibited from borrowing from a bank under their supervision or examination. (Sec. 27) Prohibitions on the BSP: 1. acquisition of shares of any kind or accept them as collateral 2. participation in the ownership or management of any enterprise, either directly or indirectly 3. being engaged in development banking EXCEPTION: outstanding loans obtained or extended for development financing (Sec. 128)
F. Prohibited Operations
Prohibitions on BSP Personnel: In addition to the prohibitions found in RA 3019 and 6713, personnel of the BSP are hereby prohibited from: 1. being an officer, director, lawyer or agent, employee, consultant or stockholder, directly or indirectly, of any institution subject to supervision or examination by the BSP, except:
Chapter III. Law on Secrecy of Bank Deposits (RA 1405)

I. II. III. IV. V. PURPOSES COVERAGE PROHIBITED ACTS EXCEPTIONS PENALTY
Banco Filipino vs Purisima (1988) The exception applies to cases of concealment of illegally acquired property in anti-graft cases. The inquiry into illegally acquired property or property NOT "legitimately acquired" extends to cases where such property is concealed by being held by or recorded in the name of other persons. Mellon Bank, N.A. vs. Magsino, (1990) The exception extends to cases of concealment of illegally acquired property not involving antigraft cases.
I. Purposes
A. To give encouragement to the people to deposit their money in banking institutions and to discourage private hoarding B. So that the peoples money may be properly utilized by banks in authorized loans to assist in the economic development of the country. (Sec. 1)
II. Coverage
All deposits of whatever nature with banks or banking institutions in the Philippines are hereby considered as of an absolutely confidential nature and may not be examined. (Sec. 2) Includes investments in bonds issued by the Philippine Government, its political subdivisions and its instrumentalities. (Sec. 2)
III. Prohibited Acts

1. No person, government official, bureau or office may examine, inquire into or look into such deposits; and 2. No official or employee of any banking institution may disclosure to any unauthorized person any information concerning said deposits (Sec. 3).
IV. Exceptions
A. Upon written permission of the depositor B. In cases of impeachment C. Upon order of a competent court in cases of: a. bribery b. dereliction of duty of public officials, or c.where the money deposited or invested is the subject matter of the litigation. (Sec. 2)
Other exceptions: 1. upon order of a competent court in cases of unexplained wealth under RA 3019 or the Anti-Graft and Corrupt Practices Act (PNB v. Gancayco, 1965; Banco Filipino v. Purisima, 1988; Marquez v. Desierto, 2001) 2. when inquiry is conducted under the authority of the Commissioner of Internal Revenue into the bank accounts of the following: a. a decedent in order to determine his gross estate b. any taxpayer who has filed an application for compromise of his tax liability, which application shall include a written waiver of his privilege under RA 1405 or under other general or special laws. (Sec. 6(F) NIRC) 3. in cases under the Anti-Money Laundering Lact of 2001 (RA 9160), no court order required if a. funds or property involved consists of investments b. said investments are related to i. kidnapping for ransom ii. unlawful activities under Comprehensive Drugs Act of 2002 iii. hijacking and other violations under RA 6235 iv. destructive arson and murder, including those perpetrated by terrorists against noncombatants and similar targets. 4. Under Sec. 26 of RA 7653 or the New Central Bank Act of 1993, when the examination is conducted pursuant
to the required waiver of the secrecy of deposits (of whatever nature in all banks in the Philippines) made by any DOSRI 5. Disclosure of certain information about bank deposits which have been dormant for at least 10 years, to the Treasurer of the Philippine in a sworn statement, a copy of which is posted in the bank premises. (Sec. 2, Unclaimed Balances Law (Act No. 3926, as amended)) [NOT considered as EXCEPTIONS]: a. In 1981, PD 1792 added the following grounds when the bank can be compelled to reveal the amount of a depositor: i. made in the course of a special or general examination of a bank and is specifically authorized by the Monetary Board after being satisfied that there is reasonable ground to believe that a bank fraud or serious irregularity has been or is being committed and that it is necessary to look into the deposit to establish such fraud or irregularity, or ii. made by an independent auditor hired by the bank to conduct its regular audit provided that the examination is for audit purposes only and the results thereof shall be for the exclusive use of the bank. However, Sec. 135 of RA 7653 or the New Central Bank Act reverted RA 1405 to its version prior to the promulgation of the decree.
of the BSP examiners and independent auditors from the coverage of the Secrecy of Bank Deposits Law finds basis in Opinion No. 243 (s. 1975) of then Secretary of Justice Pedro Tuason. (Morales, The Philippine General Banking Law, opinion)
b. It used to be believed that the RA

1405 did not apply to the Ombudsman, on account of his authority under Sec. 15(8) of RA 6770 or the Ombudsman Act of 1989 to examine and have access to bank accounts and records. However, the SC (Marquez v. Desierto, 2001) restricted the Ombudsmans power as follows: before an in camera inspection may be allowed, there must be a pending case before a court of competent jurisdiction. Further, the account must be clearly identified, the inspection limited to the subject matter of the pending case before the court of competent jurisdiction. The bank personnel and the account holder must be notified to be present during the inspection, and such inspection may cover only the account identified in the pending case. (Morales, The Philippine General Banking Law)
c. Further, it is interesting to note

that the Secretary of Justice in his Opinion No. 13 (s. 1987) concluded that the Presidential Commission on Good Government can compel banks to disclose or produce bank records without violating the bank secrecy laws. (Morales, The Philippine General Banking Law)
d. Moreover, under Sec. 1(d) of RA

6382 (1990), which created the Davide Commission that conducted a fact finding investigation of the failed coup d etat of December 1989, the commission had the power to ask the Monetary board to disclose information on and/or grant authority to examine bank deposits, trust finds, or banking transactions in the name of and/or utilized by a person, natural or juridical, under investigation by the Commission, in any bank or banking institution in the Philippines, when the Commission has reasonable ground to believe that said deposits, trust or investment funds, or banking
a) Thus Villanueva says that these

two instances as excluded from the enumeration of exceptions to the secrecy of bank deposits (Villanueva, Commercial Law Review, opinion).
b) Morales however notes that

with the Amendment of the Anti-Money Laundering Act of 2001, exception (1) has been substantially resurrected. While there is no similar development of exception (2), the exclusion
transactions have been used in support of furtherance of the objectives of the coup d etat. (Morales, The Philippine General Banking Law)
V. Penalty
Imprisonment of not more than 5 years or a fine of not more than P20,000 or both, in the discretion of the court (Sec. 5)
Chapter IV. Truth in Lending Act (RA 3765)

I. II. III. IV. POLICY DISCLOSURE STATEMENT COVERAGE SANCTIONS
g. any purchase, or other acquisition of, or any credit upon the security of, any obligation of claim arising out of any of the foregoing; and h. any transaction or series of transactions having a similar purpose or effect (Sec. 3 (2))
I. Policy
Protection of the citizens from a lack of awareness of the true cost of credit to the user by assuring a full disclosure of such cost with a view of preventing the uninformed used of credit to the detriment of the national economy (Sec. 2)
Outside the coverage:
a. those that do not involve the payment of any finance charge by the debtor b. those in which the debtor is the one specifying a definite and fixed set of credit terms such as bank deposits, insurance contracts, sales of bonds, etc. (Sec. 3 of CB Circular No. 158)
II. Disclosure Statement

Any creditor shall furnish to each person to whom credit is extended, prior to the consummation of the transaction, a clear statement in writing setting forth, to the extent applicable and in accordance with rules and regulations prescribed by the Monetary Board of the BSP, the following information: 1. the cash price or delivered price of the property or service to be acquired; 2. the amounts, if any, to be credited as down payment and/or trade-in; 3. the difference between the amounts set forth under 1 and 2; 4. the charges, individually itemized, which are paid or to be paid by such person in connection with the transaction but which are not incident to the extension of the credit; 5. the total amount to be financed; 6. the finance charge expressed in terms of pesos and centavos; and 7. the percentage that the fiance bears to the total amount to be financed expressed as a simple annual rate on the outstanding unpaid balance of the obligation. (Sec. 4)
IV. Sanctions
a. Any creditor who in connection with any credit transaction fails to disclose to any person any information in violation of this Act or any regulation issued thereunder shall be liable to such person in the amount of P100 or in an amount equal to twice the finance charged required by such creditor in connection with such transaction, whichever is greater, except that such liability shall not exceed P2,000 on any credit transaction. Action to recover such penalty may be brought by such person within one year from the date of the occurrence of the violation, in any court of competent jurisdiction. (Sec. 6 (a)) b. Any person who willfully violates any provisions of this Act or any regulation issued thereunder shall be fined not less than P1,000 or more than P5,000 or imprisonment for not less than 6 months, nor more than 1 year or both (Sec. 6 (c)) RULE: The validity or enforceability of any contract or transaction is not affected. EXCEPTION: failure to disclose the required information (Sec. 6)
III. Coverage
a. any loan, mortgage, deeds of trust, advance or discount; b. any conditional sales contract; c. any contract to sell, or sale or contract of sale of property or services, either for present or future delivery, under which part or all of the price is payable subsequent to the making of such sale or contract; d. any rental-purchase contract e. any contract or arrangement for the hire, bailment, or leasing of property f. any option, demand, lien, pledge, or other claim against or for the delivery of, property or money;
Exemption:
No punishment or penalty provided by this Act shall apply to the Philippine Government or any agency or any political subdivision thereof. (Sec. 6 (d))
Final judgment evidence:
as
prima
facie
A final judgment hereafter rendered in any criminal proceeding under this Act to the effect that a defendant has willfully violated this Act shall become prima facie evidence against such defendant in an action or proceeding brought by any other party against such defendant under this Act as to all matters respecting which said judgment
would be an estoppel as between the parties thereto. (Sec. 6 (e))
Chapter V. Anti-Money Laundering Act (RA 9160 as amended by RA 9194)

I. II. III.
IV. V. VI.
I.
A. AMLA shall not be used for political prosecution or harassment or as an instrument to POLICIES hamper COVERAGE OBLIGATIONS OF competition COVERED INSTITUTIONS in trade and A. CUSTOMER IDENTIFICATION commerce B. RECORD KEEPING B. No case C. REPORTING OF COVERED AND for money SUSPICIOUS TRANSACTIONS laundering FREEZE ORDER may be filed FORFEITURE PROVISIONS against and ANTI-MONEY LAUNDERING COUNCIL no assets shall be Policies frozen, attached or A. To protect forfeited to and preserve the prejudice the integrity of a candidate and for an confidentiality electoral of bank office during accounts an election B. To ensure period (Sec. that the 16) Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity C. Consistent with its foreign policy, to extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities whenever committed. (Sec. 2 RA 9160)
II. Coverage
Money Laundering is a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. (Sec. 4) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity. Any proceeding relating to the unlawful activity shall be given precedence over
Policy against political harassment:
the prosecution of any offense or violation under RA 9160, as amended, without prejudice to freezing and other remedies provided RA 9160. (Sec. 6) Prohibited Acts 1. Transactin g or attempting to transact with monetary instrument or property, knowing such to represent, involve, or relate to the proceeds of any unlawful activity 2. Facilitatin g the offense of money laundering referred to in 1 by knowingly performing or failing to perform any act 3. Knowingly failing to disclose and file a report with the AntiMoney Laundering Commission (AMLC) of any monetary instrument or property as required (Sec. 4) Covered Transactions: Transactions in cash or other equivalent monetary instrument involving a total
amount in excess of P500,000 within 1 banking day (Sec. 3(b)) Suspicious Transactions: Transactions with covered institutions, regardless of the amounts involved, where any of the following circumstances exist: 1. There is no underlying legal or trade obligation, purpose or economic justification; 2. The client is not properly identified; 3. The amount involved is not commensurat e with the business or financial capacity of the client; 4. Taking into account all known circumstance s, it may be perceived that the client's transaction is structured in order to avoid being the subject of reporting requirements under the Act; 5. Any circumstance s relating to the transaction which is observed to
deviate from the profile of the client and/or the client's past transactions with the covered institution; 6. The transactions is in a way related to an unlawful activity or offense under this Act that is about to be, is being or has been committed; or 7. Any transactions that is similar or analogous to any of the foregoing. (Sec. 3(b-1)) Covered Institutions: 1. Banks, non-banks, quasi-banks, trust entities, and all other institutions and their subsidiaries and affiliates supervised or regulated by the BSP; 2. Insurance companies and all other institutions supervised or regulated by the PDIC; and 3. The following entities supervised or regulated by SEC: a. securities dealers, brokers, salesmen, investmen
t houses and other similar entities managing securities or rendering services as investmen t agent, advisor, or consultant b. mutual funds, close and investmen t companie s, common trust funds, pre-need companie s and other similar entities, c. foreign exchange corporatio ns, money changers, money payment, remittanc e, and transfer companie s and other similar entities, and d. other entities administer ing or otherwise dealing in currency, commoditi es or financial derivative s based thereon, valuable objects,
cash substitute s and other similar monetary instrumen ts or property (Sec. 3(a))
similar accounts shall be absolutely prohibited EXC: peso and foreign currency non-checking numbered accounts (but the BSP may conduct annual testing solely limited to the determination of the existence and true identity of the owners of such accounts) (Sec. 9(a))
Suspicious Transactio ns
a. report to the AMLC all covered transactions and suspicious transactions within 5 working days from occurrences thereof, unless the Supervising Authority prescribes a longer period not exceeding 10 working days. b. when reporting covered or suspicious transactions, covered institutions and their officers and employees shall not be deemed to have violated the Secrecy of Bank Deposits Act (RA 1405), the Foreign Currency Deposits Act (RA 6426) and the General Banking Law of 2000 (RA 8791) and other similar laws, but they are prohibited from communicatin g, directly or indirectly, in any manner or by an means, to any
III. Obligations of Covered Institutions

(Asked 2006) in
A. Custom er Identificati on
1. establish and record the true identity of its clients based on official documents 2. maintain a system of verifying th true identity of their clients 3. in the case of corporate clients, require a system of verifying their legal existence and organizational structure, as well as the authority and identification of all persons purporting to act on their behalf (Sec. 9) Anonymous accounts, accounts under fictitious names, and all other
B. Record Keeping
1. maintain and safely store all records of all transactions of covered institutions for 5 years from the date of the transactions 2. with respect to closed accounts, to preserve and safely store the records on customer identification, account files and business corresponden ce for at least 5 years from the dates when they were closed (sec. 9(b))
person, the fact that a covered or suspicious transaction report was made, the contents thereof, or any other information in relation thereto. In case of violation thereof, the concerned officer and employee of the covered institution shall be criminally liable. However, no administrativ e, criminal or civil proceedings, shall lie against any person for having made a covered or suspicious transaction report in the regular performance of his duties in good faith, whether or not such reporting results in any criminal prosecution under this Act of any other law. c. when reporting covered or suspicious transactions to the AMLC, covered institutions and their officers and
C. Reportin g of Covered and
employees are prohibited from communicatin g directly or indirectly, in any manner or by any means, to any person or entity, the media, the fact that a covered or suspicious transaction report was made, the contents thereof, or any other information in relation thereto. Neither may such reporting be published or aired in any manner or form by the mass media, electronic mail, or other similar devices. In case of violation thereof, the concerned officer and employee of the covered institution and media shall be held criminally liable. (Sec. 9(c))
effective immediately 1. upon applic ation ex parte by the AMLC and 2. after deter minati on that probab le cause exists that any monet ary instru ment or proper ty is in any way related to an unlaw ful activit y, b. The freeze order shall be for a period of 20 days unless extended by the court. (Sec. 10) Examination of Accounts: 1. by the AMLC a. notwit hstand ing the provisi ons of the Secrec y of Bank Deposi ts Act, the Foreig
IV. Freeze Order

Procedure: a. The Court of Appeals may issue a freeze order which shall be
n Curren cy Deposi ts Act, the GBL and other laws b. upon order of any compe tent court in cases of violati on of the AMLA when it has been establi shed that there is probab le cause that the deposi ts or invest ments are related to an unlaw ful activit y or a money launde ring offens e EXC: (no court order required) 1. Kid nappin g
2. Dr ug Traffic king 3. Hij acking , destru ctive arson and murde r, includi ng those perpet rated by terrori sts agains t noncomba tant person s and similar targets 2. by the BSP ma de in te cou rse of a per iod ic or spe cial ex am ina tio n, in acc ord anc e wit h the rul es of
ex am ina tio n of the BS P(S ec. 11)
V. Forfeiture Provisions
Civil Forfeiture: When there is a covered transaction report made, and the court has, in a petition filed for the purpose ordered the seizure of any monetary instrument or property, in whole or in part, directly or indirectly, related to said report the Revised Rules of Court on civil forfeiture shall apply Claim on Forfeited Assets: a. Where the court has issued an order of forfeiture of the monetary instrument or property in a criminal prosecution for any money laundering offense, the offender or
any other person claiming an interest therein may apply, by verified petition, b. for a declaration that the same legitimately belongs to him and c. for segregation or exclusion of the monetary instrument or property corresponding thereto. The verified petition shall be filed with the court which rendered the judgment of conviction and order of forfeiture, within fifteen days from the date of the order or forfeiture, in default of which the said order shall become final and executory. This provision shall apply in both civil and criminal forfeiture. Payment in Lieu of Forfeiture: Where the court has issued an order of forfeiture of the monetary instrument or property subject of a money laundering offense, and said order
a. cannot be enforced because any particular monetary instrument or property b. cannot, with due diligence, be located, or c. has been substantially altered, destroyed, diminished in value or otherwise rendered worthless by any act or omission, directly or indirectly, attributable to the offender, or d. has been concealed, removed, converted or otherwise transferred to prevent the same from being found or to avoid forfeiture thereof, or e. is located outside the Philippines or has been placed or brought outside the jurisdiction of the court, or f. has been commingled with other monetary instruments or property belonging to either the offender himself or a third person or entity, thereby
rendering the same difficult to identify or be segregated for purposes of forfeiture, in an amount equal to the value of said monetary instrument or property This provision shall apply in both civil and criminal forfeiture. (Sec. 12)
VI. Anti-Money Laundering Council

Composition: 1. BSP Governor (chairman) 2. Insurance Commissioner 3. SEC Chairman Functions: 1. To require and receive covered or suspicious transaction reports from covered institutions; 2. To issue orders addressed to the appropriate Supervising Authority or the covered institutions or to request for assistance from a foreign State
to determine the true identity of the owner of any monetary instrument or property subject of a covered transaction or suspicious transaction report, believed by the Council, on the basis of substantial evidence, to be, in whole or in part, wherever located, representing, involving, or related to directly or indirectly, in any manner or by any means, the proceeds of an unlawful activity 3. To institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General; 4. To cause the filing of complaints with the DOJ or the Ombudsman for the prosecution of money laundering offenses; 5. To investigate suspicious transactions and covered transactions
deemed suspicious after an investigation by AMLC, money laundering activities and other violations of the AMLA; 6. To apply before the Court of Appeals, ex parte, for the freezing of any monetary instrument or property alleged to be the proceeds of any unlawful activity; 7. To implement such measures as may be necessary and justified under the AMLA to counteract money laundering; 8. To receive and take action in respect of, any request from foreign states for assistance in their own anti-money laundering operations provided in this Act; 9. To develop educational programs on the pernicious effects of money laundering, the methods
and techniques used in the money laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders; 10.To enlist the assistance of any branch, department, bureau, office, agency, or instrumentalit y of the government, including GOCCs, in undertaking any and all anti-money laundering operations, which may include the use of its personnel, facilities and resources for the more resolute prevention, detection, and investigation of money laundering offenses and prosecution of offenders; and 11.To impose administrativ e sanctions for the violation of laws, rules, regulations, and orders
and resolutions issued pursuant thereto (Sec. 7) Mutual Assistance Among States: 1. Request for Assistance from a Foreign State: The AMLC may execute the request or refuse to execute the same and inform the foreign State of any valid reason for not executing the request or for delaying the execution thereof. The principles of mutuality and reciprocity shall, for this purpose, be at all times recognized. 2. Power of the AMLC to Act on a Request for Assistance from a Foreign State: The AMLC may execute a request for assistance from a foreign State by: a. tracking down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful activity under the procedures
laid down in the AMLA; b. giving information needed by the foreign State within the procedures laid down in this Act; and c. applying for an order of forfeiture of any monetary instrument or property in the court: Provided, That the court shall not issue such an order unless the application is accompanied by an authenticated copy of the order of a court in the requesting State ordering the forfeiture of said monetary instrument or property of a person who has been convicted of a money laundering offense in the requesting State, and a certification of an affidavit of a competent officer of the requesting State stating that the conviction and the order of forfeiture are final and that no further appeal
lies in respect or either. 3. Obtainin g Assistance from Foreign States: The AMLC may make a request to any foreign State for assistance in: a. tracking down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful activity; b. obtaining information that it needs relating to any covered transaction, money laundering offense or any other matter directly or indirectly, related thereto; c. to the extent allowed by the law of the Foreign State, applying with the proper court therein for an order to enter any premises belonging to or in the possession or control of, any or all of the persons named in said request, and/or search any or all such persons named therein and/or
remove any document, material or object named in said request: Provided, That the court shall not issue such an order unless the application is accompanied by an authenticated copy of the order of a court in the requesting State ordering the forfeiture of said monetary instrument or property of a person who has been convicted of a money laundering offense in the requesting State, and a certification of an affidavit of a competent officer of the requesting State stating that the conviction and the order of forfeiture are final and that no further appeal lies in respect or either. 4. Limitatio ns on Request for Mutual Assistance AMLC may refuse to comply: a. Where the action sought by the
request contravenes any provision of the Constitution or b. The execution of a request is likely to prejudice the national interest of the Philippines EXC: there is a treaty between the Philippines and the requesting State relating to the provision of assistance in relation to money laundering offenses. 5. Require ments for Requests for Mutual Assistance from Foreign State: A request for mutual assistance from a foreign State must: a. confirm that an investigation or prosecution is being conducted in respect of a money launderer named therein or that he has been convicted of any money laundering offense; b. state the grounds on which any person is
being investigated or prosecuted for money laundering or the details of his conviction; c. gives sufficient particulars as to the identity of said person; d. give particulars sufficient to identity any covered institution believed to have any information, document, material or object which may be of assistance to the investigation or prosecution; e. ask from the covered institution concerned any information, document, material or object which may be of assistance to the investigation or prosecution; f. specify the manner in which and to whom said information, document, material or object detained
pursuant to said request, is to be produced; g. give all the particulars necessary for the issuance by the court in the requested State of the writs, orders or processes needed by the requesting State; and h. contain such other information as may assist in the execution of the request. Extradition: The Philippines shall negotiate for the inclusion of money laundering offenses as herein defined among extraditable offenses in all future treaties (Sec. 13) Amendment: One of the many amendments made by RA 9194 was the deletion of the phrase that provided that The provisions of this Act shall not apply to deposits and investments made prior to its effectivity.
II. PRIVILEGES The FCDA allowed any person to deposit, and banks to accept deposit, any foreign currency acceptable as part of the Philippines international reserve.
government agency or any administrative body whatsoever. (Sec. 8) Exceptions 1. upon written permission of the depositor (Sec. 8, Foreign Currency Deposit Act ; Intengan vs CA ; 2002) 2. upon order of a competent court in cases of violation of the AntiMoney Laundering Act of 2001 [as in the case of peso deposits, supra] 3. during Bangko Sentrals periodic or special examinations [as in the case of peso deposits, supra], and 4. disclosure ot the Treasurer of the Philippines when the unclaimed balances law applies (Act 3936, as amended by PD 679) 5. In Salvacion vs. CB (1997), where a Filipino child was raped by a foreigner, the SC allowed
I. Confidentia lity
All foreign currency deposits authorized under the Secrecy Law as well as under PD1034 are declared and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall be examine, inquired or looked into by any person, government official, bureau or office, whether judicial or administrative, or legislative of any other entity whether public or private. (Sec. 8)
Chapter VI. Foreign Currency
The foreign currency deposits shall be exempt from attachment, garnishment, or Deposit Act any other order (RA 6426) or process of any court, legislative I. CONFIDENTIALITY body,
II. Privileges 1. Tax
garnishment of foreign currency deposits stating : We rule that the questioned Section 113 of CB Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any court. Legislative body, government agency or any administrativ e body whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest.
residents are engaged in trade or business in the Philippines (Sec. 6) 2. Exemption from attachment, garnishment or any other order or process of any court, legislative or administrativ e body, or government agency whatsoever (Sec. 8) EXC: the CA, upon application ex parte by the AMLC and after determination that a probable cause exists that any monetary instrument or property is in any way related to an unlawful activity, the AMLC, may freeze the account (Sec. 10, RA9160)
exemption the FCD, including interests and all other income or earnings of such deposits, are exempt from any an all taxes whatsoever irrespective of whether or not these deposits are made by residents or non-residents and, in the latter case, irrespective of whether or not the non-
Chapter VI. Foreign Currency Deposit Act (RA 6426)

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Chapter I. General Banking Law of 2000

COMMERCIAL LAW Krizelle Poblacion Christina Ortua

LECTURES Edel Cruz

ACADEMICS COMMITTEE Samantha Poblacion

CORPORATION LAW Rency Corrige

Ben Evangelista Raissa Villanueva

Chapter I. General Banking Law of 2000 (RA 8791)

I. General Concepts A. Definition

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

Other classifications of banks

IV. Organization of Banks A. Conditions for Organization

III. Authority Banks

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

C. Fit and Proper Rule B. Ownership of Banks

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

A. Core Banking 1. Deposit Function

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

allied enterprises financial or non-financial (Sec. 30)

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

2. A publicly-listed UB or KB may own

NonFinancial Allied Non-Allied Enterprises

2. Single Borrowers Limit

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

3. DOSRI (Directors, Officers, Stockholders and their Related Interests)

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

2. Minimum Capitalization: (Sec.

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

3. Other Banking Services

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

F. Some Requirements for the Operation of Banks

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

3. through the acquisition of voting stock in a domestic bank

VI. Foreign Banks

REVIEWER IN COMMERCIAL LAW

Chapter I. General Banking Law of 2000

After the revocation of its license,

REVIEWER IN COMMERCIAL LAW

Chapter II. The New Central Bank Act (RA 7653)

Chapter II. The New Central Bank Act (RA 7653)

III. Organization of the BSP A. Monetary Board

REVIEWER IN COMMERCIAL LAW

Chapter II. The New Central Bank Act (RA 7653)