CHAPTER ONE: BANK AND THE BUSINESS OF BANKING I. Declared Policy of t e State.

Read Section 2 of Republic Act 8791 (General Banking Law of 2000 II. Defi!itio! of Ba!"#. a. Bank! are defined under t"e GBL a! entitie! engaged in t"e lending of fund! obtained in t"e for# of depo!it!$ (%ote& bank! #a' engage in ot"er acti(itie! allowed b' law $. )t"er definition!& (* onl' included two out of t"e four gi(en b' +i,on i. -one'ed in!titute founded to facilitate t"e borrowing. lending and !afe/keeping of #one' and to deal. in note!. bill! of e0c"ange. and credit!$ ii. An in(e!t#ent co#pan' w"ic" loan! out t"e #one' of it! cu!to#er!. collect! t"e intere!t and c"arge! a co##i!!ion to bot" t"e lender and borrower. i! a bank$ III. Nat%re of t e Ba!"i!& B%#i!e##. a. De$tor'Creditor Relatio!# i(. Read Article 1980 of t"e 1i(il 1ode of t"e 2"ilippine!$ 3"e contract between t"e bank and it! depo!itor i! go(erned b' t"e pro(i!ion! of t"e 1i(il 1ode on !i#ple loan$ 3"e bank i! t"e debtor and t"e depo!itor i! t"e creditor$ $. Fid%ciary D%ty. Bank! are re4uired to 5treat t"e account! of it! depo!itor! wit" #eticulou! care. alwa'! "a(ing in #ind t"e fiduciar' nature of t"eir relation!"ip$ 3"e fiduciar' nature of banking re4uire! bank! to a!!u#e a degree of diligence "ig"er t"an t"at of a good fat"er of a fa#il'$ 3"u!. t"e bank6! fiduciar' dut' i#po!e! upon it a "ig"er le(el of accountabilit'$ c. Not a Tr%#t A&ree)e!t. 3"e fiduciar' nature of banking doe! not con(ert t"e contract between t"e bank and it! depo!itor! fro# a !i#ple loan to a tru!t agree#ent. w"et"er e0pre!!ed or i#plied$ 3"e law !i#pl' i#po!e! on t"e bank a "ig"er !tandard of integrit' and perfor#ance in co#pl'ing wit" it! obligation! under t"e contract of !i#ple loan. be'ond t"o!e re4uired of non/bank debtor! under a !i#ilar contract of !i#ple loan$ 3"e law allow! t"e bank! to offer t"e lowe!t po!!ible intere!t rate to depo!itor! w"ile c"arging t"e "ig"e!t po!!ible intere!t rate on t"eir own borrower! d. I!di#(e!#i$le I!#tit%tio!. Bank! "a(e beco#e an ubi4uitou! pre!ence a#ong t"e people. w"o "a(e co#e to regard t"e# wit" re!pect and e(en gratitude. and #o!t of all. confidence$ e. I)(re##ed *it P%$lic Tr%#t. 3"e bu!ine!! of banking i! i#bued wit" public intere!t$ 3"e !tabilit' of t"e bank! largel' depend! on t"e confidence of t"e people in t"e "one!t' and efficienc' of bank!$ f. De&ree of Dili&e!ce. 3"e law i#po!e! on bank! "ig" !tandard! in (iew of t"e fiduciar' nature of banking 7 #ore t"an t"at of a good fat"er of a fa#il'$ B83 t"e !a#e "ig"er degree of diligence i! not e0pected to be e0erted b' bank! in co##ercial tran!action! t"at do

&.

. i. ,. ".

l.

not in(ol(e t"eir fiduciar' relation!"ip wit" t"eir depo!itor!$ (%ote& +iligence e0tend! to 9inancial in!titution! Treat)e!t of Acco%!t# *it +etic%lo%# Care. B83 t"ere i! no law #andating bank! to call up t"eir client! w"ene(er t"eir repre!entati(e! wit"draw !ignificant a#ount! fro# t"eir account!$ D%ty to Kee( Record#. A bank "a! a fiduciar' dut' to keep efficientl' a record of it! tran!action! wit" it! depo!itor!$ Ba!"# are Not Grat%ito%# Bailee#. Bank! are run for gain. and t"e' !olicit depo!it! in order t"at t"e' can u!e t"e #one' for t"at (er' purpo!e$ Ba!"# are Not E-(ected to $e I!falli$le. Deali!& *it Re&i#tered .a!d#. i. Bank! !"ould e0erci!e #ore care and prudence in dealing e(en wit" regi!tered land!. t"an pri(ate indi(idual!. for t"eir bu!ine!! i! one affected wit" public intere!t$ Ab!ent good fait". bank! would be denied t"e protecti(e #antle of land regi!tration !tatute$ ii. Bank! "a(e acce!! to #ore facilitie! in confir#ing t"e identit' of t"eir :udg#ent debtor!$ *t !"ould act #ore cautiou!l'. e!peciall' if !o#e uncertaint' "ad been reported b' t"e apprai!er ta!ked to #ake (erification!$ 3"e uncertaint' !"ould not be treated a! fli#!' #atter$ iii. 1a!e 1& 3"e act of ; Bank of entru!ting to 1 t"e owner6! duplicate certificate entru!ted to it b' A wit"out e(en notif'ing A and ab!ent an' prior in(e!tigation on t"e (eracit' of 16! clai# and c"aracter i! a patent failure to fore!ee t"e ri!k created b' t"e act$ i/. 1a!e 2& A bank w"ic" accepted a propert' a! #ortgage de!pite t"e e0i!tence of !tructure! and occupant! ot"er t"an t"e #ortgagor !"owed t"e bank6! negligence$ /. 1a!e <& 3"u!. w"ile it i! true. 0 0 0 t"at a per!on dealing wit" regi!tered land! need not go be'ond t"e certificate of title. it i! likewi!e a well/!ettled rule t"at a purc"a!er or #ortgagee cannot clo!e "i! e'e! to fact! w"ic" !"ould put a rea!onable #an on "i! guard. and clai# t"at "e acted in good fait" under t"e belief t"at t"ere wa! no defect in t"e title of t"e (endor or #ortgagor$ Ba!"# )ay E-cl%de Per#o!# i! t eir Pre)i#e#. Bank! #a' i#po!e rea!onable condition! or li#itation! to acce!! b' non/e#plo'ee! to it! pre#i!e! and record!. !uc" a! t"e e0clu!ion of non/e#plo'ee! fro# t"e working area! for e#plo'ee!. e(en ab!ent an' i##inent or actual unlawful aggre!!ion on or an

).

in(a!ion of it! propertie! or u!urpation t"ereof. pro(ided t"at !uc" li#itation! are not contrar' to t"e law$ C ar&i!& of I!tere#t for .oa!#. 3"e c"arging of intere!t for loan! for#! a (er' e!!ential and funda#ental ele#ent of t"e banking bu!ine!!$ *n fact. it #a' be con!idered to be t"e (er' core of t"e banking6! e0i!tence or being$

I0.

.ia$ility for Act# of Officer# a!d E)(loyee# degree of re!pon!ibilit'. care and tru!twort"ine!! e0pected on bank!6 e#plo'ee! and official!/ greater t"an t"o!e ordinar' clerk! and e#plo'ee!

==Bank! are e0pected to e0erci!e t"e "ig"e!t degree of diligence in t"e !election and !uper(i!ion of t"eir e#plo'ee!& 1$ e0erci!e "ig" !tandard of perfor#ance and in!ure t"at it! e#plo'ee! will do likewi!e$ 2$ bank i! liable for t"e wrongful act! of it! officer! done in t"e intere!t of t"e bank or in t"eir dealin! a! bank repre!entati(e! but not for t"e act! out!ide t"e !cope of t"eir aut"orit'$ A. Ne&li&e!ce of a +a!a&er /bank i! liable for t"e negligence or t"e #i!deed of it! branc" #anager Ne&li&e!ce of Officer# G>% R8L>& a banking corporation i! liable for t"e wrongful or tortuou! act! and declaration! of it! officer! or agent! wit"in t"e cour!e and !cope of t"eir e#plo'#ent if a corporation knowingl' per#it! it! officer!. or an' ot"er agent. to perfor# act! wit"in t"e !cope of apparent aut"orit'/ be e!topped fro# den'ing !uc" aut"orit'$ Ne&li&e!ce of Teller# "ig" degree of diligence in in!uring t"at t"e' return t"e pa!!book onl' to t"e depo!itor or "i! aut"ori,ed aut"orit'$ 9ailure to do !o. t"e' will clot"e t"at unaut"ori,ed per!on pre!u#pti(e owner!"ip of t"e pa!!book. facilitating unaut"ori,ed wit"drawal! b' t"at per!on$ NOTE: appropriation of money by a teller is not estafa since juridical possession remains with the bank; teller only material possession☺(felony: qualified theft abuse of confidence! Ri& t to Reco/er fro) E)(loyee# / bank! #a' reco(er fro# it! e#plo'ee! for an' pa'#ent! #ade in (iew of t"e latter6! negligent or cri#inal act! .ia$ility for Da)a&e# / concurrence of in:ur' to t"e plaintiff and legal re!pon!ibilit' b' t"e per!on cau!ing it / to award tort da#age!/ an indi(idual #u!t be in:ured in t"e conte#plation of law? t"u! t"ere #u!t be breac" before da#age!

B.

C.

D.

E.

#a' be awarded and t"e breac" of dut' !"ould be t"e pro0i#ate cau!e of t"e in:ur'$ 1$ Actual and 1o#pen!ator' +a#age! a$ w"en t"e obligation i! breac"ed/ con!i!t! in t"e pa'#ent of a !u# of #one'. i$e$ loan or forbearance t"en t"e intere!t due would be t"at w"ic" #a' "a(e been !tipulated in writing$ 3"e intere!t due it!elf !"all earn legal intere!t fro# t"e ti#e it i! :udiciall' de#anded@ 12A per annu# to be co#puted fro# default$ b$ not con!tituting a loan or forbearance an intere!t on t"e a#ount of da#age! awarded #a' be i#po!ed at t"e di!cretion of t"e court at t"e rate of BA per annu#$ c$ w"en t"e :udg#ent of t"e court awarding a !u# of #one' beco#e! final and e0ecutor'. t"e rate of legal intere!t w"et"er t"e ca!e fall! under (a or (b . !"all be 12A per annu# fro# !uc" finalit' until !ati!faction$ 2$ >0e#plar' +a#age! / law allow! t"i! b' wa' of e0a#ple for t"e public good <$ -oral +a#age! G>% R8L>/ corporation (artificial being i! not entitled to #oral da#age! B83/ for breac" of fiduciar' dut' re4uired of a bank. a corporate client #a' clai# !uc" da#age! w"en it! good reputation i! be!#irc"ed b' !uc" breac". a!n !ocial "u#iliation re!ult! t"erefro#$ F. Re#(o!deat S%(erior1 Dili&e!ce i! t e Selectio! a!d S%(er/i#io! of E)(loyee# A bank i! bound b' t"e negligence of it! e#plo'ee! under t"e principle of re!pondeat !uperior or co##and re!pon!ibilit'$ 3"e defen!e of e0erci!ing t"e re4uired diligence in t"e !election and !uper(i!ion of e#nplo'ee! i! %)3 a co#plete defen!e in culpa contractual" unlike in culpa aquiliana# 1$ C"o!e aut"orit' i! needed in order for an entit' to engage in banking or 4ua!i/banking function!D Ba!&"o Se!tral 2$ C"at agenc' of t"e go(ern#ent deter#ine! w"et"er an entit' or per!on i! perfor#ing banking or 4ua!i/banking function! wit"out aut"orit' fro# t"e Bangko SentralD EowD +o!etary Board. T e $oard t ro%& t e #%(er/i#io! of t e BSP e-a)i!e1 i!#(ect1 or i!/e#ti&ate t e $oo"# a!d record# of #%c (er#o! or e!tity. Note: E-i#te!ce of a /icti) act%ally i!,%red i# !ot !ece##ary i! deter)i!i!& * et er a! e!tity i# e!&a&ed i! ille&al $a!"i!&. <$ C"at i! t"e !cope of t"e aut"orit' of t"e Super(i!ing and >0a#ining +epart#entD a.2 to ad)i!i#ter oat to a!y #%c (er#o!1 e)(loyee1 officer or director of a!y #%c e!tity. $.2 to co)(el t e (re#e!tatio! or (rod%ctio! of #%c $oo"#1 doc%)e!t#1 (a(er# or record# t at are rea#o!a$ly !ece##ary to a#certai! t e fact# relati/e to t e tr%e f%!ctio!# a!d o(eratio!# of #%c (er#o! or e!tity.

F$ C"at i! t"e e0ten!ion of t"e e0a#ining power!D 3"e BS2 !"all al!o "a(e t"e aut"orit' to e0a#ine an enterpri!e w"ic" i! w"oll' or #a:orit'/owned or controlled b' t"e bank t"at i! under e0a#ination$(t"i! additional aut"orit' i! a(ailable onl' w"en t"e !ub:ect i! a bank$ G$ C"at i! t"e 1ertificate of Aut"orit' to Regi!terD It i# a certificate i##%ed $y t e +o!etary Board1 * ic i# a! i!di#(e!#a$le re3%ire)e!t * e! re&i#teri!& article# of i!cor(oratio! *it t e Sec%ritie# a!d E-c a!&e Co))i##io!$ B$ C"at are t"e re4uire#ent! for t"e i!!uance of !uc" certificateD >(idence !"owing t"at& 4.2 all re3%ire)e!t of e-i#ti!& la*# a!d re&%latio!# to e!&a&e i! $%#i!e## are co)(lied *it . 5.2 t e (%$lic i!tere#t a!d eco!o)ic co!ditio!#1 $ot &e!eral a!d local ,%#tify t e a%t ori6atio! 7.2 t e a)o%!t of ca(ital1 t e fi!a!ci!&1 or&a!i6atio!1 directio!1 a!d ad)i!i#tratio!1 a# *ell a# t e i!te&rity of t e or&a!i6er# a!d ad)i!i#trator# rea#o!a$ly a##%re t e #afety of de(o#it# a!d t e (%$lic i!tere#t. 7$ Eow #a' !u##on! be !er(ed to a bankD a.2 Sec. 44. Ser/ice %(o! do)e#tic (ri/ate ,%ridical e!tity. 8 e! t e defe!da!t i# a cor(oratio!1 (art!er# i( or a##ociatio! or&a!i6ed %!der t e la*# of t e P ili((i!e# *it a ,%ridical (er#o!ality1 #er/ice )ay $e )ade o! t e (re#ide!t1 )a!a&i!& (art!er1 &e!eral )a!a&er1 cor(orate #ecretary1 trea#%rer1 or i!' o%#e co%!#el. 9R%le 4:1 Sectio! 44 of t e R%le# of Co%rt.2 $.2 Sec. 45. Ser/ice %(o! forei&! (ri/ate ,%ridical e!tity. 8 e! t e defe!da!t i# a forei&! (ri/ate ,%ridical e!tity * ic a# tra!#acted $%#i!e## i! t e P ili((i!e#1 #er/ice )ay $e )ade o! it# re#ide!t a&e!t de#i&!ated i! accorda!ce *it la* for t at (%r(o#e1 or1 if t ere $e !o #%c a&e!t1 o! t e &o/er!)e!t official de#i&!ated $y la* to t at effect1 or o! a!y of it# officer# or a&e!t# *it i! t e P ili((i!e#. 9Sec. 45. R%le 4:2 8$ Strict co#pliance i! nece!!ar' wit" t"e #ode of !er(ice to confer :uri!diction of t"e court o(er a corporation$ 3"e officer upon w"o# !er(ice i! !er(ed #u!t be one w"o i! na#ed in t"e !tatute!? ot"erwi!e. t"e !er(ice i! in!ufficient$ C"at i! t"e purpo!e of t"i! ruleD To re!der rea#o!a$ly certai! t at t e cor(oratio! recei/e *ill (ro)(t a!d (ro(er !otice i! a! actio! a&ai!#t it. %ote& Ser(ice of !u##on! on a bank #anager i! in(alid$ A ca!e !"ould not be di!#i!!ed !i#pl' becau!e an original !u##on! wa! wrongfull' done$

*t i! not pertinent w"et"er t"e !u##on! i! de!ignated a! an original or an alia! !u##on a! long a! it "a! ade4uatel' !er(ed it! purpo!e$ 1EA23>R 2& )RGA%*HA3*)% -A%AG>->%3 A%+ A+-*%*S3RA3*)% )9 BA%IS. J8AS*/BA%IS A%+ 3R8S3 >%3*3*>S (pro(i!ion "alo! to kc ganun din un book parang codal )RGA%*HA3*)% 1ondition!& (S21 • 3"at t"e entit' i! a !tock corporation • 3"at it! fund! are obtained fro# t"e public . w"ic" !"all #ean 20 or #ore per!on! • 3"at t"e #ini#u# capital re4uire#ent! pre!cribed b' t"e #onetar' board for eac" categor' of bank! are !ati!fied 1apabilitie!& • *n ter#! of financial re!ource! and tec"nical e0perti!e and integrit' • Licen!ing proce!! !"all incorporate and acce!!#ent of 1$ 2$ <$ F$ G$ 3"e bank! owner!"ip !tructure +irector! and !enior #anage#ent *t! operation plan. and *nternal control!. a! well a! *t! pro:ected financial condition and capital ba!e

1apital Re4uire#ent! • Re4uired #ini#u# capital (pre!cribed b' t"e #onetar' board 3K2> )9 BA%I A-)8%3 (-illion 8ni(er!al F9G0 co##ercial 2F00 3"rift Eead office in #anila <2G Eead office out!ide -la G2 Rural Cit"in -la 2B 1itie! of cebu and da(ao 1< 1!t. 2nd. <rd cla!! citie! and 1!t cla!! B$G #unicipalitie! Ft". Gt". Bt" cla!! citie! and 2nd. <rd. Ft" cla!! 2$B #unicipalitie! • At lea!t 2GA of t"e toal aut"ori,ed capital !tock !"all be !ub!cribed b' t"e !ub!criber! of t"e propo!ed bank. and at lea!t 2GA of !uc" !ub!cription !"all be paid up. pro(ided t"at in no ca!e !"all t"e paid/up capital be le!! t"an t"e #ini#u# re4uired capital !tated abo(e$ LSec 1< 1orporation 1ode

e a foreign bank to ac4uire up to one "undred percent (100A of t"e (oting !tock of onl' one (1 bank organi.en! #a' beco#e #e#ber! of t"e board of director! of a bank to t"e e0tent of t"e foreign participation in t"e e4uit' of !aid bank$ • *ndependent director 7 a per!on ot"er t"an an officer or e#plo'ee of t"e bank. e0cept for t"e election of officer! w"ic" !"all re4uire t"e (ote of a #a:orit' of all t"e #e#ber! of t"e board$ +irector! or tru!tee! cannot attend or (ote b' pro0' at board #eeting!$ • • • • • Branc"e! • A bank #a' be organi. quorum. t"e -onetar' Board #a' aut"ori.1>23 CE>% A83E)R*H>+ BK -)%>3ARK B)AR+ O !tock purc"a!ed !"all be !old wit"in B #ont"! fro# ti#e of purc"a!e • At co##on law.en of t"e 2"ilippine!.ompensation and Other )enefits of (irectors and Officers $ 3o protect t"e find! of depo!itor! and creditor! t"e -onetar' Board #a' regulate t"e pa'#ent b' t"e bark to it! director! and officer! of co#pen!ation.S%$#cri$er# < Pro(o#ed Director# -u!t be per!on! of integrit' and of good credit !tanding in t"e bu!ine!! co##unit' -u!t not "a(e been con(icted of an' cri#e in(ol(ing #oral turpitude. to be li!ted a#ong original !ub!criber! in Article! of incorporation 8ni(er!al and co##ercial 7 wit"in ot out!ide 2"ilippine! upon prior appro(al b' BS2 All ot"er bank! 7 go(erned b' pertinent law! • Ac4ui!ition of Poting Stock in a +o#e!tic Bank GBL pro(ide!& Sec$ 7<$ $cquisition of %otin& 'tock in a (omestic )ank $ 7 Cit"in !e(en (7 'ear! fro# t"e effecti(it' of t"i! act and !ub:ect to guideline! i!!ued pur!uant to t"e 9oreign Bank! Liberali. bonu!e!. a trea!urer w"o #a' or #a' not be a director.*ncorporator!M Sub!criber! I!cor(orator# .ed to e!tabli!" branc"e! or ot"er office! !"all be re!pon!ible for all bu!ine!! conducted in !uc" branc"e! and office! to t"e !a#e e0tent and in t"e !a#e #anner a! t"oug" !uc" bu!ine!! "ad all been conducted in t"e "ead office$ Bank N branc"e! N ot"er office! @ 1 unit • STOCKHO. t"e -onetar' Board #a' aut"ori. a !ecretar' w"o !"all be a re!ident and citi. Corporate officers. !tock option!.e an' foreign bank.e b' t"e election of a pre!ident. t"e -onetar' Board !"all adopt #ea!ure! a! #a' be nece!!ar' to en!ure t"at at all ti#e! t"e control of !e(ent' percent (70A of t"e re!ource! or a!!et! of t"e entire banking !'!te# i! "eld b' bank! w"ic" are at lea!t #a:orit'/owned b' 9ilipino!$ An' rig"t.en!"ip of t"e indi(idual !tock"older! in t"at bank$ 1ontrolling !tock"older! 7 indi(idual! "olding #ore t"an G0A of t"e (oting !tock of t"e corporate !tock"older! of t"e bank Poting !tock& co##ercial 7 B0A? t"rift 7 F0A? rural bank 7 full' owned and "eld b' 9ilipino +eter#ining nationalit' of bank 7 control te!t i! applied BOARD OF DIRECTORS %u#ber of +irector! • 3"ere !"all be at lea!r G and #a0i#u# of 1G #e#ber! of board of director! of bank. legiti#ate or co##on/law. w"ic" prior to t"e effecti(it' of t"i! Act a(ailed it!elf of t"e pri(ilege to ac4uire up to !i0t' percent (B0A of t"e (oting !tock of a bank under t"e 9oreign Bank! Liberali.orporate 'tockholdin&s# / 3wo or #ore corporation! owned or controlled b' t"e !a#e fa#il' group or !a#e group of per!on! !"all be con!idered related intere!t! and #u!t be full' di!clo!ed in all tran!action! b' !uc" corporation! or related group of per!on! wit" t"e bank$ • A bank aut"ori. not officer! or e#plo'ee! of go(ern#ent agenc' c"arged wit" !uper(i!ion of loan S%$#cri$er# -u!t "a(e ade4uate financial !trengt" to pa' for t"eir propo!ed !ub!cription in bank • 9oreign indi(idual! and non/bank corporation! #a' own or control up to F0A of t"e (oting !tock of a do#e!tic bank$ O appl' to 9ilipino and do#e!tic non/bank corporation! 3"e percentage of foreign/owned (oting !tock! in a bank !"all be deter#ined b' t"e citi. and e(er' deci!ion of at lea!t a #a:orit' of t"e director! or tru!tee! pre!ent at a #eeting at w"ic" t"ere i! a 4uoru# !"all be (alid a! a corporate act. a corporation "a! no lien upon t"e !"are! of !tock"older! for an' indebtedne!! to t"e corporation and t"ere i! no !tatute creating !uc" lien$ 1o#pen!ation and ot"er Benefit! of +irector! and )fficer! Sec$ 18$ . 2 of w"o# !"all be independent director! • 1orporation 1ode& Sec.ed wit" not le!! t"an G nor #ore t"an 1G incorporator! *n e0ce!! of 1G. profit !"aring and fringe benefit! onl' Forei&! Stoc" oldi!&# GBL pro(ide! .ation Act and t"e 3"rift Bank! Act. to furt"er ac4uire (oting !"are! !uc" bank to t"e e0tent nece!!ar' for it to own one "undred percent (100A of t"e (oting !tock t"ereof$ *n t"e e0erci!e of t"e aut"orit'. t"e director! of a corporation #u!t for#all' organi. 5>.ed under t"e law! of t"e Republic of t"e 2"ilippine!$ Cit"in t"e !a#e period. allowance. all of legal age and a #a:orit' of w"o# are re!ident! of t"e 2"ilippine!. pri(ilege or incenti(e granted to a foreign bank under t"i! Section !"all be e4uall' en:o'ed b' and e0tended 9a#il' Group! or Related *ntere!t Sec$12$ 'tockholdin&s of *amily +roups of . / An' nu#ber of natural per!on! not le!! t"an fi(e (G but not #ore t"an fifteen (1G . fee!.DINGS 3rea!ur' Stock! • GBL pro(ide! no bank !"all& 1$ 2$ 2urc"a!e or ac4uire !"are! of it! own capital !tock? or Accept it! own !"are! a! a !ecurit' for a loan >. w"o !"all be a director. #a' for# a pri(ate corporation for an' lawful purpo!e or purpo!e!$ >ac" of t"e incorporator! of ! !tock corporation #u!t own or be a !ub!criber to at lea!t one (1 !"are of t"e capital !tock of t"e corporation$ • %on/ 9ilipino citi.elated -nterests $ 7 Stock"olding! of indi(idual! related to eac" ot"er wit"in t"e fourt" degree of con!anguinit' or affinit'. it !ub!idiarie! or affiliate! or related intere!t! • Specific 4ualification! on independent director (!ee banking book page G8 +irector! of -erged or 1on!olidated Bank! • %u#ber of director! #u!t not e0ceed 21 -eeting! • -a' be conducted t"roug" #odern tec"nologie! • Cit"in 2"ilippine! 7 #u!t be !tated in b' law! Sec. Number and qualifications of incorporators. !"all be con!idered fa#il' group! or related intere!t! and #u!t be full' di!clo!ed in all tran!action! b' !uc" corporation! or related group! of per!on! wit" t"e bank$ $ Sec$ 1<$ . 4=. / *##ediatel' after t"eir election. e0cept t"at no one !"all act a! pre!ident and !ecretar' or a! pre!ident and trea!urer at t"e !a#e ti#e$ 3"e director! or tru!tee! and officer! to be elected !"all perfor# t"e dutie! en:oined on t"e# b' law and t"e b'/law! of t"e corporation$ 8nle!! t"e article! of incorporation or t"e b'/law! pro(ide for a greater #a:orit'. and !uc" ot"er officer! a! #a' be pro(ided for in t"e b'/law!$ An' two (2 or #ore po!ition! #a' be "eld concurrentl' b' t"e !a#e per!on.ation Act. a #a:orit' of t"e nu#ber of director! or tru!tee! a! fi0ed in t"e article! of incorporation !"all con!titute a 4uoru# for t"e tran!action of corporate bu!ine!!.

officer! or !tock"older!.beco#e! operational I!de(e!de!t A%ditor Sec$ G8# -ndependent $uditor$ / 3"e -onetar' Board #a' re4uire a bank. or on t"e ba!i! of !pecial engage#ent!? but in an' ca!e. e0perience. 4ua!i/bank. a! well a! di!pute! between an' or all of t"e# and t"e bank. 4ua!i/bank! or tru!t entitie! ari!ing out of and in(ol(ing relation! between and a#ong t"eir director!. 7 A bank. or a (iolation of t"i! 1ode co##itted wit"in fi(e (G 'ear! prior to t"e date of "i! election or appoint#ent. education. t"e Bangko Sentral !"all be con!ulted b' ot"er go(ern#ent agencie! or in!tru#entalitie! in action! or proceeding! initiated b' or broug"t before t"e# in(ol(ing contro(er!ie! in bank!. including t"e re!ult! of it! operation!. t"e a#ount of it! capital actuall' paid up$ %o branc" of an' foreign bank doing bu!ine!! in t"e 2"ilippine! !"all in an' wa' announce t"e a#ount of t"e capital and !urplu! of it! "ead office. 4ua!i/bank or tru!t entit' !"all !ub#it to t"e appropriate !uper(i!ing and e0a#ining depart#ent of t"e Bangko Sentral financial !tate#ent! in !uc" for# and fre4uenc' a! #a' be pre!cribed b' t"e Bangko Sentral$ Suc" !tate#ent!. bank! or an' of t"eir branc"e! or office! #a' open for bu!ine!! on Saturda'!. t"e independent auditor !"all be re!pon!ible to t"e bank6!. t"e -onetar' Board #a' di!4ualif'. tru!tee or officer of an' corporation$ • %1BA 2ro(i!ion/ Sec 9 and 27 (!ee book p BG • 2*+1 law !ec 17 (pB7 • RA 7<G< !ec G (pB7 • Appendi0 <8. an' !trike or lockout in(ol(ing bank!. !"all 4ualif' a! a director.ER +ACHINES )ff/!ite A3-! • 1ondition!& 1$ Sub#it report to appropriate depart#ent of BS2 2$ *n!talled onl' in center of acti(it' O ade4uate internal control and !ecurit' #ea!ure! !"all be adopeted and !ub#itted to BS2 <$ )nl' bank! w"ic" "a(e !"own general co#pliance -obile A3-! • 1ondition!& 1$ Pi!it onl' center! of acti(it' confined wit"in -anila 2$ Secure in!urance co(erage or !elf/in!urance !c"e#e <$ *nfor# BS2 of actual date a -obile A3. working da'! !"all #ean -onda'! to 9rida'!. 4ua!i/bank or tru!t entit' in public place! it #a' deter#ine. !"all publi!" a !tate#ent of it! financial condition. and of it! branc"e!. con!ultant or in an' capacit' in t"e bank$ BANKING DA?S AND HOURS Sec$ 21$ )ankin& (ays and 0ours$ 7 8nle!! ot"erwi!e aut"ori. All #e#ber! of t"e Board of +irector! of t"e rural bank !"all be citi.ed or !ub!cribed capital !tock wit"out indicating at t"e !a#e ti#e and wit" e4ual pro#inence. / 3"e banking indu!tr' i! "ereb' declared a! indi!pen!able to t"e national intere!t and. e0cept if !uc" da'! are "olida'!$ Rule! and Regulation! 1ircular G00 (See book page B9 AUTO+ATED TE. #a' allow !uc" bank. officer. 3"at not"ing in t"i! Act !"all be con!trued a! pro"ibiting an' appointi(e or electi(e public official fro# !er(ing a! director. or of t"e bank in it! entiret' wit"out indicating at t"e !a#e ti#e and wit" e4ual pro#inence t"e a#ount of t"e capital. "owe(er. !uc" a! but not li#ited to t"e following& 18$1$ C"en a bank i! under co#ptroller!"ip or con!er(ator!"ip? or 18$2$ C"en a bank i! found b' t"e -onetar' Board to be conducting bu!ine!! in an un!afe or un!ound #anner? or 18$<$ C"en a bank i! found b' t"e -onetar' Board to be in an un!ati!factor' financial condition$ 9*3 A%+ 2R)2>R R8L> 2ower! of t"e -onetar' Board Sec$ 1B$ *it and /roper . 4ua!i/bank or tru!t entit' and to !ub#it a report of !uc" audit 9inancial State#ent! Sec$ B0. notwit"!tanding t"e pro(i!ion! of an' law to t"e contrar'. i! located. definitel' a!!igned to !uc" branc". if an'. in !uc" ter#! under!tandable to t"e la'#an and in !uc" fre4uenc' a! #a' be pre!cribed Bangko Sentral.en! of t"e 2"ilippine! at t"e ti#e of t"eir a!!u#ption to office& 2ro(ided. pa!! upon and re(iew t"e 4ualification! and di!4ualification! of indi(idual! elected or appointed bank director! or officer! and di!4ualif' t"o!e found unfit$ After due notice to t"e board of director! of t"e bank. w"ic" !"all be a! of a !pecific date de!ignated b' t"e Bangko Sentral. including t"o!e of it! !ub!idiarie! and affiliate!. t"e 2re!ident of t"e 2"ilippine! #a' at an' ti#e inter(ene and a!!u#e :uri!diction o(er !uc" labor di!pute in order to !ettle or ter#inate t"e !a#e$ Report! of Strike! and Lockout! . 3"at bank! w"ic" opt to open on da'! ot"er t"an working da'! !"all report to t"e Bangko Sentral t"e additional da'! during w"ic" t"e' or t"eir branc"e! or office! !"all tran!act bu!ine!!$ 9or purpo!e! of t"i! Section. all bank! including t"eir branc"e! and office! !"all tran!act bu!ine!! on all working da'! for at lea!t !i0 (B "our! a da'$ *n addition.. bank! !"all #ake a(ailable to t"e public in !uc" for# and #anner a! t"e Bangko Sentral #a' pre!cribe t"e co#plete !et of it! audited financial !tate#ent! a! well a! !uc" ot"er rele(ant infor#ation including t"o!e on enterpri!e! #a:orit'/owned or controlled b' t"e bank.in e0ceptional ca!e! and w"en t"e circu#!tance! warrant. tru!t' entit' andMor t"e indi(idual #e#ber! t"ereof? to conduct. in >ngli!" or 9ilipino. and co#petence$ +i!4ualification! • 1ircular G1< !erie! of 200B (!ee book p B1 • 1orporation 1ode o Sec$ 27$ (isqualification of directors" trustees or officers# / %o per!on con(icted b' final :udg#ent of an offen!e puni!"able b' i#pri!on#ent for a period e0ceeding !i0 (B 'ear!. officer! or !tock"older!$ Sec$ 22$ Strikes and Lockouts. Financial Statements$ 7 >(er' bank. 4ua!i/bank or tru!t entit' to re(iew t"e internal audit and control !'!te# of t"e bank. lieu of t"e publication re4uired in t"e preceding paragrap". in !pecial ca!e! and upon application of t"e bank. if un!ettled after !e(en (7 calendar da'! !"all be reported b' t"e Bangko Sentral to t"e Secretar' of Labor w"o #a' a!!u#e :uri!diction o(er t"e di!pute or decide it or certif' t"e !a#e to t"e %ational Labor Relation! 1o##i!!ion for co#pul!or' arbitration$ Eowe(er. !u!pend or re#o(e an' bank director or officer w"o co##it! or o#it! an act w"ic" render "i# unfit for t"e po!ition$ *n deter#ining w"et"er an indi(idual i! fit and proper to "old t"e po!ition of a director or officer of a bank. !"all !"ow t"ee actual financial condition of t"e in!titution !ub#itting t"e !tate#ent. Sunda'! or "olida'! for at lea!t t"ree (< "our! a da'& /ro1ided. 4ua!i/bank6! or tru!t entit'6! board of director!$ A cop' of t"e report !"all be furni!"ed to t"e -onetar' Board$ 3"e -onetar' Board #a' al!o direct t"e board of director! of a bank. Publication of Capital Stock . !uc" fact !"all be !tated in. 4ua!i/bank or tru!t entit' of w"ic" t"e' are director!. 4ua!i/bank or tru!t entit' concerned fro# a li!t of certified public accountant! acceptable to t"e -onetar' Board$ 3"e ter# of t"e engage#ent !"all be a! pre!cribed b' t"e -onetar' Board w"ic" #a' eit"er be on a continuing ba!i! w"ere t"e auditor !"all act a! re!ident e0a#iner. -anual of Regulation! of Bank! Sec$ 10 (pB7 2ro"ibition on 2ublic )fficial! (RA 7<G< Sec. 4ua!i/bank or tru!t entit' to engage t"e !er(ice! of an independent auditor to be c"o!en b' t"e bank. 4ua!i/bank or tru!t entit'.ed b' t"e Bangko Sentral in t"e intere!t of t"e banking public. 4ua!i/bank or tru!t entit' incorporated under t"e law! of t"e 2"ilippine! !"all not publi!" t"e a#ount of it! aut"ori. regard !"all be gi(en to "i! integrit'. w"en warranted b' t"e circu#!tance!$ Additionall'.ule$ / 3o #aintain t"e 4ualit' of bank #anage#ent and afford better protection to depo!itor! and t"e public in general t"e -onetar' Board !"all pre!cribe. in t"e ca!e of a do#e!tic in!titution or t"e principal branc" or office in t"e ca!e of a foreign bank. >. !ub!idiarie! and affiliate!. office!. at lea!t once e(er' 4uarter in a new!paper of general circulation in t"e cit' or pro(ince w"ere t"e principal office. eit"er per!onall' or b' a co##ittee created b' t"e board. t"en in a new!paper publi!"ed in -etro -anila or in t"e neare!t cit' or pro(ince$ 3"e Bangko Sentral #a' b' regulation pre!cribe t"e new!paper w"ere t"e !tate#ent! pre!cribed "erein !"all be publi!"ed$ $ 3"e -onetar' Board #a' allow t"e po!ting of t"e financial !tate#ent! of a bank. and !"all contain !uc" infor#ation a! #a' be re4uired in Bangko Sentral regulation!$ S>1 B1$ P%$licatio! of Fi!a!cial State)e!t#$ / >(er' bank. t"e -onetar' Board. but if no new!paper i! publi!"ed in t"e !a#e pro(ince. training. t"at will infor# t"e public of t"e true financial condition of a bank a! of an' gi(en ti#e$ $ *n period! of national andMor local e#ergenc' or of i##inent panic w"ic" directl' t"reaten #onetar' and banking !tabilit'. an annual balance !"eet audit of t"e bank. 4ua!i/bank or tru!t entit'. and !"all for# part of t"e publication$ Sec$ B<$ 'ettlement of (isputes $ 7 3"e pro(i!ion! of an' law to t"e contrar' notwit"!tanding. b' a (ote of at lea!t fi(e (G of it! #e#ber!. 4ua!i/bank or tru!t entit' to defer for a !tated period of ti#e t"e publication of t"e !tate#ent of financial condition re4uired "erein$ Sec$ B2.

t"e owner!"ip and capital re4uire#ent!. Ser/ici!& de(o#it# o%t#ide $a!" (re)i#e#. Law! go(erning ot"er t'pe! of bank! Sec$ 71$ Other )ankin& 2aws$ 7 3"e organi. in!ofar a! t"e' are not in conflict wit" t"e pro(i!ion! of t"e 3"rift Bank! Act. rural bank! and cooperati(e bank! !"all be go(erned b' t"e pro(i!ion! of t"e 3"rift Bank! Act. c$ ot"er e#plo'ee! w"o "a(e direct and i##ediate re!pon!ibilit' in t"e "andling of tran!action! andMor record! pertaining to de#and depo!it! or current account!$ d$ t"e !pou!e! and relati(e! wit"in t"e !econd degree of con!anguinit' and affinit' of t"e officer! and e#plo'ee! co(ered b' t"e pro"ibition$ e$ bu!ine!! intere!t! of all t"e abo(e #entioned w"erein t"e' own a #a:orit' of t"e !tock$ 7. to a per!on na#ed t"erein or to bearer or order a na#ed !u# of #one'$ / b' (irtue of t"e contract of depo!it between banker and depo!itor. De)a!d De(o#it#. / A c"eck i! a bill of e0c"ange drawn on a bank. "owe(er.ed to !olicit and accept depo!it! out!ide t"eir bank pre#i!e! !ub:ect to condition!$ . t"e Rural Bank! Act. rural bank!. trea!ur' warrant!. unle!! !uc" c"eck "a! been cleared and credited to t"e account of t"e creditor. and t"e 1ooperati(e 1ode !"all likewi!e appl' to t"rift bank!. for purpo!e! of pre!cribing t"e #ini#u# ratio w"ic" t"e net wort" of a t"rift bank #u!t bear to it! total ri!k a!!et!. / te#porar' o(erdrawing! again!t current account !"all not be allowed.ation. C%rre!t Acco%!t# of Ba!" Officer# a!d E)(loyee# ' 3"e following bank officer! and e#plo'ee! are pro"ibited fro# #aintaining de#and depo!it! or current account! wit" t"e banking office in w"ic" t"e' are a!!igned$ a$ All officer!? b$ e#plo'ee! of t"e bank6! ca!" depart#ent!Mca!" unit!$ ' keep track of "i! a(ailable balance in t"e bank and not rel' on t"e bank to notif' "i# of t"e nece!!it' to fund certain c"eck! "e pre(iou!l' i!!ued$ A. No d%ty to )a"e %( t e deficie!cy fro) ot er acco%!t#. w"ere t"e c"eck i! drawn for an a#ount larger t"an w"at t"e drawer "a! on depo!it$ C. C ec"#. No o$li&atio! to )a"e (artial (ay)e!t ' a bank i! under no obligation to #ake a partial pa'#ent on a c"eck up to onl' t"e a#ount of t"e drawer6! fund!. ' w"ere a depo!itor "a! two account!. Re#(o!#i$ilitie# of Dra*er. Ki!d# of De(o#it#. t"e bank #a' refu!e to pa' t"e c"eck a! it "a! no dut' to #ake up t"e deficienc' fro# t"e !a(ing! account$ D. power!. it i! bound to "onor "i! c"eck! to t"e e0tent of t"e a#ount of "i! depo!it!$ / failure to do !o entitle! t"e drawer to !ub!tantial da#age! wit"out an' proof of actual da#age!$ / a bank i! not liable for it! refu!al to pa' a c"eck on account of in!ufficient fund! e(en if depo!it #a' be #ade later in t"e da'$ >. pa'able on de#and$ *t i! a written order addre!!ed to t"e bank b' a per!on "a(ing #one' in t"eir "and! re4ue!ting t"e# to pa' on pre!ent#ent. re!pecti(el'$ 3"e organi. power!. Sa/i!&# De(o#it# 4.• • Appri!e deput' go(ernor of t"e !uper(i!ion and e0a#ination !ector of BS2 +i!clo!e& cau!e and bank #anage#ent6! po!ition on it! legalit'? and bank operation! affected b$ 1a!"ier6!M-anager6!M1ertified 1"eck!? c$ bank draft!? d$ po!tal #one' order!? e$ trea!ur' warrantie!? f$ dul' funded 5on u!Q c"eck!? and ' w"ere t"at bank po!!e!!e! fund! of a depo!itor. !uper(i!ion and general conduct of bu!ine!! of *!la#ic bank! !"all be go(erned b' !pecial law!$ 3"e pro(i!ion! of t"i! Act. unle!! cau!ed b' nor#al bank c"arge! and ot"er fee! incidental to "andling !uc" account!$ / tec"nical o(erdrawing! ari!ing fro# 5force po!tingQ in clearing c"eck! !"all be debited b' bank! under 5Returned 1"eck! and ot"er 1a!" *te#! %ot *n 2roce!! of 1ollectionQ w"ic" i! part of 5ot"er a!!et!Q$ 1"eck! lodged under 5Returned 1"eck! etcQ !"all eit"er be returned or "onored t"e following da' before clearing$ 3"e ite#! to be u!ed a! co(er for t"e "onored c"eck! !"ould be li#ited to t"e following& a$ 1a!"? g$ fund tran!fer!Mcredit #e#o! wit"in t"e !a#e bank repre!enting proceed! of loan! granted under e0i!ting regulation!$ / drawing! again!t uncollected depo!it! !"all be pro"ibited e0cept w"en #ade again!t uncollected depo!it! repre!enting #anager6!. ' bank! #a' be aut"ori. . / de#and depo!it! 7 all t"o!e liabilitie! of t"e BS2 and of ot"er bank! w"ic" are deno#inated in 2"ilippine currenc' and are !ub:ect to pa'#ent in legal tender upon de#and b' t"e pre!entation of depo!itor6! c"eck!$ / A 8ni(er!al and 1o##ercial Bank #a' accept or create de#and depo!it! !ub:ect to wit"drawal b' c"eck *it o%t prior aut"orit' fro# t"e BS2$ / A 3"riftMRuralM1ooperati(e Bank #a' accept or create de#and depo!it! upon prior aut"orit' fro# t"e BS2$ 4. t"e pro(i!ion! of Section << of t"i! Act !"all go(ern$ C a(ter 7: De(o#it F%!ctio!# of Ba!"# I. Te)(orary O/erdra*i!&#@ Dra*i!&# a&ai!#t U!collected De(o#it#. it #u!t be con!idered a! #aking t"e pa'#ent out of it! own fund! and cannot ordinaril' c"arge t"e a#ount to t"e account of t"e depo!itor w"o!e na#e wa! forged$ B. re!pecti(el'$ Eowe(er. A. t"en it !"all be e4ui(alent to a deli(er' to t"e creditor of ca!" e4ual to t"at credited to "i! account$ B. and t"e 1ooperati(e 1ode. t"e Rural Bank! Act. ca!"ier6! or trea!urer6! c"eck!.ation. banker agree! to pa' c"eck! drawn b' t"e depo!itor pro(ided t"at t"e depo!itor "ad #one' in t"e "and! of t"e bank$ :. !uper(i!ion and general conduct of bu!ine!! of t"rift bank!. owner!"ip and capital re4uire#ent!. and draw! a c"eck upon t"e open account for #ore t"an t"e account contain!.e&al C aracter of C ec"# re(re#e!ti!& De)a!d De(o#it#. and cooperati(e bank!. D%ty of Ba!"# to K!o* Si&!at%re / a bank i! bound to know t"e !ignature! of it! cu!to#er! and if it pa'! a forged c"eck. an open and a !a(ing! account. D%ty of t e Ba!" to Ho!or C ec"#. po!tal #one' order! and dul' funded 5on u!Q c"eck! w"ic" #a' be per#itted at t"e di!cretion of eac" bank$ 5. ' t"e' do not "a(e legal tender power and t"eir acceptance i! at t"e option of t"e creditor.

and !uc" ot"er in!tru#ent! a! t"e -onetar' Board #a' deter#ine? and F$ t"e purpo!e of w"ic" i! relending or purc"a!ing recei(able! or ot"er obligation!$ F. A%t ority to de(o#it forei&! c%rre!cie# ' an' per!on #a' depo!it foreign currenc' in 2"ilippine bank! de!ignated b' t"e BS2 for t"e purpo!e of !uc" depo!it!$ / #a' depo!it foreign currencie! w"ic" are acceptable a! part of t"e international re!er(e. endor!e#ent. Ti)e De(o#it# / one t"e pa'#ent of w"ic" cannot be legall' re4uired wit"in a !pecified nu#ber of da'!$ 4.a$ financial condition of t"e bank i! !ound and t"e operation! and t"e 4ualit' of #anage#ent could rea!onabl' a!!ure t"e !afet' of t"e fund! w"ic" #a' be entru!ted to it! depo!it collector! or !olicitor!$ b$ propo!ed area i! clearl' defined / no law #andating bank! to call t"eir client! w"en t"eir repre!entati(e! wit"draw fro# t"eir account!$ C. R%le# o! Ser/ici!& NO8 Acco%!t#. !uc" a! acceptance!. cop' furni!"ed to t"e depo!itor d$ %)C account! !"all be kept and #aintained !eparatel' fro# t"e regular !a(ing! depo!it!$ e$ Blank %)C for#! !"all be prenu#bered and controlled a! in t"e ca!e of uni!!ued blank c"eck!$ f$ bank !tate#ent !"all be !ent to eac" depo!itor at end of #ont" for confir#ation of balance!$ g$ bank! #u!t u!e t"e for# pre!cribed b' pre!ent rule! on %)C account!$ D. Ne&otia$le order of 8it dra*al 9NO82 Acco%!t# 4. a$ prior or !i#ultaneou! wit" opening of a %)C account. participation!. Rural and 1o##ercial bank! #a' offer t"e !a#e wit" need of prior BS2 appro(al 5. S(ecial ti)e de(o#it#. Certficate# of Ti)e De(o#it a$ %egotiable 1ertificate! of 3i#e +epo!it 1$ 8ni(er!al and 1o##ercial bank #a' i!!ue wit"out prior aut"orit' fro# BS2 2$ 3"rift. De(o#it S%$#tit%te O(eratio!# 9E%a#i'$a!"i!& f%!ctio!#2 c$ confined wit"in a localit' w"ere t"ere are no ot"er bank! in operation or t"e depo!it potential of t"e !aid localit' i! !till untapped$ d$ applicant bank !"all in!titute t"en following #ini#u# !afeguard!$ 1$ all depo!it !olicitor! !"all be bonded for at lea!t 2"p 1000 !ub:ect to increa!e appro0i#ate to t"eir dail' collection!$ 2$ proper identification card!. e0cept t"o!e w"ic" are re4uired b' t"e BS2 to be !urrendered$ 5. tru!t certificate!. A%t ority of Ba!"# to acce(t forei&! c%rre!cy de(o#it#. prenu#bered in triplicate copie! and in t"ree color! 7 original cop' to t"e depo!itor. Ter) of ti)e de(o#it# / !"all be i!!ued for a !pecific period or ter# 5. Rural and 1ooperati(e Bank #a' i!!ue wit" prior appro(al of BS2$ b$ %on/negotiable 1ertificate! of 3i#e +epo!it / all #a' i!!ue wit"out need of BS2 appro(al$ E. ot"er t"an depo!it!. or acceptance of debt in!tru#ent! of an' kind. certificate! of a!!ign#ent! or !i#ilar in!tru#ent! wit" recour!e. w"ic" !"all be u!ed in c"ecking t"e aut"enticit' of !ignature!$ 7$ tran!action! !"all be recorded b' t"e bookkeeper or an' ledger clerk on t"e !a#e da' !uc" are accepted and t"e pa!!book! of t"e depo!itor! !"all be returned not later t"an t"e following bu!ine!! da'$ 8$ at end of eac" #ont". 8it dra*al# / bank! are pro"ibited fro# i!!uingMaccepting wit"drawal !lip! or an' ot"er !i#ilar in!tru#ent! de!igned to effect wit"drawal! of !a(ing! depo!it! wit"out re4uiring t"e pre!entation of pa!!book! and acco#pli!"#ent of t"e nece!!ar' wit"drawal !lip!. Forei&! C%rre!cy De(o#it# 4. !econd cop' for po!ting reference and t"ird cop' to be retained in t"e booklet$ G$ all collection! !"all be turned o(er to t"e ca!"ier at t"e end of eac" da' wit" a a 1ollection Su##ar' Report$ B$ depo!itor! !"all alwa'! be re4uired to acco#pli!" a !ignature card w"en opening an account. repurc"a!e agree#ent!. worn at all ti#e! b' t"e depo!it !olicitor! <$ ade4uate in!urance co(erage for t"e fund! in tran!it$ F$ depo!it !lip! in booklet for#. ad(i!e depo!itor! in writing of t"eir account balance$ 9$ place! of a!!ign#ent of bank !olicitor! !"all be rotated at lea!t 4uarterl'$ 5. bank !"all infor# depo!itor of t"e ter#! and condition!$ b$ bank !"all be re!pon!ible for t"e proper identification of it! depo!itor! and re4uire 2 !peci#en !ignature! and ot"er pertinent infor#ation$ c$ depo!it! !"all be co(ered b' depo!it !lip! in duplicate dul' (alidated and initialed b' t"e recei(ing teller. ' e!!ential ele#ent! of 4ua!i banking 1$ Borrowing fund! for t"e borrower6! own account$ 2$ 3went' or #ore lender! at an' one ti#e? <$ #et"od! of borrowing are i!!uance. e0cept for bank! aut"ori. pro#i!!or' note!. A%t ority to acce(t NO8 acco%!t# / aut"orit' !"all auto#aticall' be granted to an' accredited bank w"ic" #a' participate in t"e !uper(i!ed credit progra# to accept !peciakl ti#e depo!it! fro# t"e Agrarian Refor# 9und 1o#i!!ion wit" intere!t at a lower rate t"an t"o!e allowed on ti#e depo!it!$ / e0e#pt fro# t"e legal re!er(e re4uire#ent! 7.ed b' t"e BS2 to adopt t"e no pa!!book wit"drawal !'!te#$ ' %)C Account! are intere!t bearing depo!it account! t"at co#bine t"e pa'able on de#and feature of c"eck! and in(e!t#ent feature of !a(ing! account!$ / 8ni(er!al and 1o##ercial ban!k #a' offer %)C account! wit"out prior appro(al of BS2 / 3"rift. 1$ accept depo!it! and foreign currencie! in tru!t? nu#bered account! for recording and !er(icing !aid depo!it! are allowed$ .

ation wit"in t"e college or uni(er!it' and !igned b' t"e pertinent aut"orit' i!!uing t"e *+$ iii$ Bank! and non/bank financial in!titution !"all re4uire t"eir client! to !ub#it clear copie! of t"e two (alid *+! on a one/ti#e ba!i! onl'. +i!or# a!d Cor(oratio!# a# De(o#itor# 1. 2arent! #a' ne(ert"ele!! depo!it for t"eir #inor c"ildren and guardian for t"eir ward!$ De(o#it# i! t e T rift Ba!"# -inor! in t"eir own rig"t! and in t"eir own na#e! #a' #ake depo!it! and wit"draw t"e !a#e. a/e #%fficie!t di#cretio!1 a!d :. at t"e di!cretion of t"e bank$ BS2 1ircular %o$ GBF. and #e#ber!"ip *+! dul' i!!ued b' an' a!!ociation or organi. or at t"e co##ence#ent of a bu!ine!! relation!"ip$ 3"e' !"all re4uire t"eir client! to !ub#it an updated p"oto and ot"er rele(ant infor#ation w"ene(er t"e need for it ari!e!$ i($ 9inancial tran!action! #a' include re#ittance!. e(ading t"e e0ecution of a :udg#ent or cau!ing da#age$ An' per!on w"o conceal! "i! true na#e and ot"er per!onal circu#!tance! !"all be puni!"ed b' arre!to #enor or a fine not to e0ceed 200 pe!o!$ 1i(il 1ode& Art$ <79$ 3"e e#plo'#ent of pen na#e! or !tage na#e! i! per#itted.ing t"e !ignatorie! and !pecif'ing t"e depo!itar' bank$ C. S(eci)e! Si&!at%re#1 ID P oto# All banking in!titution are re4uired to !et a #ini#u# of t"ree (72 #(eci)e! #i&!at%re# to be !i#ultaneou!l' re4uired fro# eac" of t"eir depo!itor! and to %(date t e #(eci)e! #i&!at%re# of t eir de(o#itor# e/ery 9>2 year# or #oo!er.ed in place w"ere !igned$ (ii 2o!t *ncorporation 7 *n opening a bank account. Forei&! c%rre!cy co/er re3%ire)e!t# ' depo!itar' bank! !"all a$ #aintain at all ti#e! a 100A foreign currenc' co(er for t"eir liabilitie! b$ of w"ic" co(er at lea!t 1GA !"all be in t"e for# of foreign currenc' depo!it wit" t"e BS2$ c$ and t"e balance in t"e for# of foreign currenc' loan! or !ecuritie!. wit"out t"e a!!i!tance of t"eir parent! or guardian!. or intere!t to t"e #inor of w"o# "e i! t"e guardian. to #ake !a(ing! or ti#e depo!it! wit" and wit"draw t"e !a#e a! well a! recei(e intere!t t"ereon fro# banking in!titution!. Serie! of 2007 pro(ide! for t"e li!t of (alid identification card! a! follow!& i$ 1lient! w"o engage in a financial tran!action wit" t"e co(ered in!titution! for t"e fir!t ti#e !"all be re4uired to pre!ent t"e original and !ub#it a cop' of at lea!t two (alid p"oto/bearing identification docu#ent! i!!ued and !igned b' an official aut"orit'$ Palid *+! include t"e following • 2a!!port • +ri(er6! licen!e • 2rofe!!ional Regulation! 1o##i!!ion (2R1 *+ • %ational Bureau of *n(e!tigation(%B* clearance • 2olice clearance • 2o!tal *+ • Poter6! *+ • Baranga' certification • Go(ern#ent Ser(ice and *n!urance S'!te#(GS*S e/1ard • Social Securit' S'!te#(SSS card • 2"il"ealt" card • Senior 1iti. Cor(oratio!# 1orporation! #a' open bank account! a! follow!& (i *ncorporation Stage 7 *n ca!e t"e pa'#ent of !ub!cription i! in ca!". t"e Securitie! and >0c"ange 1o##i!!ion re4uire! a Bank 1ertificate of depo!it )f paid/up capital notari. w"ic" !"all be of !"ort ter# #aturitie! and readil' #arketable. librar' *+.i!!ue certificate! to e(idence !uc" depo!it! to di!count !aid certificate!$ accept !aid depo!it! a! collateral for loan! !ub:ect to !uc" rule! and regulation! G$ to pa' intere!t in foreign currenc' on !uc" depo!it! 7. bank!Mnon/bank financial in!titution! !"ould en!ure t"at t"e client i! identified in an official or ot"er identif'ing docu#ent!$ Re(i!ed 2enal 1ode& Art$ 178$ 8!ing fictitiou! na#e and concealing true na#e$ R 3"e penalt' of arre!to #a'or and a fine not to e0ceed G00 pe!o! !"all be i#po!ed upon an' 2$ <$ F$ per!on w"o !"all publicl' u!e a fictitiou! na#e for t"e purpo!e of concealing a cri#e. d$ !uc" foreign currenc' loan! #a' include loan! to do#e!tic enterpri!e! w"ic" are e0port oriented or regi!tered wit" t"e Board of *n(e!t#ent!.en 1ard • )(er!ea! Corker! Celfare Ad#ini!tration ()CCA *+ • )9C *+ • Sea#an6! Book • Alien 1ertification of Regi!trationM*##igrant 1ertificate of Regi!tration • Go(ern#ent office *+ Se$g$ Ar#ed 9orce! of t"e 2"ilippine! (A92 . t"e foreign currenc' co(er !"all be in t"e !a#e currenc' a! t"at of t"e corre!ponding foreign currenc' liabilit'$ f$ BS2 #a' pa' intere!t on t"e foreign currenc' depo!it and if re4ue!ted !"all e0c"ange t"e foreign currenc' note! and coin! into foreign currenc' in!tru#ent! drawn on it! depo!itar' bank!$ +epo!itar' bank! 4ualified b' t"e -onetar' Board for e0panded foreign currenc' depo!it are e0e#pt fro# t"e 1GA co(er re4uire#ent !tated in (b and #a' e0tend foreign currenc' loan! to an' do#e!tic enterpri!e wit"out t"e li#it! pre!cribed regarding #aturit' and #arketabilit' and !uc" loan! !"all be eligible for purpo!e! of t"e 100A foreign currenc' co(er pre!cribed$ :. di(idend!.De(o#it S%$#tit%te# . t"en !uc" pa'#ent !"all be #ade onl' to t"e guardian$ 5. !ot ot er*i#e di#3%alified $y a!y ot er i!ca(acity. pro(ided it i! done in good fait" and t"ere i! no in:ur' to t"ird per!on!$ 2en na#e! and !tage na#e! cannot be u!urped$ Art$ <80$ >0cept a! pro(ided in t"e preceding article. *it dra*a$ility a!d tra!#fera$ility of Forei&! C%rre!cy De(o#it#. t"e Board of +irector! *!!ue! a re!olution aut"ori. a#ong ot"er!. Eo#e +e(elop#ent -utual 9und (E+-9 *+!T • 1ertification fro# t"e %ational 1ouncil for t"e Celfare of +i!able 2er!on! (%1C+2 • • +epart#ent of Social Celfare and +e(elop#ent (+SC+ 1ertification$ )t"er (alid *+! i!!ued b' t"e Go(ern#ent and it! in!tru#entalitie! ii$ Student! w"o are beneficiarie! of an )9C and w"o are not 'et of (oting age !"all al!o be re4uired to pre!ent two *+!$ )t"er *+! #a' include birt" certificate. in t"eir own rig"t and in t"eir own na#e!. Ad)i!i#tratio! of De(o#it# A. and #a' recei(e di(idend! and intere!t& Provided however1 3"at. ' no re!triction on !uc" e0cept t"o!e ari!ing fro# t"e contract between t"e depo!itor and bank$ G. / anon'#ou! account! and t"o!e under fictitiou! na#e! !"ould not be allowed or kept$ *n ca!e w"ere !uc" i! allowed. a$le to read a!d *rite1 7. Ti)e of Pay)e!t of I!tere#t o! Ti)e De(o#it#. !ub:ect to li#itation! i#po!ed b' t"e -onetar' Board$ e$ >0cept a! t"e -onetar' Board #a' ot"erwi!e pre!cribe or allow. A!o!y)o%# a!d N%)$ered Acco%!t#. a! falling under t"e definition of tran!action$ B. no per!on !"all u!e different na#e! and !urna#e!$ / 2lea!e !ee al!o 1A 1F2 a! a#ended b' RA B08G$ II. +i!or# -inor! are (e!ted wit" !pecial capacit' and power. if an' guardian !"all gi(e notice in writing to an' t"rift bank not to #ake pa'#ent! of depo!it!. pro(ided t"e following re4uire#ent! re4ui!ite! are #et& 1$ at lea#t #e/e! year# of a&e1 5.

auto#ated teller #ac"ine! (A3.oa!#1 a!d ot er F%!ctio!# of Ba!"# Po*er# of a U!i/er#al Ba!" 1$ 2$ <$ 3"e power! aut"ori. depo!it! recei(ed !"all be booked a! "ereinafter pro(ided& Provided. electronic #ail.oa!#: 42 T e +o!etary Board )ay re&%late t e a)o%!t of loa!#1 credit acco))odatio!# a!d &%ara!tee# t at )ay $e e-te!ded $y a $a!" to it# DOSRI a# *ell a# i!/e#t)e!t# of #%c $a!" i! t e e!ter(ri#e# o*!ed a!d co!trolled $y it# DOSRI T e o%t#ta!di!& loa!#1 credit acco))odatio!#1 a!d &%ara!tee# * ic a $a!" )ay e-te!d to it# DOSRI # all $e A uni(er!al bank #a'& *n(e!t in t"e e4uitie! of allied and non/allied enterpri!e!? allied enterpri!e! #a' be financial or non/financial )wn up to 100A of t"e e4uit' in a t"rift bank. Boo"i!& of De(o#it# After Re&%lar Ba!"i!& Ho%r#. A/era&e Daily Bala!ce i$ Bank! #a' i#po!e and collect !er(ice c"arge! andMor #aintenance fee! on !a(ing! and de#and! depo!it! account!.on !creen #e!!age!. recei(ed after t"e clo!e of t"e regular banking "our! !"all be treated a! contingent account! of t"e da' of receipt and !"all be booked a! depo!it! t"e following banking da'$ I. Boo"i!& of No!'ca# De(o#it# +epo!it! c"eck! including 3on us4 c"eck!" mana&er5s6cashier5s6treasurer5s check and demand drafts. Boo"i!& of Ca# De(o#it#. !"all take effect onl' after due notice in t"e depo!itor? Pro/ided1 3"at infor#ation b' regular #ail. t"e period of dor#anc' !"all be properl' di!clo!ed a#ong t"e ter#! and condition! of t"e depo!it. bill! of e0c"ange. be booked a! depo!it! on t"e da' of t"e receipt$ H. 3"at a bank #a' !et a clearing cut/off ti#e for it! "ead office not earlier t"an two (2 "our! before t"e !tart of clearing at t"e BS2. draft!. (i A ti#e depo!it not wit"draw or renewed on it! due date !"all be treated a! a !a(ing depo!it and !"all earn intere!t fro# #aturit' to t"e date of actual wit"drawal or renewal at a rate applicable to !a(ing depo!it!$ (ii A depo!it !ub!titute in!tru#ent no wit"drawn or renewed on it! #aturit' date !"all fro# !aid date beco#e pa'able on de#and and !"all earn an intere!t or 'ield fro# #aturit' to actual wit"drawal or renewal at a rate applicable to a depo!it !ub!titute wit" a #aturit' of fifteen (1G da'!$ E. and t"at t"e depo!itor! !"all be infor#ed b' regi!tered #ail wit" return card on "i! la!t known addre!! at lea!t (B0 da'! prior to t"e i#po!ition of dor#anc' fee$ ii$ An' c"ange in t"e ter#! and condition! for t"e i#po!ition of !er(ice c"arge! andMor #aintenance fee.i)it# of . after w"ic" ti#e.at lea!t !i0t' (B0 da'! prior to i#ple#entation$ CHAPTER :: I!/e#t)e!t#1 . further. however. w"ic" are drawn again!t t"e depo!itor' bank and all it! office!. t"at bank! w"ic" are located in area! w"ere t"ere are no BS2 regionalMclearing arrange#ent! #a' !et a clearing cut/off ti#e not earlier t"at two (2 "our! before t"e !tart of t"eir local clearing after w"ic" ti#e depo!it! recei(ed !"all be booked likewi!e a! "ereinafter pro(ided$ F. a! well a! trea!ur' warrant! and po!tal #one' order!. courier deli(er' andMor ot"er alternati(e #ode! of co##unication on t"e depo!itor6! la!t known addre!! at lea!t !i0t' (B0 da'! prior to i#ple#entation !"all be con!idered !ufficient notice& Pro/ided1 f%rt er1 3"at failure of t"e depo!itor to #anife!t or regi!ter "i! ob:ection to t"e new !er(ice c"arge! and #aintenance fee! or an' c"ange in t"eir ter#! and condition! in writing wit"in t"irt' (<0 da'! fro# receipt of written notice of a#end#ent !"all be dee#ed to con!titute acceptance of !uc" c"ange!$ iii$ Bank! !"all likewi!e po!t !aid infor#ation on t"eir re!pecti(e web!ite!. e$g$. +epo!it!. a#ong ot"er!$ = Letter! of credit& an engage#ent b' a bank or ot"er per!on #ade at t"e re4ue!t of a cu!to#er t"at t"e i!!uer will "onor draft! or ot"er de#and! for pa'#ent upon co#pliance wit" t"e condition! !pecified in t"e credit? it i! t"e engage#ent of t"e bank to pa' t"e !eller once t"e draft and t"e re4uired !"ipping docu#ent! are pre!ented to it$ Generall'. #a'. 3"e intere!t or 'ield paid in ad(ance !"all not e0ceed t"e intere!t for one (1 'ear$ D.ed to a co##ercial bank 3"e power! of an in(e!t#ent "ou!e 3"e power to in(e!t in non/allied enterpri!e! Po*er# of a Co))ercial Ba!" 1$ 2$ 3"e general power! incident to corporation! All !uc" power! a! #a' be nece!!ar' to carr' on t"e bu!ine!! of co##ercial banking !uc" a!& accepting draft! and i!!uing letter! of credit? di!counting and negotiating pro#i!!or' note!.De(o#it S%$#tit%te#.oa!#1 Credit Acco))odatio!# a!d G%ara!tee# Single Borrower! Li#it& !"all not e0ceed 20A of t"e net wort" of !uc" bank >0cept& / a! t"e -onetar' Board #a' ot"erwi!e pre!cribe / depo!it! of rural bank! wit" go(ern#ent owned and controlled financial in!titution! Re#trictio! o! Ba!" E-(o#%re to Director#1 Officer#1 Stoc" older#1 a!d t eir Related I!tere#t# 9DOSRI2 . w"o procure! L)1 and oblige! "i#!elf to rei#bur!e t"e i!!uing bank? 2 t"e bank i!!uing t"e L)1? and < t"e !eller w"o !"ip! t"e good! to t"e bu'er$ A co##ercial bank #a'& *n(e!t onl' in e4uitie! of allied enterpri!e!. However. and in con!picuou! place! wit"in t"e bank pre#i!e! and ot"er place! near t"e bank6! own A3. w"ic" #a' be financial or non/financial )wn up to 100A of allied financial enterpri!e! )wn up to 100A of allied nonfinancial enterpri!e! - . w"et"er acti(e or dor#ant. !ub:ect to t"e following condition!$ a t"e i#po!ition of !uc" c"arge! or fee! i! clearl' !tated a#ong t"e ter#! and condition! of t"e depo!it? b t"e rate or a#ount of !uc" c"arge! of fee! i! properl' di!clo!ed a#ong t"e ter#! and condition! of t"e depo!it!? c t"e depo!it account balance! "a(e fallen below t"e re4uired #ini#u# #ont"l' A+B for dor#ant account! and for at lea!t two (2 con!ecuti(e #ont"! for acti(e a#ount!? d t"e re4uired #ini#u# #ont"l' A+B of depo!it! are properl' di!clo!ed a#ong t"e ter#! and condition! of t"e depo!it!? and e in t"e ca!e of c"arge! and fee! for dor#ant account! or dor#anc' fee. increa!e in t"e a#ount of !uc" c"arge! and fee! or increa!e in t"e re4uired #ini#u# #ont"l' A+B of depo!it!. all depo!it! and wit"drawal! during regular banking "our! !"all be credited or debited to depo!it liabilit' account! on t"e date receipt or pa'#ent t"ereof& Provided.*ntere!t or 'ield on ti#e depo!itMdepo!it !ub!titute #a' be paid at #aturit' or upon wit"drawal or in ad(ance: Provide. and not earlier t"an t"ree and one "alf (</1M2 "our! before t"e !tart of clearing branc"e!. w"et"er ca!" or non/ca!". t"e fall below t"e re4uired #ini#u# #ont"l' a(erage dail' balance (A+B . and ot"er e(idence of debt? and accepting and creating de#and depo!it!. rural bank or an' allied financial enterpri!e )wn up to 100A of t"e e4uit' in a non/financial allied enterpri!e *n(e!t in e4uitie! of non/allied enterpri!e *n(e!t in e4uitie! of 4ua!i/bank! - - 52 . 1a!" depo!it! recei(ed after t"e !elected clearing cut/off ti#e until t"e clo!e of t"e regular banking "our! !"all be booked a! depo!it! on t"e da' of receipt$ G. agencie! and e0ten!ion office doing bu!ine!! in t"e 2"ilippine!.i)it o! . Treat)e!t of +at%red Ti)e De(o#it#. recei(ed after t"e !elected clearing cut/off ti#e until t"e clo!e of t"e regular banking "our!. !tate#ent of account #e!!age!. at t"e option of t"e bank. Cleari!& C%t'off Ti)e A! a general rule. t"ere are < partie!& 1 t"e bu'er.

are "eld to be *ni4uitou!. bank! #a' ter#inate t"e L)1A and de#and i##ediate pa'#ent of t"e obligation$ Re3%ire)e!t# for Gra!t of .ority of all t e director# of t e $a!"1 e-cl%di!& t e director co!cer!ed1 !o director or officer of a!y $a!" # all: 4. and regulate t"e intere!t i#po!ed on #icrofinance borrower!$ G. 8ncon!cionable and >0orbitant *ntere!t! are again!t public polic'? "ence. a#ount to )%> 2>R1>%3 or #ore of t"e total !ub!cribed capital !tock of t"e bank. < elected to fill t"e (acancie! in t"e board of director!$ )fficer! include t"o!e& 1 w"o!e dutie! are defined b' t"e b'/law! or are generall' known to be officer! of t"e bank (i$e$ pre!ident. of a director. U!ilateral I!crea#e of Rate# F 3"e unilateral deter#ination and i#po!ition of increa!ed rate! i! (iolati(e of t"e principle of #utualit' of contract! under Article 1<08of t"e 1i(il 1ode$ )ne/!ided i#po!ition! are (oid$ G. t"e !c"edule of loan a#orti. for w"ic" rea!on t"e bank !"ould guard again!t lo!! due to negligence or bad fait"$ 9ro# t"e nature of it! bu!ine!!. intere!t. pro(i!ion! !"all be #ade for periodic a#orti. indi(iduall' or collecti(el'. in !pecial ca!e!. pre!cribe furt"er !ecurit' re4uire#ent! and reduce or. increa!e t"e e!tabli!"ed #a0i#u# ratio$ 9$ A%t ority to Pre#cri$e Ter)# a!d Co!ditio!# of .ation pa'#ent! t"erefro#. or tru!t entit'. a!!ociation! or fir#! w"oll' or #a:orit'/owned and controlled b' +)SR* Gra!t a!d P%r(o#e of . I!i3%ito%#1 U!co!#cio!a$le a!d E-or$ita!t I!tere#t F %otwit"!tanding t"e ine0i!tence of t"e 8!ur' Law. 8ncon!cionable and >0orbitant$ K. pledged or a!!igned to !ecure t"e loan! or credit acco##odation! 1orporation! or a!!ociation! of w"ic" +)SR* i! al!o a director or officer 1orporation!. A)orti6atio! o! . t"e bank #a' per#it t"e initial a#orti. directly or i!directly1 $orro* fro) #%c $a!" $eco)e a &%ara!tor1 i!dor#er1 #%rety for loa!# fro) #%c $a!" to ot er# i! a!y )a!!er $e a! o$li&or or i!c%r a!y co!tract%al lia$ility to t e $a!" B 1orporation!.ation pa'#ent to be deferred until re(enue! are !ufficient for !uc" purpo!e.oa!# a!d Ot er Credit Acco))odatio!# 9. or tru!t entit'$ t"eir Related *ntere!t! 1 !pou!e or relati(e wit"in t"e fir!t degree of con!anguinit' or affinit'.oa!# a!d Ot er Credit Acco))odatio!# F A#orti. 2 dul' elected in t"e #eeting! of !tock"older!. trea!urer and 2 w"o perfor#! function! of #anage#ent (i$e$ c"air#an. E-ce(t *it t e *ritte! a((ro/al of t e )a. *ni4uitou!. +irector! include t"o!e& 1 na#ed a! !uc" in t"e article! of incorporation.ed to i!!ue !uc" regulation! a! it #a' dee# nece!!ar' wit" re!pect to un!ecured L)1A t"at #a' be granted b' bank!$ E.ule: O *f t"e creditor unilaterall' and actuall' decrea!ed t"e intere!t c"arge! w"ene(er t"e #a0i#u# rate of intere!t i! reduced b' law or t"e -B$ I. 4ua!i/bank. officer or !tock"older of a bank 2artner!"ip of w"ic" +)SR* i! a partner 1o/owner wit" +)SR* of t"e propert'. but t"e !a#e #u!t be #ade annuall'$ • F G .oa!# a!d Ot er Credit Acco))odatio!#  3"e -onetar' Board (-B i! aut"ori.oa!#  3"e bu!ine!! of a bank i! one affected wit" public intere!t. it i! e0pected to a!certain and (erif' t"e identitie! of t"e per!on! it tran!act! bu!ine!!$ D.OCA2 A. (oid$ F G$GA per #ont". E#calatio! Cla%#e@ * e! allo*a$le O 2artie! #a' agree t"at t"e rate of t"e intere!t agreed upon be increa!ed in t"e e(ent t"at t"e #a0i#u# rate of intere!t i! increa!ed b' t"e -B& pro(ided t"at t"ere i! al!o a !tipulation t"at t"e intere!t would be reduced in t"e e(ent t"at t"e #a0i#u# rate of intere!t i! reduced$ 3"e !a#e !"all take effect on or after t"e date t"e #a0i#u# intere!t rate i! increa!ed or decrea!ed$ 3"e de/ e!calation clau!e i! an indi!pen!able re4ui!ite to t"e (alidit' and enforceabilit' of an e!calation clau!e in t"e contract$ 3"i! rule i! to pre(ent t"e one/!idedne!! in fa(or of t"e lender$ 8E9ception to the . Effect of 0oid I!tere#t Rate 7. Ot er Sec%rity Re3%ire)e!t# for Ba!" Cradit#  3"e -B !"all. b' regulation. 4ua!i/ bank. U!#ec%red . !ecretar'.ation !"all take into con!ideration t"e pro:ect ca!" flow of t"e borrower and adopt t"i! into t"e ter#! and condition! for#ulated b' bank!$ H.li)ited to a! a)o%!t e3%i/ale!t to t eir re#(ecti/e %!e!c%)$ered de(o#it# a!d $oo" /al%e of t eir (aid'i! ca(ital co!tri$%tio! i! t e $a!". w"o!e !tock"olding! in t"e !a#e. 5.oa!  State#ent of a!!et! and liabilitie!  State#ent of inco#e and e0penditure!  )t"er re4uire#ent! pre!cribed b' law to a!certain borrower6! abilit' to pa' O C"en t"e borrowed fund! are to be u!ed for purpo!e! w"ic" do not initiall' produce re(enue! ade4uate for regular a#orti. A)o%!t a!d P%r(o#e of . B.oa!#  Bank! !"all grant onl' in a#ount! and for period! of ti#e e!!ential for t"e effecti(e co#pletion of t"e operation$  3"e purpo!e !"all be !tated in t"e contract between t"e bank and borrower$  *f t"e proceed! were u!ed ot"er t"an t"e purpo!e !tated. but in no ca!e !"all t"e initial a#orti.ation pa'#ent!.ation date be later t"an G'ear! fro# t"e date on w"ic" t"e L)1A i! granted$ O *n ca!e of L)1A to #icrofinance !ector!. general #anager. e(p. (ice/c"air#an Stock"older! are an' !tock"older in t"e book! of t"e bank.ation !c"edule of bank L)1A !"all be adapted to t"e nature of t"e operation O *n ca!e of L)1A wit" #aturitie! of #ore t"an G'ear!. 2B/<GA per annu#. a!!ociation! or fir#! of w"ic" +)SR* own! at lea!t 20A of t"e !ub!cribed capital 2 < 7icrofinancin& 2oans / !#all loan! granted to ba!ic !ector! like t"e poor and low/inco#e "ou!e"old! for t"eir #icroenterpri!e! and !#all bu!ine!!e! C.oa!# a!d Ot er Credit Acco))odatio!#  3"e -B !"all pre!cribe related ter#! and condition! for (ariou! t'pe! of bank L)1A. !enior (p. or relati(e b' legal adoption. or rig"t #ortgaged. Rea#o! for Stri!&e!t R%le# i! Gra!ti!& .

!"all "a(e t"e ri& t to e!ter upon and take po!!e!!ion of !uc" propert' i##ediatel' after t"e date of t"e confir#ation of t"e auction !ale and ad#ini!ter t"e !a#e in accordance wit" law$ %)3>& = t"e one 'ear period i! to be reckoned fro# t"e date of t"e regi!tration of t"e !ale? action for annul#ent of t"e #ortgage doe! not toll t"e running of t"e period to redee# t"e foreclo!ed propert' =Real propert' #a' be #ortgaged to alien!. b' regulation. F7 of t"e GBL pro(ide!& (i *n t"e e(ent of foreclo!ure. if e0erci!ed after t"e pre!cripti(e period i! not reall' rede#ption but a repurc"a!e$ +*S3*%13*)%& Rede#ption i! b' force of law? t"e purc"a!er i! bound to accept t"e rede#ption$ %o !uc" obligation i#po!ed in repurc"a!e$ TRUTH IN . to redee# t"e propert' b' pa'ing t"e a#ount due under t"e #ortgage deed. Re!e*al or E-te!#io! of .ed or low/ co!t "ou!ing. and all t"e co!t and e0pen!e! incurred b' t"e bank or in!titution fro# t"e !ale and cu!tod' of !aid propert' le!! t"e inco#e deri(ed t"erefro#$ F$ O 3"e borrower #a' at an'ti#e prior to t"e #aturit' date prepa'.o##e# a!d 8rite'Off# O +ebt! on w"ic" intere!t i! pa!t due and unpaid. t"e #ortgagor or debtor w"o!e real propert' "a! been !old for t"e full or partial pa'#ent of "i! obligation !"all "a(e t"e rig"t *it i! o!e year after t"e !ale of t"e real e!tate. unle!! t"e !a#e are well/!ecured and in t"e proce!! of collection !"all be con!idered bad debt!$ 3"e -B !"all fi0 t"e a#ount of re!er(e! for bad debt! or doubtful account! or ot"er contingencie!$ Criting off L)1A !"all be !ub:ect to regulation! i!!ued b' t"e -B$ 6. local go(ern#ent unit! and ot"er acti(itie! wit" !ocial content$ N. t"e loan! "ad not 'et beco#e due and de#andable = rig"t of rede#ption #a' be e0tended b' agree#ent = e!toppel/ t"e bank con!ented to t"e e0ten!ion of rede#ption period if it "ad ti#e to ob:ect but did not$ =e0erci!e of t"e rig"t of rede#ption.O Since it i! (oid. w"et"er :udiciall' or e0tra:udiciall'. w"ic" are paid to or be paid b' !uc" per!on in connection wit" t"e tran!action but w"ic" are not incident to t"e e0ten!ion of credit? 3"e total a#ount to be financed? 3"e finance c"arge1 e0pre!!ed in ter#! of pe!o! and centa(o!? 3"e percentage t"at t"e finance bear! to t"e total a#ount to be financed e0pre!!ed a! a !i#ple annual rate on t"e out!tanding unpaid balance of t"e obligation$ <$ Sec. by regulation. prior to t"e con!u##ation of t"e tran!action. bot" indi(idual! and corporation! (R$A$ %o$ 1<< a! a#ended b' R$A$ F882 =de#and before foreclo!ure i! e!!ential? if not. t"e unpaid balance.oa!# to No!'Re#ide!t# O 3"i! i! to curb !peculation in t"e foreign e0c"ange #arket and to furt"er reinforce t"e #e#orandu# t"at pe!o depo!it! !"ould be funded fro# inward foreign e0c"ange re#ittance$ P. deduction of intere!t rate! fro# t"e loaned a#ount. to be credited a! down pa'#ent andMor trade/ in? FOREC. of an' #ortgage on real e!tate w"ic" i! !ecurit' for an' loan or ot"er credit acco##odation granted. fees. proceeding fro# t"e e0perience t"at bank! are able to conceal !uc" true co!t b' "idden c"arge!. t"e court will fi0 a #ore rea!onable and e4uitable rate$ *n #o!t ca!e!.OCA F 3"e -B #a'.OSURE OF REA. if an'. De/elo()e!t A##i#ta!ce I!ce!ti/e# O 3"e Bangko Sentral !"all pro(ide for incenti(e! to bank! e0tending loan! to finance educational in!titution!. service charges. penaltie! and ot"er c"arge! at t"e latter6! !ole di!cretion and wit"out gi(ing prior notice to or !ecuring t"e borrower6! con!ent$ 1 Interest. uncertaint' of intere!t rate!. Pre(ay)e!t of . pre!cribe t"e condition! and li#itation! e0ten!ion or renewal! of L)1A$ O.ENDING +*S1L)S8R>& An' creditor !"all furni!" to eac" ot"er to w"o# credit i! e0tended. "o!pital! and ot"er #edical !er(ice!. w"ic"e(er i! greater. . wit" intere!t t"ereon at t"e rate !pecified in t"e #ortgage. !ub:ect to t"e ter#! and condition! of t"e contract$ G$ +. e0cept t"at !uc" liabilit' !"all not e0ceed 22000 on an' credit tran!action$ 1R*-*%AL@ 9*%> b' not le!! 21I or #ore t"an 2GI or i#pri!on#ent for #ore t"an B #ont"!. t"e court reduced it to 12A per annu#$ .ed . indi(iduall' ite#i. prescribe.OCA 2$ 3"e a#ount!. a !tate#ent in writing !etting fort" t"e ff$& 1$ 3"e ca!" price or deli(ered price of t"e propert' or !er(ice to be ac4uired? = 1ourt! "a(e t"e aut"orit' to !trike down or #odif' pro(i!ion! in t"e pro#i!!or' note! t"at grant lender! unre!trained power to increa!e intere!t rate!. 7$ RA3*)%AL>& 2rotect u!er! fro# lack of awarene!! of t"e true co!t t"ereof. and t"e like$ 2>%AL3K& 1*P*L@ 2100 or in t"e a#ount e4ual to twice t"e fi!a!ce c ar&ed re3%ired b' !uc" creditor in connection wit" !uc" tran!action. in w"ole or in part.. t"e purc"a!er at t"e auction !ale concerned w"et"er in a :udicial or e0tra:udicial foreclo!ure. Pro/i#io!# for . !ociali. Ba!"# ca!!ot e-te!d Pe#o . nor #ore t"an one 'ear or bot"$ %)3>& =pur!uant to 3R83E L>%+*%G A13. (iolation !"all not affect t"e (alidit' or enforceabilit' of an' contract or tran!action!$ =S1 "eld t"at t"e lender cannot c"arge t"o!e t"at are not !tipulated in t"e pro#i!!or' note! (1on!olidated Bank and 3ru!t 1o$ (!$ 1A =no puni!"#ent or penalt' !"all appl' to t"e 2"ilippine Go(ern#ent or agenc' or an' political !ubdi(i!ion t"ereof$ (ii Eowe(er. ESTATE +ORTGAGE 3"e difference between t"e a#ount! !et fort" under clau!e! 1 and 2? 3"e c"arge!. cooperati(e!. it i! a! if t"ere wa! no e0pre!! contract t"ereon$ *n !uc" ca!e. discounts and such other charges incident to the extension of credit as the board may.

propert'. land. Bank! can ac4uire. !ecuritie! = no rig"t to repurc"a!e if t"e !ale i! in(alid <$ 1ollector of pa'#ent! = preferred !tatu! of bank.%d&)e!t#1 decree#1 )ort&a&e#1 or tr%#t deed# "eld b' it. net wort" or ca!" flow +$ So#e e0a#ple! on t'pe! of infor#ation to be di!clo!ed& %on/finance c"arge!. pa'#ent !c"e#e. or !er(ice! on credit$ Credit card recei/a$le#/ total out!tanding balance of credit card "older!$ +i!i)%) a)o%!t d%e/ -ini#u# a#ount t"at t"e credit card "older need! to pa' on or before t"e pa'#ent due date for a particular c'cle Defa%lt or deli!3%e!cy/ non/pa'#ent of an' a#ount le!! t"an t"e #ini#u# a#ount due wit"in two c'cle date! Acceleratio! cla%#e/pro(i!ion gi(ing t"e rig"t to t"e bank to de#and t"e obligation in full in ca!e of default or non/pa'#ent B$ 3"ere #u!t be a ri!k #anage#ent !'!te# w"ic" !"all co(er t"e organi. writ of po!!e!!ion beco#e! a #atter of rig"t and it! i!!uance i! #erel' a #ini!terial function +a. 5. t"e bank #a' continue to "old t"e propert' !ub:ect to t"e G0A li#itation on total in(e!t#ent$ Ot er Ba!"i!& Ser/ice#. plate or credit de(ice e0i!ting for t"e purpo!e of obtaining #one'. net #ont"l' receipt! of a bu!ine!! of t"e applicant. 3"o!e w"ic" t"e bank # all (%rc a#e at #ale# %!der . e4uip#ent and ot"er c"attel! and 2$ >4uit' in(e!t#ent of t"e bank in anot"er corporation engaged pri#aril' in real e!tate B.*P$ Bank! #a' al!o out!ource ot"er function! a! #a' be appro(ed b' t"e -B$ Refer to our late!t a!!ign#ent on t"e nature of function! w"ic" a bank #a' out!ource$ Credit Card Tra!#actio!# A$ +efinition of ter#! 1$ 1u!todian of (aluable ob:ect! (i$e$ docu#ent!. F$ -anaging agent.J8>S3*)%& C"et"er an alien/owned bank can ac4uire owner!"ip of re!idential lot b' (irtue of a deed of tran!fer a! !ettle#ent of a debt$ 3"e bank #a' al!o act a!& (191-L An!& %)$ 3"e purpo!e of t"e 1on!titution i! to place and keep in t"e "and! of t"e people t"e owner!"ip of pri(ate land! in order not to endanger t"e !ecurit' of t"e nation$ *f lea!ed for G0 'ear!. per#i!!ible$ =)ffer to repurc"a!e i! not a wai(er to 4ue!tion t"e !ale indebtedne!!. accounting. real propertie!. record! and report!. financial capabilit' (i$e$ net take "o#e pa'. building!. including bank e4uip#ent shall not e ceed !"# of combined capital accounts. and ot"er effect! recei(ed b' a bank a! a depo!itor' or a! an agent !"all be !eparate fro# t"e bank6! a!!et! and liabilitie!$ 3"e co!tract for a Safety De(o#it Bo. !ecuritie!. labor. Sub:ect to appro(al of t"e -B. con!ultant of in(e!t#ent #anage#ent upon prior appro(al of -B G$ Le!!or of !afet' depo!it bo0e! 3"e fund!. percentage of intere!t. t"e bail#ent being for "ire and #utual benefit$ A cu!to#er depo!ited "i! collection of !ta#p! and t"e bank placed t"e# at t"e lowe!t le(el of t"e !afet' depo!it bo0e!$ 3"e bank knew of a flood and t"e po!!ibilit' of it !eeping t"roug" t"e depo!it bo0e!$ Bank failed to gi(e notice of !uc" e(ent$ 3"e !ta#p! depo!ited were da#aged$ *! t"e Bank liableD Ke!$ 3"e bank failed to e0erci!e rea!onable care and prudence e0pected of a good fat"er of a fa#il'$ T e Ba!&"o Se!tral # all a/e f%ll a%t ority i! t e re&%latio! of electro!ic tra!#actio!#. 3"o!e w"ic" !"all be )ort&a&ed to it in good fait" $y *ay of #ec%rity of de$t#. and t"o!e w"ic" t"e bank # all (%rc a#e to #ec%re de$t# d%e it$ An' real propert' ac4uired or "eld under t"e!e circu#!tance! #u!t be di!po!ed of wit"in G 'ear! or a! #a' be pre!cribed b' t"e -B$ %e(ert"ele!!. not i#paired in ca!e t"e borrower i! under re"abilitation = after con!olidation title in t"e bu'er6! na#e. Ba!k! #u!t a!certain t"e applicant6! credit !tanding. dutie! #a' be defined b' t"e partie!$ 3"e relation created "ere i! t"at of a $ailor a!d a $ailee. and ot"er fee!$ >$ 9inance c"arge! !"all refer to intere!t c"arged to t"e card"older$ 9$ Bank! !"all keep !trictl' confidential t"e data on t"e card"older or con!u#er e0cept& 1$ Cit" con!ent 2$ relea!e. C"at con!titute! total in(e!t#entD 1$ All real e!tate and e4uip#ent nece!!ar' for t"e bank6! i##ediate u!e in t"e tran!action of it! bu!ine!! (i$e$ bank pre#i!e!. ad(i!er. !ub#i!!ion or e0c"ange of cu!to#er info wit" ot"er financial in!titution! <$ upon order of t"e court F$ di!clo!ure to collection agencie! of t"e bank G$ di!clo!ure to t"ird part' !er(ice !olel' for t"e a!!i!tance and !er(ice to t"e bank B$ di!clo!ure to in!urance co#panie! !olel' for t"e purpo!e of pre(enting lo!! and fraud . policie! and procedure! and internal control$ 1$ -ini#u# Re4uire#ent!. "old or con(e' Real e!tate b' wa' of !ati!faction of clai#! under t"e following circu#!tance!& 4. fund! 2$ 9inancial agent (bu' and !ell !"are!.i! a !pecial kind of depo!it !ince t"e full po!!e!!ion and control o(er t"e bo0 i! not gi(en to t"e renter$ (Guard ke' i! wit" t"e bank? renter6! ke' i! wit" t"e renter $ Bank i! not liable in ca!e lo!! attributable to :oint renter! w"o eac" "a! one renter ke'$ >it"er one could open it wit"out t"e ot"er$ Since it i! a contract. bank! #a' out!ource all infor#ation tec"nolog' !'!te#! and proce!!e! e0cept for in"erent banking function!$ . #et"od! of deter#ining t"e balance and t"e intere!t.or i!/e#t)e!t# Bank! are re(iewed b' t"e -onetar' Board (-B a! to t"eir #a:or ac4ui!ition! and in(e!t#ent!$ A$ Ceili!& o! I!/e#t)e!t / 3"e total investment in a real e!tate and i#pro(e#ent!. e(idence! of Credit card/ an' card. 3"o!e w"ic" !"all be co!/eyed to it i! #ati#factio! of de$t# 7.ational !et/up.

.!"all include& a$ #aking or pro#i!ing to #ake. etc b$ 9urni!" fake or #ake #i!repre!entation of #aterial fact! c$ Atte#pt to defraud t"e !aid bank C. 0. in!ult!. or 2$ unwillingne!! to #aintain a condition of li4uidit' dee#ed ade4uate to protect t"e intere!t of depo!itor! and creditor!. officer. profane language <$ di!clo!ure of t"e na#e! F$ t"reat to take an' action w"ic" cannot be legall' taken G$ co##unicating a credit info w"ic" i! fal!e B$ an' fal!e repre!entation or decepti(e #ean! 7$ #aking contact at incon(enient ti#e! (10p#/Ba# *$ Additional depo!it! doe! not increa!e credit li#it$ U$ 1ontract! between bank! and card"older! are contract! of ad"e!ion becau!e t"eir ter#! are prepared b' onl' one part'$ O!e (rice ta& Re3%ire)e!t >(er' retailer i! re4uired to di!pla' a price tag to indicate t"e price$ *t #u!t be written clearl'$ -u!t include PA3 if (atable$ Practice# * ic )%#t $e co!#idered relati/e to t e )ode of (ay)e!t. t"e !a#e i! allowed pro(ided t"e pa'#ent option! !"all be di!clo!ed b' wa' of a !eparate info but not in t"e price tag F$ 1a!" price tag and regular price tag on eac" product or !er(ice i! not allowed G$ 1a!" price tag and card price tag i! al!o not allowed S%rc ar&i!& $y retailer# i# !ot allo*ed.ed per!on an' infor#ation relati(e to t"e fund! or propertie! in t"e cu!tod' of t"e bank c$ Accept gift!. %o borrower of a bank !"allR a$ 9raudulentl' o(er(alue propert' offered a! !ecurit' for a loan. III. %o e0a#iner. officer. t"e u!e of a per!on6! credit card will !ub:ect "i! depo!it! wit" t"e bank to off!et an' a#ount due and pa'able on "i! credit card w"ic" "a(e not 'et been paid$ E$ 8nfair 1ollection 2ractice! Bank! #a' re!ort to all rea!onable and legall' per#i!!ible #ean! to collect a#ount! due t"e#$ 3"e following con!titute a (iolation& 1$ u!e of t"reat of (iolence or ot"er cri#inal #ean! 2$ u!e of ob!cenitie!. 2ro"ibited Act! 4$ %o director. "e !"all pa' onl' t"e price indicated in t"e price tag$ 2$ w"en t"roug" a credit card. card. a! in!urer. 1$ C"en t"e con!u#er pa'! in ca!". Pro i$ited Tra!#actio!# A. -B !"all appoint a con!er(ator a! t"e -B !"all dee# nece!!ar' to& 1$ take c"arge of t"e a!!et!. 1on!i!tent wit" t"e Bank! Secrec' Law. di!clo!e to an' unaut"ori. >0tra c"arge. onl' t"e price in t"e tag price$ <$ w"en retailer offer! t"e con!u#er an option to pa' in ca!". liabilitie! and #anage#ent t"ereof? 2$ reorgani. (Section B7 of t"e GBL B. co##i!!ion etc in order to influence !uc" per!on! in appro(ing loan and t"e like$ 7. or additional c"arge o(er and abo(e t"e price tag C a(ter >: PROHIBITED TRANSACTIONS AND CESSATION OF BANKING BUSINESS I. U!a%t ori6ed Ad/erti#e)e!t or B%#i!e## Re(re#e!tatio! Place)e!t U!der Co!#er/ator# i( A. 2ro"ibition to Act a! *n!urer /A bank !"all not directl' engage in in!urance bu!ine!! a! t"e in!urer$ 3"e ter# 5doing in!urance bu!ine!!Q or 5tran!acting an in!urance bu!ine!!Q. Ground! for Appoint#ent of 1on!er(ator /C"ene(er on t"e ba!i! of a report !ub#itted b' t"e appropriate !uper(i!ing or e0a#ining depart#ent. or ot"er credit acco##odation fro# !aid bank d$ )(er(alue or aid in o(er(aluing an' !ecurit' for t"e purpo!e of influencing in an' wa' t"e action! of t"e ban or an' bank? or e$ )ut!ource in"erent banking function!$ ('ec#::" +)2! 5. or on in!tal#ent. deducting t"erefro# it! lo!!e! and bad debt!$ %ote& (Section F< of t"e 1orporation 1ode I0. t"e -onetar' Board (-B find! t"at a bank or a 4ua!i/bank i! in a !tate of& 1$ continuing inabilit'. e#plo'ee or agent of an' bank !"allR a$ -ake fal!e entrie! in an' bank report or !tate#ent or participate in an' fraudulent tran!action b$ Cit"out order of a court of co#petent :uri!diction. fee. no bank !"all e#plo' ca!ual or nonregular per!onnel or too lengt"' probationar' per!onnel in t"e conduct of it! bu!ine!! in(ol(ing bank depo!it!$ 2ro"ibition Again!t )ut!ourcing 1ertain Banking 9unction ('ection ::" +)2! Co!d%cti!& B%#i!e## I! a! U!#afe or U!#o%!d +a!!er Pro i$itio! o! Di/ide!d Declaratio! /%o bank or 4ua!i/bank !"all declare di(idend! greater t"an it! accu#ulated net profit! t"en on "and. d$ )ffer an' director. fee! or co##i!!ion! or an' ot"er for# of re#uneration in connection wit" t"e appro(al of a loan. an' gift. e#plo'ee or agent of a bank.G$ )ff!et!/ pur!uant to Art!$ 1278 to 1290 of t"e %11. an' in!urance contract? b$ #aking or propo!ing an' contract of !uret'!"ip a! a (ocation c$ doing an' kind of bu!ine!!.e #anage#ent? <$ collect all #onie! and debt! due !aid in!titution. and >0erci!e all power! nece!!ar' to re!tore it! (iabilit'$ • L*J8*+*3K/ t"e abilit' of an a!!et to be con(erted into ca!" 4uickl' and wit"out II. including a rein!urance bu!ine!! d$ doing or propo!ing to do an' bu!ine!! in !ub!tance B. officer or e#plo'ee of t"e BS2 !"all co##it an' of t"e foregoing act or aid in t"e co##i!!ion of t"e !a#e$ :.

t"e -onetor' Board !"all notif' in writing t"e board of director! of it! finding! and direct t"e recei(er to proceed wit" t"e li4uidation of t"e in!titution$  3"e recei(er !"all& 1$ 9ile e0 parte wit" t"e proper R31. t"e deci!ion of t"e -B and BS2.ed co#petence in banking or finance #a' be de!inated a! recei(er$ 5. in(ol(ing act! or tran!action! w"ic" a#ount to fraud or a di!!ipation of t"e a!!et! of t"e in!titution$ /9or a 4ua!i/bank. written notice !"all be !ent to -B before actual L B. 3er#ination! of 1on!er(ator!"ip /-B i! !ati!fied t"at t"e in!titution can continue to operate on it! own /-B !"all. . PROHIBITED ACTS: An' director or officer of bank declared in!ol(ent or plaed under recei(er!"ip b' t"e -onetar' Board !"all not co##it an' of t"e ff$ act!& Refu!ing to turn o(er t"e bank6! record and a!!et! to t"e de!ignated recei(er!? b$ 3a#pering wit" bank record!? c$ Appropriating for "i#!elf or anot"er part'. Jualification! of 1on!er(ator /co#petent /konowledgeable in bank operation! and #anage#ent D.ITATED *f t"e recei(er deter#ine! t"at t"e in!titution cannot be re"abilitated or per#itted to re!u#e bu!ine!!. 1urrent and 1o#plete >0a#ination %ot %ece!!ar' /3"e ab!ence of an e0a#ination before t"e clo!ure of a bank did not #ean t"at t"ere wa! no ba!i! for t"e clo!ure order$ %eedle!! to !a'. >0pen!e! of 1on!er(ator!"ip /!"all be borne b' t"e bank or t"e 4ua!i/bank concerned H. and >0erci!e t"e general power! of a recei(er under t"e Re(i!e Rule! of 1ourt. Poluntar' Li4uidation /written notice of L !"all be !ent to -BB before !uc" li4uidation i! undertaken. 2eriod of 1on!er(ator!"ip /doe! not e0ceed one (1 'ear E. 0I. a! deter#ined b' t"e BS2. and wit"out re4uire#ent of prior notice or an' ot"er action. wit" t"e e0ception of t"e ad#ini!trati(e e0penditure!. for t"e purpo!e of pa'ing t"e debt! of !uc" in!titution in accordance wit" t"e rule! on concurrence and preference of credit under t"e 1i(il 1ode of t"e 2"ilippine!$ <$ B. 8HEN INSTITUTION CANNOT BE REHABI. an' per!on of recogni. or de!tro'ing or cau!ing #i!appropriation and de!truction of t"e bank6! a!!et!? d$ 2a'ing out or per#itting or cau!ing to be paid out an' fund of !aid bank? and e$ 3ran!ferring or per#itting or cau!ing to be tran!ferred an' !ecuritie! or propert' of !aid bank$ >. Ce##atio! of Ba!"i!& B%#i!e## A. deter#ine t"at t"e continuance t"ereof would in(ol(e probable lo!! to it! depo!itor! or creditor! I.an' price di!count$ A corporation i! li4uid if it "a! read' acce!! to ca!"$ • S)LP>%1K/ t"e condition t"at e0i!t! w"en liabilitie! a#ount to le!! tan total a!!et!. or b' a recei(er appointed to t"e bank upon (oluntar' di!!olution of a bank pur!uant to t"e 1orporation 1ode b$ c$ d$ . and t"e -B "a! t"e rig"t to inter(ene and take !uc" !tep! a! #a' be nece!!ar' to protect t"e intere!t! of creditor! /(oluntar' L #a' be undertaken b' t"e bank it!elf t"roug" it! board of director!. Ad#ini!ter t"e !a#e for t"e benefit of it! creditor!. G. w"et"er t"e in!titution #a' be re"abilitated or ot"erwi!e placed in !uc" a condition !o t"at it #a' be per#itted to re!u#e bu!ine!! wit" !afet' to it! depo!itor! and creditor! and t"e general public$ /An' deter#ination for t"e re!u#ption of bu!ine!! of t"e in!titution !"all be !ub:ect to t"e appro(al of t"e -B$ :.able a!!et!. or d$ "a! willfull' (iolated a cea!e and de!i!t order t"at "a! beco#e final. 9inal and >0ecutor' /action! of -B? e0cept on petition for certiorari G. b' a tru!tee appointed b' t"e bank. t"e li4uidation plan !"all be adopted b' t"e -onetor' Board$ 2$ 1on(ert t"e a!!et! of t"e in!titution! to #one'. %ot a 2recondition 2ower! of 1on!er(ator!"ip cannot *#pair t"e )bligation! of 1ontract! /no (oluntar' di!!olution of a bank !"all be undertake wit"out prior appro(al of t"e -B (acco#panied b' a L plan. like an' ot"er ad#ini!trati(e bod'. on t"e ba!i! of t"e report of t"e 1 or it! own finding!. >0clu!i(e 2ower to Appoint /(e!ted e0clu!i(el' wit" t"e -B K. but S"all not. to #eet it! liabilitie! c$ cannot continue in bu!ine!! wit"out in(ol(ing probable lo!!e! to it! depo!itor! or creditr!. Re#uneration F. AND EHECUTOR?  A! in t"e ca!e of con!er(ator!"ip& a$ 7. t"u! pro(iding t"e abilit' to pa' debt!$ 3"e te!t of in!ol(enc' i! #ea!ured b' deter#ining w"et"er t"e reali.. Recei(er!"ip and *n(oluntar' Li4uidation (Section B9 of t"e GBL 4.ural )ank of 'an 7i&uel" -nc# 1s# 7onetary )oard! 2rocedure! /3"e recei(er !"all i##ediatel'& a$ Gat"er and take c"arge of all t"e a!!et! and liabilitie! of t"e in!titution. pa' or co##it an' act t"at will in(ol(e t"e tran!fer or di!po!ition of an' a!!et of t"e in!titution$ /3"e recei(er #a' depo!it or place t"e fund! of t"e in!titution in non/!peculati(e in(e!t#ent!$ /3"e recei(er !"all deter#ine ASA2 but not later t"an ninet' (90 da'! fro# take o(er.able a!!et! of a bank are le!! t"an it! liabilitie!$ C. FINA. di!po!e of t"e !a#e to creditor! and ot"er partie!. #u!t "a(e !o#et"ing to !upport it!elf and it! finding! of fact #u!t be !upported b' !ub!tantial e(idence$ But it i! clear under R$A$ %o 7BG< t"at t"e ba!i! need not ari!e fro# an e0a#ination a! re4uired b' t"e old law$ (. a petition for a!!i!tance in t"e li4uidation plan adopted b' t"e 2"ilippine +epo!it *n!urance 1orp$ for general application to all clo!ed bank!$ a$ *n ca!e of 4ua!i bank!. a$ Ground! for Recei(er!"ip and Li4uidation if t"e -B find! t"at t"e in!titution& i! unable to pa' it! liablitie! a! t"e' beco#e due in t"e ordinar' cour!e of bu!ine!! b$ "a! in!ufficient reali.

DISPOSITION OF BANKING FRANCHISE 3"e Bangko Sentral #a'. e0pen!e! #entioned in *3>. e0ecution or ot"erwi!e$ >. t"e banking franc"i!e of a bank under li4uidation to operate in t"e area w"ere !aid bank or it! branc"e! were pre(iou!l' operating$ 2ro(ided.UNTAR? . %etention of &uridical Personalit' / w"ic" can !ue and be !ued t"roug" it! li4uidator$ .e&i# C.ation Act.ation Act and t"e 3"rift Bank! Act. Di#tri$%tio! of A##et# *n ca!e of li4uidation of a bank or 4ua!i/bank. be e0e#pt fro# an' order or garni!"#ent. DISPOSITION AND DISTRIBUTION OF ASSETS A.ation Act$ 3"e conduct of off!"ore banking bu!ine!! in t"e 2"ilippine! !"all be go(erned b' t"e pro(i!ion! of t"e )ff!"ore Banking S'!te# +ecree$ Offshore )ankin& refer! to t"e conduct of banking tran!action! in foreign currencie! in(ol(ing t"e receipt of fund! fro# e0ternal !ource! and t"e utili. award to an in!titution. E-cl%#i/e G%ri#dictio! of . t"e recei(er !"all pa' debt! of !uc" in!titution. t"e recei(er i! liable to t"e bank for t"e culpable or negligent failure to collect t"e a!!et! of !uc" bank and to !afeguard !aid a!!et!$ C a(ter A Forei&! Ba!"# a!d Tr%#t O(eratio!# *$ A$ 9oreign Bank! 3ran!acting Bu!ine!! in t"e 2"ilippine! 3"e entr' of foreign bank! in t"e 2"ilippine! t"oug" t"e e!tabli!"#ent of branc"e! !"all be go(erned b' t"e pro(i!ion! of t"e 9oreign Bank! Liberali. t"e -onetar' Board !"all adopt #ea!ure! a! #a' be nece!!ar' to en!ure t"at at all ti#e! t"e control of 70A of t"e re!ource! or a!!et! of t"e entire banking !'!te# i! "eld b' bank! w"ic" are at lea!t #a:orit'/owned b' 9ilipino!$ F. !ub!idiar' or affiliate of a foreign banking corporation w"ic" i! dul' aut"ori.1L8S*P> 2)C>R 3) A22)*%3 7 (e!ted e0clu!i(el' wit" t"e -onetor' Board$  C. one cannot obtain an ad(antage or a preference o(er anot"er b' an attac"#ent. Not lia$le to Pay i!tere#t / a banking in!titution "a! been declared in!ol(ent and !ub!e4uentl' clo!ed b' t"e BS2 cannot be "eld liable to pa' intere!t on bank depo!it! w"ic" accrued during t"e period w"en bank i! actuall' clo!ed and non/operational$ 7. i#e# to &rant new loans or to accept new deposits# Eowe(er.IABI. or failure to act of t"e recei(er$ At t"e !a#e ti#e. !tock"older! and t"e general public$ +ue to t"e nature of bank6! tran!action! and function!. w"ic" prior to t"e efffecti(it' of GBL a(ailed it!elf to t"e pri(ilege to ac4uire up to B0A if t"e (oting !tock of a bank under t"e 9oreign Bank! Liberali. EFFECTS OF RECEI0ERSHIP AND . Stay of e-ec%tio! / i! warranted if a bank wa! placed under recei(er!"ip$ 3"e a!!et! of t"e in!ol(ent banking in!titution are "eld in tru!t for e4ual benefit of all creditor!. Re#trictio! of Ba!"J# Ca(acity to act / Re!triction in relation to it! propert'$ / 3"e bank would not be able to do %>C B8S*%>SS. le('. upon !uc" ter#! and condition! a! t"e -onetar' Board #a' appro(e.ING FOR PETITION FOR RE0IE8  3"e bank6! li4uidator i! allowed to continue recei(ing collectible! and recei(able! or pa'ing off6! creditor6! clai#! and ot"er tran!action! pertaining to nor#al operation! of a bank$ i#e# prosecution of suits a&ainst debtors for collection and for foreclosure of mort&a&es# E.e a foreign bank to ac4uire up to 100A of t"e (oting !tock of onl' 1 bank organi. li4uidation or con!er(ator!"ip$ 7$ >. creditor!. attac"#ent or e0ecution$ D. EFFECT OF FI.IEUIDATION   *t i! a (alid e0erci!e of police power to protect t"e depo!itor!. t"e -onetar' Board #a' aut"ori. t"e -onetar' Board #a' aut"ori. A##et# are dee)ed %!der C%#todia . after pa'#ent of t"e co!t of proceeding!. and after it! in!ol(enc'.OSE NO8 HEAR . a fiduciar' relation!"ip i! created between t"e banking in!titution! and t"eir depo!itor!$ / and !"all. in accordance wit" t"e rule! on concurrence and preference of credit a! pro(ided in t"e 1i(il 1ode$ B. t"at w"ate(er proceed! #a' be reali. t"e recei(er of t"e bank i! obliged to collect debt! owing to t"e bank w"ic" debt! for# part of t"e a!!et! of t"e bank$ A.ed fro# !uc" award !"all be !ub:ect to t"e appropriate e0clu!i(e di!po!ition of t"e -onetar' Board$ b c .ATER SCHE+E I i! grounded on practical and legal con!ideration! to pre(ent unwarranted di!!ipation of t"e bank6! a!!et! and a! a (alid e0erci!e of police power to protect t"e depo!itor!. if public intere!t !o re4uire!.ation of !uc" fund!$ Offshore )ankin& . and #a' not be re!trained or !et a!ide b' t"e court e0cept on petition for certiorari on t"e ground t"at t"e action taken wa! in e0ce!! of :uri!diction or wit" !uc" gra(e abu!e of di!cretion a! to a#ount to lack or e0ce!! of :uri!diction$  CE) C*LL 9*L>& Stock"older! of record repre!enting t"e #a:orit' of t"e capital !tock wit"in 10 da'! fro# t"e receipt b' t"e board of director! of t"e in!titution of t"e order directing recei(er!"ip. DISPOSITION OF RE0ENUES AND EARNINGS All re(enue! and earning! reali. :. REASON BEHIND RECEI0ERSHIP AND IN0O.i3%idatio! Co%rt / pertain! onl' to t"e ad:udication of clai#! again!t t"e bank$ *t doe! not co(er t"e re(er!e !ituation w"ere it i! t"e bank w"ic" file! a clai# again!t anot"er per!on or legal entit'$ 0II.ed b' t"e Bangko Sentral ng 2ilipina! to tran!act off!"ore banking bu!ine!! in t"e 2"ilippine!$ =9oreign corporation! doing bu!ine!! in t"e 2"ilippine! are re4uired to obtain a licen!e a! pro(ided in !ec$ 1<< of t"e 1orporation 1ode$ B$ Ac4ui!ition of Poting Stock in a +o#e!tic Bank 9oreign Bank! are allowed entr' in t"e 2"ilippine! !ub:ect to t"e following rule!& a wit"in 7 'ear! fro# t"e effecti(it' of t"e GBL and !ub:ect to t"e guideline! i!!ued pur!uant to t"e 9oreign Bank! Liberali.ITIES 3"e bank i! bound b' t"e act!. fro# t"e #o#ent of !uc" recei(er!"ip or li4uidation. creditor!.nit #ean! a branc". !tock"older! and t"e general public$ D.OSE NO8 HEAR .ed under t"e law! of t"e 2"ilippine!$ Cit"in t"e !a#e period. under order of t"e court.3"e action! of t"e -onetar' Board !"all be final and e0ecutor. to furt"er ac4uire (oting !"are! of !uc" bank to t"e e0tent nece!!ar' for it to own 100A of t"e (oting !tock t"ereof$ *n t"e e0erci!e of t"i! aut"orit'. C.ATER SCHE+E 3"e law doe! not conte#plate prior notice and "earing before a bank #a' be directed to !top operation! and placed under recei(er!"ip$  A pre(iou! "earing nor due proce!! de#and t"at t"e correctne!! of -onetar' Board6! Re!olution to !top operation and proceed to li4uidation of fir!t ad:udged before #aking t"e re!olution effecti(e$  C.A abo(e !alarie! of !uc" per!onnel w"o!e e#plo'#ent i! rendered nece!!ar' in t"e di!c"arge of t"e li4uidation toget"er wit" t"e ot"er additional e0pen!e! cau!ed b'$ .I+ITATION: 3"e pro!ecution and action #u!t be done t"roug" t"e li4uidator$ 5. including a rea!onable e0pen!e! and fee! of t"e recei(er to be allowed b' t"e court.IEUIDATION $.ed an' foreign bank.ed b' t"e recei(er in winding up t"e affair! and ad#ini!tering t"e a!!et! of an' bank or 4ua!i/bank !"all be u!ed to pa' t"e co!t!.

dul' certified b' "i#. it !"all be unlawful for an' !uc" foreign bank to tran!act bu!ine!! in t"e 2"ilippine! unle!! it! licen!e i! renewed or rei!!ued$ b **$ >ntr' of 9oreign Bank! RA %o$ 77 21/ An Act Liberali. liabilitie!. or di!!olution of corporation! or for t"e fi0ing of t"e relation!. !er(ice of !u##on!. organi. of t"e !u##on!.ed agent or "ead$ *n ca!e of !er(ice for t"e bank upon t"e Bangko Sentral +eput' Go(ernor *n/c"arge of t"e !uper(i!ing and e0a#ining depart#ent!.d An' of t"e foregoing rig"t. it !"all be t"e dut' of t"e bank to na#e and de!ignate pro#ptl' anot"er agent or "ead upon w"o# !er(ice of !u##on! and proce!!e! in legal proceeding! again!t t"e bank and of notice! affecting t"e bank #a' be #ade.ed under t"e law! of t"e 2"ilippine! of t"e !a#e cla!!. #e#ber!. upon appro(al b' t"e 2re!ident a! t"e national intere!t #a' re4uire$ Sec$7/ %on/9ilipino citi. rule! and regulation! applicable to bank! organi. "olding.en! of t"e 2"ilippine! w"o are creditor! of a branc" in t"e 2"ilippine! of a foreign bank !"all "a(e preferential rig"t! to t"e a!!et! of !uc" branc" in accordance wit" e0i!ting law!$ >$ Su##on! and Legal 2roce!! *n all #atter! not !pecificall' co(ered b' !pecial pro(i!ion! applicable onl' to a foreign bank or it! branc"e! and ot"er office! in t"e 2"ilippine!. proce!!e! and legal notice! #a' be #ade upon t"e Bangko Sentral +eput' Go(ernor *n/1"arge of t"e Super(i!ing and e0a#ining depart#ent! and !uc" !er(ice !"all be a! effecti(e a! if #ade upon t"e bank or it! dul' aut"ori. or dutie! of !tock"older!. t"at a foreign bank or a 2"ilippine corporation #a' own up to a B0A of t"e (oting !tock of onl' one (1 do#e!tic bank or new banking !ub!idiar'$ c d . !ub:ect to co#pliance wit" t"e pre(iou! !ection! of t"i! act. e0cept t"o!e t"at pro(ide for t"e creation. benefit or ad(antage of t"e tru!tor or of ot"er! called beneficiarie!$ 1ourt! obtain :uri!diction o(er foreign bank! a! follow!& a Su##on! and legal proce!! !er(ed upon t"e 2"ilippine agent or "ead of an' foreign bank de!ignated to accept !er(ice t"ereof !"all gi(e :uri!diction to t"e court! o(er !uc" bank. t"at a foreign bank #a' a(ail it!elf of onl' one (1 #ode of entr'$ 9urt"er. or incenti(e granted to a foreign bank !"all be e4uall' en:o'ed b' and e0tended under t"e !a#e condition! to bank! organi.ed b' t"e bank upon w"o# !er(ice of !u##on!. and to file wit" t"e Securitie! and >0c"ange 1o##i!!ion a dul' aut"enticated no#ination of !uc" agent$ *n t"e ab!ence of t"e agent or "ead or !"ould t"ere be no per!on aut"ori. or notice$ 1$ Local Branc"e! of 9oreign Bank! 9$ Law! Applicable *n t"e ca!e of a foreign bank w"ic" "a! #ore t"an 1 branc" in t"e 2"ilippine!.ing t"e >ntr' and Scope of )peration! of 9oreign Bank! in t"e 2"ilippine! and 9or )t"er 2urpo!e! Sec$1 +eclaration of t"e 2olic'/ VV 3"e 2"ilippine banking and financial !'!te# i! "ereb' liberali.ed under t"e law! of t"e 2"ilippine!$ e 3"e !ending of !uc" cop' of t"e !u##on!. and !er(ice of notice! on !uc" agent or "ead !"all be a! binding upon t"e bank w"ic" "e repre!ent!$ S"ould t"e aut"orit' of !uc" agent or "ead to accept !er(ice of !u##on! and legal proce!!e! for t"e bank or notice to it be re(oked. proce!!e! and all legal notice! #a' be #ade. for#ation. all ot"er law!. t"e !aid +eput' Go(ernor !"all regi!ter and tran!#it b' #ail to t"e pre!ident or t"e !ecretar' of t"e bank at it! "ead or principal office a cop'. #anage#ent of fund! andMor propertie! of t"e tru!tor b' t"e tru!tee for t"e u!e. !ee book page! 271/27B ***$ 3ru!t )peration A$ Aut"orit' to engage in 3ru!t Bu!ine!! Trust )usiness refer! to an' acti(it' re!ulting fro# a tru!tee/tru!tee relation!"ip (tru!tee!"ip in(ol(ing t"e appoint#ent of a tru!tee b' a tru!tor for t"e ad#ini!tration. if it find! t"at t"e foreign bank i! in!ol(ent or in i##inent danger t"ereof or t"at it! continuance in bu!ine!! will in(ol(e palpable lo!! to t"o!e tran!acting bu!ine!! wit" it$ After t"e re(ocation of !uc" licen!e. B new foreign bank! !"all be allowed entr' under !ec$2 c upon t"e appro(al of t"e -onetar' Board$ An additional F foreign bank! #a' be allowed entr' on reco##endation of t"e -onetar' Board.en! #a' beco#e #e#ber! of t"e Board of +irector! of a bank to t"e e0tent of t"e foreign participation in t"e e4uit' of !aid bank$ %ote& for t"e full te0t of t"e Act. global reputation for financial inno(ation! and !tabilit' in a co#petiti(e en(iron#ent of t"e applicant? d !ee to it t"at reciprocit' rig"t! are en:o'ed b' 2"ilippine bank! in t"e applicant6! countr'? e con!ider willinge!! to full' !"are t"eir tec"nolog'$ )nl' t"o!e a#ong t"e top 1G0 foreign bank! in t"e world or t"e top fi(e (G bank! in t"eir countr' of origin a! of t"e date of application !"all be allowed entr' in accordance wit" !ec$2 b and c "ereof$ Sec$ F 1apital re4uire#ent!/ a for locall' incorporated !ub!idiarie!/ #ini#u# capital re4uired !"all be e4ual to t"at pre!cribed b' t"e -onetar' Board for do#e!tic bank! of t"e !a#e categor'$ b 9or foreign bank branc"e!/ capital of %)3 L>SS t"an t"e 8$S$ +ollar e4ui(alent of 210 -illion pe!o! at t"e e0c"ange rate on t"e date of t"e effecti(it' of t"i! act$ 3"e foreign bank !"all be entitled to t"ree #ore branc"e! wit" per#anentl' a!!igned capital of t"e 8$S$ +ollar e4ui(alent of <G -illion 2e!o! per additional branc"$ Sec$ G/ Eead office guarantee/ =#entioned earlier Sec$ B/ >ntrant! under !ection 2/ 9oreign bank! !"all be allowed entr' under !ec$2 c. wit"in G 'ear! fro# t"e effecti(it' of t"e act$ +uring t"i! period. or notice !"all be a nece!!ar' part of t"e !er(ice! and !"all co#plete t"e !er(ice$ 3"e regi!tr' receipt of #ailing !"all be pri#a facie e(idence of t"e tran!#i!!ion of t"e !u##on!.ed to create a #ore co#petiti(e en(iron#ent and encourage greater foreign participation t"roug" increa!e in owner!"ip in do#e!tic bank! and t"e entr' of new foreign bank branc"e!$ Sec$ 2 -ode! of >ntr'/ a b' ac4uiring. all !uc" branc"e! !"all be treated a! 1 unit for t"e purpo!e of t"e GBL$ +$ Eead )ffice Guarantee Eead office !"all full' guarantee t"e pro#pt pa'#ent of all liabilitie! of it! 2"ilippine Branc" Re!ident! and citi. or notice$ 3"e -onetar' Board #a' re(oke t"e licen!e to tran!act bu!ine!! in t"e 2"ilippine! of an' foreign bank. or !"ould !uc" agent or "ead beco#e #entall' inco#petent or ot"erwi!e unable to accept t"e !er(ice w"ile e0erci!ing !uc" aut"orit'. proce!!. director!. pri(ilege.ation. re!pon!ibilitie!. or officer! of corporation! to eac" ot"er or to t"e corporation$ G$ Re(ocation of Licen!e of a 9oreign Bank Sec$< guideline! for appro(al$/ a !"all en!ure geograp"ic repre!entation and co#ple#entation? b con!ider !trategic trade and in(e!t#ent relation!"ip! between t"e 2"ilippine! and t"e countr' of incorporation of t"e foreign bank? c !tud' t"e de#on!trated capacit'. proce!!e!. proce!!. purc"a!ing or owning up to B0A of t"e (oting !tock of an e0i!ting bank? b b' in(e!ting in up to B0A of t"e (oting !tock of a new banking !ub!idiar' incorporated under t"e law! of t"e 2"ilippine!? or c b' e!tabli!"ing branc"e! wit" full banking aut"orit'& pro(ided. an' foreign bank licen!ed to do bu!ine!! in t"e 2"ilippine! !"all be bound b' t"e pro(i!ion! of GBL.

part'/in/intere!t. of an' tru!t entit'. ad#ini!trator $ $ $ "owe(er.ed b' t"e client. for t"e account of t"e tru!tor or t"e beneficiar' of t"e tru!t. e0ecutor. an' of t"e depart#ent!. !uc" tran!action "a! been full' di!clo!ed and aut"ori. t"e Board #a' li#it or pro"ibit t"e di!tribution of net profit! b' !uc" bank and #a' re4uire t"at part or all of t"e profit! 1 1 F G be u!ed to increa!e t"e capital account! until t"e #ini#u# re4uire#ent "a! been #et$ A tru!t entit' !o long a! it !"all continue to be !ol(ent and co#pl' wit" law! or regulation! !"all "a(e t"e rig"t to collect t"e intere!t earned on !uc" !ecuritie! depo!ited wit" t"e BS2 and to e0c"ange t"e !ecuritie! for ot"er!$ All clai#! ari!ing out of t"e tru!t bu!ine!! of a tru!t entit' !"all "a(e priorit' o(er all ot"er clai#! a! regard! t"e ca!" or !ecuritie! depo!ited a! abo(e pro(ided$ *P$ Bond of 1ertain 2er!on! for t"e 9ait"ful 2erfor#ance of +utie! Bond Re4uire#ent! 1 Before an e0ecutor. tran!fer. propertie! and a!!et! of !uc" tru!t entit'$ 3"e account! !"all likewi!e be !eparate$ All #one'!.3"e cardinal principle co##on to all tru!t and ot"er fiduciar' relation!"ip! i! fidelity# 8nder t"e 1i(il 1ode on tru!t!& 3ru!tor/ a per!on w"o e!tabli!"e! a tru!t 3ru!tee/ one in w"o# confidence i! repo!ed a! regard! propert' for t"e benefit of anot"er per!on Beneficiar'/ t"e per!on for w"o!e benefit t"e tru!t "a! been created 3ru!t! #a' be e0pre!! or i#plied$ E9press trusts are created b' t"e intention of t"e tru!tor or of t"e partie!$ -mplied trusts are created b' operation of law$ >$ 2ower! of a 3ru!t >ntit' (in addition t"e general power! incident to corporation! act a! tru!tee on an' #ortgage or bond i!!ued b' an' in!tru#entalit' and to accept and e0ecute an' tru!t con!i!tent wit" law 2 act under t"e order or appoint#ent of an' court a! guardian. or lend #one' or propert' to. officer!. "e !"all. $ $ $ t"e court #a'. !tock"older!. guardian.ation A tru!t entit' before engaging in !uc" bu!ine!! #u!t co#pl' wit" t"e #ini#u# paid/in capital re4uire#ent deter#ined b' t"e -onetar' Board$ A 2 < . unle!! acco#panied b' a certificate of aut"orit' i!!ued b' t"e Bangko Sentral$ no article!V$ S"all be appro(ed b' t"e S>1 unle!! acco#panied b' a fa(orable reco##endation of t"e appropriate go(ern#ent agenc' to t"e effect t"at !uc" article! or a#end#ent i! in accordance wit" law$ B 3"e S>1 !"all not accept for filing t"e b'/law! or an' a#end#ent t"ereto$$$ unle!! acco#panied b' a certificate of t"e appropriate go(ern#ent agenc' to t"e effect t"at !uc" b'/law! or a#end#ent! are in accordance wit" law$ +$ -ini#u# 1apitali. a! t"e court #a' direct$ 2 8pon t"e application of an' e0ecutor. propertie! or !ecuritie! recei(ed b' !uc" bank a! well! a! in(e!t#ent of eac" tru!t !"all be kept p"'!icall' !eparate and di!tinct fro# t"e a!!et! of it! ot"er bu!ine!! and !"all be under t"e :oint cu!tod' of at lea!t 2 per!on! de!ignated b' t"e board of director!$ B$ *n(e!t#ent Li#itation! of a 3ru!t >ntit' 3"e S>1 !"all not regi!ter t"e article! of incorporation and b'/law! or an' a#end#ent t"ereto. file a bond in !uc" !u#. e(er' tru!t entit' !"all depo!it wit" BS2 a! !ecurit' for t"e fait"ful perfor#ance of it! tru!t dutie!. director!. propertie! or !ecuritie! recei(ed b' an' tru!t entit' a! e0ecutor. a!!ign or lend #one' or propert' fro# one tru!t or fiduciar' account e0cept w"ere t"e in(e!t#ent i! allowed b' t"e -onetar' Board$ G$ +epo!it for t"e 9ait"ful 2erfor#ance of 3ru!t +utie! 1 Before tran!acting tru!t bu!ine!!. and ad#ini!tration of an' e!tate. or purc"a!e debt in!tru#ent! of.ed b' t"e tru!tor and t"e relation!"ip of t"e tru!tee and t"e ot"er part' in(ol(ed i! full' di!clo!ed to t"e tru!tor or beneficiar'$ Regi!tration of Article! of *ncorporation and B'/Law! of a 3ru!t >ntit' B$ 1$ P$ )peration! of 3ru!t >ntit' A$ Separation of 3ru!t Bu!ine!! fro# General Bu!ine!! 3"e tru!t bu!ine!! and all fund!. or in !ecuritie! underwritten b' t"e tru!tee or fiduciar' or a corporation in w"ic" t"e tru!tee own! at lea!t G0A of t"e !ub!cribed capital or (oting !tock F Sell. i!!ue! and profit! t"ereof? and B e!tabli!" and #anage co##on tru!t fund! 9$ 3ran!action! Re4uiring 2rior Aut"orit' A tru!tee or fiduciar' !"all not undertake !uc" tran!action!. purc"a!e or ac4uire propert' fro#. ad#ini!trator. officer! and !tock"older!? or to an' corporation w"ere t"e tru!tee own! at lea!t G0A of t"e !ub!cribed capital or (oting !tock in it! own rig"t and not a! tru!tee nor in a repre!entati(e capacit'? 2 purc"a!e or ac4uire propert' or debt in!tru#ent! fro# an' of t"e depart#ent!. officer!$ $ $ 000 (!a#e in W1 < in(e!t in e4uitie! of. or t"e related intere!t of !uc" director!.000$00 or !uc" "ig"er a#ount a! #a' be fi0ed b' t"e -onetar' Board 3"e -onetar' Board !"all re4uire e(er' tru!t entit' to increa!e t"e a#ount of it! ca!"M!ecuritie! on depo!it wit" BS2 w"ene(er nece!!ar' 3"e paid/in capital and !urplu! of !uc" entit' #u!t be at lea!t e4ual to t"e a#ount re4uired to be depo!ited wit" t"e BS2 in accordance wit" t"e abo(e pro(i!ion!$ S"ould t"e capital and !urplu! fall below !aid a#ount. and t"e rent!. beneficiar'. ad#ini!trator. court of co#petent :uri!diction or ot"er co#petent aut"orit'& lend. t"e court #a' re4uire t"e tru!t entit' to po!t a bond or ot"er !ecurit' for t"e protection of fund! or propert' confided to !uc" entit' A$ B$ 1onduct of tru!t bu!ine!!$ 3"e following !"all be ob!er(ed in t"e conduct of tru!t bu!ine!!& a b a tru!t entit' !"all ad#ini!ter t"e fund! or propert' under it! cu!tod' wit" t"e diligence t"at a prudent #an would e0erci!e in t"e conduct of an enterpri!e of a like c"aracter and wit" !i#ilar ai#!$ %o tru!t entit' !"all. tru!tee. real or per!onal. recei(er. director!. or !ell. or e#plo'ee! of t"e tru!t entit'. director!. order t"at t"e !ub:ect #atter of t"e tru!t or an' part t"ereof be depo!ited wit" a tru!t entit' < 8pon pre!entation of proof to t"e court t"at t"e !ub:ect #atter of t"e tru!t "a! been depo!ited. unle!! prior to it! e0ecution. unle!! t"e tran!action i! !pecificall' aut"ori. ca!" or !ecuritie! appro(ed b' t"e -onetar' Board in an a#ount of 2G00. relati(e! wit"in t"e fir!t degree of con!anguinit' or affinit'. a!!ign. upon order of t"e court. officer!. recei(er. tran!fer. ad#ini!trator $ $ $ !"all be kept S>2ARA3> and +*S3*%13 fro# t"e general bu!ine!! including all ot"er fund!. !tock"older! or e#plo'ee! of t"e tru!tee or fiduciar' or relati(e! wit"in t"e 1 !t degree of con!anguinit' or affinit'. #anage#ent. t"e court #a' order t"at t"e bond gi(en be reduced to !uc" !u#! a! it #a' dee# proper$ F 3"e reduced bond !"all be !ufficient to !ecure ade4uatel' t"e proper ad#ini!tration and care of an' propert' re#aining under t"e control of !uc" per!on! and t"e proper accounting for !uc" propert'$ >0e#ption of 3ru!t >ntit' fro# t"e Bond Re4uire#ent %o bond or ot"er !ecurit' !"all be re4uired b' t"e court fro# a tru!t entit' a! court appointed tru!tee. tru!tee or depo!itar' of t"e e!tate of an' #inor or ot"er inco#petent per!on. !ell tran!fer or a!!ign #one' or propert' to an' of t"e depart#ent!. and a! recei(er and depo!itar' of an' #one'! and of propertie! broug"t into court b' partie! < act! a! t"e e0ecutor of an' will w"en it i! na#ed t"e e0ecutor t"ereof F act! a! ad#ini!trator of t"e e!tate of an' decea!ed per!on G accept and e0ecute an' tru!t for t"e "olding. depo!itar' ($ $ $ appointed b' t"e court enter! upon t"e e0ecution of "i! dutie!. after notice and "earing.

w"ic" !"all be a bod' corporate (Sec$ 2. Creatio! of t e BSP: )a!dated $y Sec. #a' t"ereafter deter#ine 1$ *$ -one' of Go(ern#ent Bank! #a' not recei(e or "old a! tru!tee. under t"e following circu#!tance!& Suc" a! !"all be #ortgaged to it in good fait" b' wa' of !ecurit' for debt!? 2 Suc" a! !"all be con(e'ed to it in !ati!faction of debt! pre(iou!l' contracted in t"e cour!e of it! dealing!? or < Suc" a! it! !"all purc"a!e at !ale! under :udg#ent!. c"attel #ort$ *!!ued b' t"e tru!tee F Loan! full' !ecured b' real e!tate or c"attel! in accordance wit" pertinent law! Re4uired !pecific directi(e!& 1 3"e tran!action to be entered into 2 3"e borrower6! na#e < A#ount in(ol(ed F 1ollateral !ecuritie!. agent. and con!idering it! uni4ue function! and re!pon!ibilitie!. t"e fund! and ot"er a!!et! ac4uired b' a tru!t entit' !"all be li#ited to loan! or in(e!t#ent! a! #a' be pre!cribed b' law. t"e -onetar' Board or an' court of co#petent :uri!diction$ A!!et! recei(ed in tru!t or in ot"er fiduciar' capacit' !"all be ad#ini!tered in accordance wit" t"e ter#! of t"e in!tru#ent creating t"e tru!t$ Loan! and in(e!t#ent! of t"e fund !"all be li#ited to& 1 >(idence! of indebtedne!! of t"e 2"il!$ And of t"e BS2 and ot"er e(idence! of indebtedne!! or obligation! t"e !er(icing and repa'#ent of w"ic" are full' guaranteed b' t"e Republic 2 Loan! full' guaranteed b' t"e Republic a! to t"e pa'#ent of t"e principal and intere!t < Loan! full' !ecured b' a "old/out on. agencie! and corre!pondent! in !uc" ot"er place! a! t"e proper conduct of it! bu!ine!! #a' re4uire$(Sec$ F. Re#(o!#i$ility a!d Pri)ary O$. if an'$ Real >!tate Ac4uired b' a 3ru!t >ntit' Suc" real e!tate !"all be go(erned b' t"e pro(i!ion! of GBL. full' !ub!cribed b' t"e Go(ern#ent of t"e 2"ilippine!$ 3en Billion of w"ic" !"all be full' paid for b' t"e Go(ern#ent upon t"e effecti(it' of t"i! Act and t"e balance to be paid for wit"in a period of two (2 'ear! fro# t"e effecti(it' of t"i! Act in !uc" #anner and for# a! t"e Go(ern#ent. a!!ign#ent or pledge of depo!it! #aintained eit"er wit" t"e bank proper or ot"er bank!. 2R)P*+>+ t"at go(ern#ent/owned bank! #a' recei(e or "old a! tru!tee t"e following& 1 2 9und! of LG8S w"ic" are e0pected to be a(ailable for in(e!t#ent purpo!e! for a relati(el' long period of ti#e 9und! of go(ern#ent and go(ern#ent and go(ern#ent entitie! w"ic" are aut"ori. %1BA $ C. 5= Art. 2R)P*+>+ t"at t"e bank continue to "old t"e propert' for it! own u!e !ub:ect to t"e ff li#itation!& 1 3"e total in(e!t#ent in !uc" real e!tate and i#pro(e#ent! !"all not e0ceed G0A of co#bined capital acct! 2 3"e e4uit' in(e!t#ent of a bank in anot"er corporation !"all be con!idered a! part of t"e total in(e!t#ent in real e!tate *n(e!t#ent of %on/tru!t 9und! V!"all be go(erned b' GBL and ot"er applicable law! 1 >$ Sanction! and 2enaltie! 3ru!t entit' or an' of it! officer! found to "a(e willfull' (iolated t"e pro(i!ion! of GBL !"all be !ub:ect to !anction! and penaltie! >0e#ption of 3ru!t A!!et! fro# 1lai#! %o a!!et! "eld b' a tru!t entit' in it! capacit' a! tru!tee !"all be !ub:ect to an' clai#! ot"er t"an t"o!e of t"e partie! intere!ted in t"e !pecific tru!t!$ 2ropert' "eld b' t"e in!ol(ent debtor a! tru!tee !"all be e0cluded fro# t"e in!ol(enc' proceeding!$ >!tabli!"#ent of Branc"e! of a 3ru!t >ntit' )rdinar' bu!ine!! /O !"all be tran!acted at t"e place of bu!ine!! !pecified in t"e article! of incorporation 3ru!t entit' !"all be re!pon!ible for all bu!ine!! conducted in !uc" branc"e! a! t"oug" !uc" bu!ine!! "ad all been conducted in t"e "ead office$ A.8nle!! ot"erwi!e directed b' t"e in!tru#ent creating t"e tru!t. but #a' #aintain branc"e!. %1BA $ E$ Ad(erti!e#ent of Ser(ice! 3ru!t entitie! !"all ad(erti!e t"eir !er(ice! in a dignified #anner and enter !uc" bu!ine!! onl' w"en de#and for !uc" !er(ice i! e(ident. decree!. t"e central #onetar' aut"orit' e!tabli!"ed under t"i! Act. ad#ini!trator. w"ile being a go(ern#ent/owned corporation.ecti/e of t e BSP • CHAPTER B I T e Ba!&"o Se!tral !& Pili(i!a# 1$ 2$ <$ +$ I. BSP Creatio!1 re#(o!#i$ilitie# a!d cor(orate (o*er# of t e to pro(ide polic' direction! in t"e area! of #one'. #ortgage! or tru!t deed! "eld b' it and !uc" a! it !"all purc"a!e to !ecure debt! due it$ An' realt' !"all be di!po!ed of b' t"e bank wit"in a period of G 'ear! or a! #a' be pre!cribed b' t"e -onetar' Board. w"en !peciall' e4uipped to render !uc" !er(ice and upon full appreciation of t"e re!pon!ibilitie! in(ol(ed$ 1apital Re4uire#ent!& Fifty Billio! Pe#o#. banking.ed b' !pecial law! to be placed in tru!t$ 2rincipal 2lace of Bu!ine!!& -etro -anila. !"all en:o' fi!cal and ad#ini!trati(e autono#'$ 9$ G$ B. or of #ortgage. Declared Policy of t e State 3"e State !"all #aintain a central #onetar' aut"orit' t"at !"all function and operate a! an independent and accountable bod' corporate in t"e di!c"arge of it! #andated re!pon!ibilitie! concerning #one'. 451 KDCB Co!#it%tio! BS2 / an independent central #onetar' aut"orit'. $ $ $ an' fund or #one' fro# t"e Go(ern#ent and it! entitie!. and credit to !uper(i!e o(er t"e operation! of bank! e0erci!e !uc" regulator' power! a! pro(ided in t"i! Act and ot"er pertinent law! o(er t"e a$ operation! of finance co#panie! and non/bank financial in!titution! perfor#ing 4ua!i/banking function!? and . banking and credit$ *n line wit" t"i! polic'. t"roug" t"e Secretar' of 9inance and Secretar' of Budget and -anage#ent. or of depo!it !ub!titute! of t"e bank.

li#itation! or ot"er for#! of regulation on t"e diff$ t'pe! of account! and practice! of bank! and 4ua!i/bank! w"ic" !"all.-. IAC2 ( 1onetar' board ma'* • 2re!cribe ratio!. it doe! not appear fro# t"e law t"at onl' t"e 1entral Bank or it! re!pondent official! can cau!e t"e pro!ecution of alleged (iolation! of banking law!$ Said (iolation! con!titute a public offen!e. w"ic" i! t"e pri#ar' ob:ecti(e of t"e Bangko Sentral$ to pro#ote and #aintain #onetar' !tabilit' and t"e con(ertibilit' of t"e pe!o$ Uuri!prudence& B%#%e&o /. A. BS2 and #e#ber! of t"e -onetar' Board !"ould not be i#pleaded a! partie! to a ca!e in co#pliance wit" !ection B. not a pro!ecution agenc' like t"e fi!calX! office$ Being an artificial per!on. !pecific dut' on t"e for#er to do t"e actual pro!ecution of t"e latter$ 3"e 1entral Bank i! a go(ern#ent corporation created principall' to ad#ini!ter t"e #onetar' and banking !'!te# of t"e Republic. confor# to t"e internationall' accepted !tandard!. and )t"er financial in!titution! w"ic" under !pecial law! are !ub:ect to BS2 !uper(i!ion$ *!!uance of Rule! of conduct 1onduct E0a#ination to deter#ine co#pliance wit" law! and regulation! O(er!eeing to a!certain t"at law! and regulation! are co#plied wit" Regular In(e!tigation (not oftener t"an once a 'ear *n4uiring into t"e Sol(enc' and li4uidit' of t"e in!titution >nforcing pro#pt Correcti(e action$ D. T e BSP # all ( a#e o%t a!d tra!#fer it# #%(er/i#i!& a!d re&%latory (o*er# o/er $%ildi!& a!d loa! a##ociatio!# to t e Ho)e I!#%ra!ce a!d G%ara!ty Cor(oratio! * ic # all a##%)e t e #a)e. under !uc" ter#! and condition! a! #a' be pre!cribed b' t"e -onetar' Board to protect t"e intere!t! of t"e Bangko Sentral$ Policy Directio!#@ Ratio#1 Ceili!&# a!d . in w"ole or in part. t"e pro!ecution of w"ic" i! a #atter of public intere!t and "ence. w"ic" #ake! #anda#u! again!t re!pondent! i#proper . and u!e a corporate #eal w"ic" !"all be :udiciall' noticed? enter into contract!? lea!e or own real and per!onal (ropert'. t"en "e "a! a plain. banking and credit !'!te# of t"e countr' and i! granted t"e power of !uper(i!ion and e0a#ination o(er bank! and non/bank financial in!titution! perfor#ing 4ua!i/banking function! of w"ic" !a(ing! and loan a!!ociation!VQ pro!ecution of t"o!e alleged (iolator!. 1B circular!M#e#oranda #u!t be i#ple#ented in a #anner t"at would not onl' !afeguard or "ar#oni. 9Pere6 /.ed to& SCP'SPA. but at t"e !a#e ti#e a(oid irreparable or gra(e pre:udice to participant! of !aid progra#$ 3"u!. bank!Mbanking in!titution! alread' fait"full' co#plied wit" t"e BS26! directi(e!. Cor(orate Po*er# of t e BSP BSP /. rule F< of t"e 1997 rule! of procedure$ C. to t"e e0tent fea!ible. ade4uate and !peed' re#ed' in t"e ordinar' cour!e of law. 1$ 2$ <$ F$ G$ B$ 7$ adopt. or a! are e!!ential to t"e proper conduct of !uc" operation!$ co#pro#i!e.F$ G$ b$ in!titution! perfor#ing !i#ilar function to #aintain price abilit' conduci(e to a balanced and !u!tainable growt" of t"e econo#'. alter. CA 3"e Supre#e 1ourt ruled t"at 5*t #u!t be re#e#bered t"at t"e 1entral Bank of t"e 2"ilippine! (now Bangko Sentral ng 2ilipina! .i)itatio!# ( Shall be provided b' the 0SP in the areas of* • • • -one' Banking 1redit Uuri!prudence& 3"e 1entral Bank of t"e 2"ilippine! i! dul' co##itted to #aintain t"e !tabilit' of t"e countr'X! foreign e0c"ange re!er(e po!ition$ 8nderl'ing t"i! co##it#ent. and to !ell or ot"erwi!e di!po!e of t"e !a#e? #ue and be !ued? do and perfor# an' and all t"ing! t"at #a' be nece!!ar' or proper to carr' out t"e (urpo!e! of t"i! Act$ ac4uire and "old !uc" a!!et! and incur !uc" liabilitie! in connection wit" it! operation! aut"ori. "owe(er. +o!etary Board2. but not li#ited to e0ceptional ca!e! or to enable a bank or 4ua!i/bank under re"abilitation or during a #erger or con!olidation to continue in bu!ine!! wit" !afet' to it! • Uuri!prudence& Po*er to (ro#ec%te: 1>%3RAL BA%I? %) 2)C>R 3) 2R)S>183> P*)LA3)RS )9 BA%I*%G LACS$ R Alt"oug" t"e 1entral Bank and it! re!pondent official! #a' "a(e t"e dut' under t"e 1entral Bank Act and t"e General Banking Act to cau!e t"e II. condone or relea!e. 9Ce!tral Ba!" of t e P ili((i!e# /. A%t ority of t e BSP . E#to((el B. an' clai# of or !ettled liabilit' to t"e Bangko Sentral. BS2 i! e!topped fro# enforcing circular! t"at would den' bank! or banking in!titution of t"eir rig"t!. "i#!elf could cau!e t"e filing of cri#inal co#plaint! again!t t"o!e allegedl' in(ol(ed in t"e ano#alou! loan!. if an'. including t"o!e of t"e Bank for *nternational Settle#ent!$ >0e#pt particular categorie! of tran!action! fro# !uc" ration!. i! t"e go(ern#entX! !trict and fait"ful ad"erence to ba!ic principle! of fairne!! and decenc' under t"e Bill of Rig"t!$ Eence.)SC/ • • • • • • = Scope* • • • Jua!i/bank! 3ru!t entitie!. S%(er/i#ory (o*er# of t e BSP ( )ncludes* +%. 'et Ce find not"ing in !aid law! t"at i#po!e! a clear. an'one R e(en pri(ate indi(idual! R can denounce !uc" (iolation! before t"e pro!ecuting aut"oritie!$ Since 2ere. i! t"e go(ern#ent agenc' c"arged wit" t"e re!pon!ibilit' of ad#ini!tering t"e #onetar'. t"roug" t"e -onetar' Board.e t"e# wit" go(ern#ent progra#! de!igned to uplift or pro#ote t"e countr'X! le(el of production and e#plo'#ent. regardle!! of t"e a#ount in(ol(ed. R%ral Ba!" of Sa! +i&%el Bangko Sentral i! "ereb' aut"ori. ceiling!.ed b' t"e pro(i!ion! of t"i! Act. ceiling! and li#itation!. t"e 1entral Bank i! li#ited to it! !tatutor' power! and t"e neare!t power to w"ic" pro!ecution of (iolator! of banking law! #a' be attributed i! it! power to !ue and be !ued$ But t"i! corporate power of litigation e(identl' refer! to ci(il ca!e! onl'$ -oreo(er.

of known (robit' and patrioti!#? 6. of un4ue!tionable integrit'? 5. +eeti!&#1 E%or%)1 Deci#io!# a!d Proceedi!&# of t e +o!etary Board 1. e#plo'ee. all deci!ion! of t"e -onetar' Board !"all re4uire t"e concurrence of at lea!t four (F #e#ber!$ 3. T e +o!etary Board / 3"e bod' t"roug" w"ic" t"e power! and function! of t"e BS2 are e0erci!ed$ 3. +i!4ualified fro# being a director. %atural born Citi.en! of t"e 2"ilippine!? 2. of good #oral c"aracter? 4. Di#3%alificatio!# of +o!etary Board +e)$er#: 9DDE'CSE2 1. C. and di(e!t "i#!elf of an' and all intere!t! in !uc" in!titution before a!!u#ption of office a! #e#ber of t"e -onetar' Board $ 3"e #e#ber! of t"e -onetar' Board co#ing fro# t"e pri(ate !ector !"all not "old an' ot"er public office or public e#plo'#ent during t"eir tenure? %o per!on !"all be a #e#ber of t"e -onetar' Board. 3"e -onetar' Board !"all #eet at lea!t once a week$ 3"e Board #a' be called to a #eeting b' t"e Go(ernor of t"e Bangko Sentral or b' two (2 ot"er #e#ber! of t"e Board$ 2. A. 5. wit" recogni. 3"e pre!ence of four (F #e#ber! !"all con!titute a 4uoru#& 2ro(ided. #a' be called b' it! go(ernor or 2 ot"er #e#ber! b$ F #e#ber! !"all con!titute 4uoru# pro(ided t"at in all ca!e! t"e go(ernor or de!ignated alternati(e !"all be a#ong t"e F c$ unle!! ot"erwi!e pro(ided in %1BA. wit" t"e e0ception of t"e Go(ernor w"o !"ould at lea!t be F0 'r! of age? 3. ALL +>1*S*)%S )9 3E> -onetar' Board !"all re4uire concurrence of at lea!t F #e#ber! D. depo!itor! and t"e general public$ III.ed co#petence in !ocial and econo#ic di!cipline!$ E. (ote of at lea!t G #e#ber! i! re4uired& . if "e "a! been connected directl' wit" t"e #ultilateral banking or financial in!titution? "a! a #ub!tantial intere!t in an' pri(ate bank in t"e 2"il!. law'er. officer. at lea!t <G 'ear! of age. all of w"o# !"all !er(e fullti#e$ 4. con!ultant. %ote& in t"e following ca!e!. E%alificatio!# of )e)$er# of t e )o!etary $oard: 9CA'CIPE2 1. Co)(o#itio! Se(en (7 #e#ber! appointed b' t"e 2re!ident of t"e 2"ilippine! for a ter# of B 'r! con!i!ted of& 1$ 2$ <$ A 1"air#an& Go(ernor of t"e BS2? A #e#ber of t"e cabinet to be de!ignated b' t"e 2re!ident of t"e 2"ilippine!? and 9i(e (G #e#ber! w"o !"all co#e fro# t"e pri(ate !ector. 0aca!cie# ' an' (acanc' in t"e #onetar' board created b' deat". +eeti!&#1 E%or%)1 Deci#io!# a!d Proceedi!&# i! +o!etary Board a$ #eet at lea!t once a week. Di!4ualification! i#po!ed b' RA %o$ B71<? 2. 3"at in all ca!e! t"e Go(ernor or "i! dul' de!ignated alternate !"all be a#ong t"e four (F $ 8nle!! ot"erwi!e pro(ided in t"i! Act. Gro%!d# for t e re)o/al of +o!etary Board +e)$er# 9SIGN2 ' 2he President ma' remove an' member of the 1onetar' 0oard for an' of the followin3 reasons* 1$ *f t"e #e#ber i! #ub!e4uentl' di!4ualified under t"e pro(i!ion! of Section 8 of t"i! Act? (t"i! i! a t'po error$ *t !"ould refer to Section 9 of t"e %1BA 2$ *f "e i! p"'!icall' or #entall' incapacitated t"at "e cannot properl' di!c"arge "i! dutie! and re!pon!ibilitie! and !uc" incapacit' "a! la!ted for #ore t"an !i0 (B #ont"!? or <$ *f t"e #e#ber i! &uilt' of act! or operation! w"ic" are of fraudulent or illegal c"aracter or w"ic" are #anife!tl' F. 4ua!i/bank or an' ot"er in!titution w"ic" i! !ub:ect to !uper(i!ion or e0a#ination b' t"e BS2(in w"ic" ca!e !uc" #e#ber !"all re!ign fro#. B. wit"in one 'ear prior to "i! appoint#ent? e#plo'ed in an' !uc" in!titution wit"in 2 'r! after t"e e0piration of "i! ter# e0cept w"en "e !er(e! a! an official repre!entati(e of t"e 2"ilippine Go(ern#ent to !uc" in!titution$ oppo!ed to t"e ai#! and intere!t! of t"e Bangko Sentral? or F$ *f t"e #e#ber !o longer po!!e!!e! t"e 4ualification! !pecified in Section 8 of t"i! Act$ F.creditor!. agent or !tock"older of an' bank. or re#o(al of an' #e#ber !"all be filled b' t"e appoint#ent of a new #e#ber to co#plete t"e une0pired period of t"e ter# of t"e #e#ber concerned$ 6. re!ignation.

1$ 2$ <$ F$ Sec$ B1. and ad#ini!tration of t"e Bangko Sentral.e t"e banko !entral to grant e#ergenc' loan! for purpo!e! o! a!!iting t"e bank wit" it! financial condition broug"t b' unfore!een e(ent! and a!certain t"at !uc" bank i! not in!ol(entand "a! a!!et! to !ecure ad(ance!$ 3"e loan ad(anced !"all not e0ceed G0A of total depo!it! and !"all be di!bur!ed in 2 or #ore trance! Board a!d # all retire fro) t e )eeti!& * e! t e )atter i# ta"e! %(. or proceeding! to w"ic" "e #a' be. Sco(e of A%t ority of t e +o!etary Board 9IDEA'I2 a i!!ue rule! and regulation! (t"e rule! and regulation! i!!ued !"all be reported to t"e 2re!ident and t"e 1ongre!! wit"in fifteen (1G da'! fro# t"e date of t"eir i!!uance b direct #anage#ent. operation!. !ub:ect to pertinent ci(il !er(ice law! %ote& 3"e Supre#e 1ourt in t"e ca!e 1entral Bank >#plo'ee! A!!ociation. an' #e#ber of t"e -onetar' Board wit" per!onal or pecuniar' intere!t in an' #atter in t"e agenda of t"e -onetar' Board& a) b) c) d) !"all di!clo!e "i! in intere!t to t"e Board? and !"all retire fro# t"e #eeting w"en t"e #atter i! taken up t"e deci!ion taken on t"e #atter !"all be #ade public t"e #inute! !"all reflect t"e di!clo!ure #ade and t"e retire#ent of t"e #e#ber concerned fro# t"e #eeting! d G. per!onall' or b' deput'. or e#plo'ee to repa' t"e a#ount ad(anced !"ould it ulti#atel' be deter#ined b' t"e -onetar' Board t"at "e c (ii G.1EA%G> )2>RA3*)%S (in order to ac"ie(e pri#ar' ob:ecti(e! of t"e Bangko Sentral or protect international re!er(e! of t"e BS in t"e i##inence of or during an e0c"ange cri!i! take con!tructi(e #ea!ure! to co#bat t"e cri!i! wit" t"e concurrence of G #e#ber!. 3E> -)%>3ARK B)AR+ #a' aut"ori. Per#o!al or (ec%!iary i!tere#t $y a!y )e)$er of t e +o!etary Board # all di#clo#e i# i!tere#t to t e Go(ernor 7 on it! reco##endation. tran!fer.ation of t"e Board. %1BA/ >->RG>%1K R>S3R*13*)%S )% >.e !uc" e0penditure! b' t"e Bangko Sentral – inde#nif' it! #e#ber! and ot"er official! of t"e Bangko Sentral again!t all co!t! and e0pen!e! rea!onabl' incurred b' !uc" per!on in connection wit" an' ci(il or cri#inal action. fi0 t"e re#uneration! and ot"er e#olu#ent!. w"ic" directl' t"reaten t"e #onetar' board. officer. or rea!!ign per!onnel of t"e Bangko Sentral and t"e!e per!onnel action! are dee#ed #ade in t"e intere!t of t"e !er(ice not di!ciplinar' – #a' delegate !uc" aut"orit' to t"e Go(ernor under !uc" guideline! a! it #a' deter#ine adopt an annual budget for and aut"ori. !"all e0a#ine t"e book! of e(er' banking in!titution once in e(er' 12 #ont"!.e it! per!onnel. e0pand t"e total (olu#e of it! loan!$ 3"e -B #a' al!o aut"ori. and re#o(er per!onnel of t"e Bangko Sentral. GBL/ 28BL*1A3*)% )9 9*%A%1*AL S3A3>->%3 (e(er' bank. Per#o!al or Pec%!iary I!tere#t 9DR'PR2' .A-*%A3*)% A%+ 9>>S (t"e !uper(i!ing and e0a#ining depart#ent "ead. #a' te#poraril' re!trict or !u!pend !ale! of e0c"ange? pro(ided t"at foreign currenc' depo!it! #ade under RA BF2B !"all be e0e#pted fro# t"i! re4uire#ent Sec$ 8F. !uit or proceeding upon receipt of an undertaking b' or on be"alf of t"e #e#ber. Salarie# of t e Go/er!or a!d )e)$er# of t e +o!etary Board SHA. or i!. *nc$ ($ Bangko Sentral ng 2ilipina! and . %1BA/ >. unle!! "e i! finall' ad:udged in !uc" action or proceeding to be liable for negligence or #i!conduct (i in t"e e(ent of a !ettle#ent or co#pro#i!e.e Banko Sentral to grant e0traordinar' loan! or ad(ance! to banking in!titution! !ecured b' a!!et! pro(ided t"at debtor in!titution !"all not e0cept upon prior aut"ori. and at !uc" ot"er ti#e! a! #at be pre!cribed b' t"e #onetar' board b' an affir#ati(e (ote of G #e#ber! pro(ided t"at t"ere !"all be an inter(al of 12 #ont"! between annual e0a#ination Sec$ 17. De(%ty Go/er!or# )ay atte!d +eeti!&# of t e +o!etary Board *it ri& t to $e eard co#pen!ation and wage !tructure of e#plo'ee! w"o!e po!ition! fall under !alar' grade 19 and below !"all be in accordance wit" t"e rate! pre!cribed under RA %o$ B7G8 (1o#pen!ation and 2o!ition 1la!!ification Act of 1989 $ H. !uit or proceeding #a' be paid b' t"e Bangko Sentral in ad(ance of t"e final di!po!ition of !uc" action. can appoint. BE FIHED B? THE Pre#ide!t of t e P ili((i!e# at a #%) co))e!#%rate to t e i)(orta!ce a!d re#(o!#i$ility attac ed to t e (o#itio! (ii I. reorgani. and i!!ue !uc" rule! and regulation! a! it #a' dee# nece!!ar' or con(enient for t"i! purpo!e e!tabli!" "u#an re!ource !'!te# (!uc" !'!te# !"all ai# to e!tabli!" profe!!ionali!# and e0cellence at all le(el! of t"e Bangko Sentral in accordance wit" !ound principle! of #anage#ent (i a co#pen!ation !tructure ba!ed on :ob e(aluation !tudie! and wage !ur(e'! and !ub:ect to t"e Board6! appro(al !"all be in!tituted a! an integral co#ponent of t"e Bangko Sentral6! "u#an re!ource! de(elop#ent progra#$ e -onetra' Board !"all "a(e e0clu!i(e and final aut"orit' to pro#ote. !uit!. including !ub!idiarie! and affiliate! 000? t"e Bangko Sentral #a' pre!cribe t"e new!paper !"all be publi!"ed? t"e #onetar' board #a' al!o allow po!ting of t"e financial !tate#ent in public place! in lieu of publication? bank! !"all #ake a(ailable al!o in !etting t"e audited financial !tate#ent and rele(ant infor#ation t"at will infor# t"e public of t"e true financial condition of t"e bank? and in period! of national or local e#ergenc'. #ade a part' b' rea!on of t"e perfor#ance of "i! function! or dutie!. %1BA/ >->RG>%1K L)A%S A%+ A+PA%1>S (*% 2>R*)+S )9 L)1AL A%+ %A3*)%AL >->RG>%1K )R *--*%>%3 9*%A%1*AL 2A%*1 CE*1E +*R>13LK 3ER>A3>% BA%I*%G S3AB*L*3K. inde#nification !"all be pro(ided onl' in connection wit" !uc" #atter! co(ered b' t"e !ettle#ent a! to w"ic" t"e Bangko Sentral i! ad(i!ed b' e0ternal coun!el t"at t"e per!on to be inde#nified did not co##it an' negligence or #i!conduct$ 3"e co!t! and e0pen!e! incurred in defending t"e afore#entioned action. *n addition to t"e re4uire#ent! of RA %o$ B71<. 4ua!i/bank or tru!t entit' !"all publi!" a !tate#ent of it! financial condition!.. a!!ign. b' a (ote of at lea!t G #e#ber! #a' allow t"e bank to defer financial condition re4uired t"erein Sec$ 28. T i# i# i! order to %( old t e ti)e' o!ored (ri!ci(le of (%$lic office a# a (%$lic tr%#t.

or i! wit" prior aut"ori. officer!. t"e Go( of t"e BS N concurrence of 2 ot"er -onetar' Board #e#ber! @ decide on an' #atter or take an' action wit"in t"e aut"orit' of t"e Board$ 3"e Go( !"all !ub#it a report to t"e 2re! and 1ongre!! wit"in 72 "our! after t"e action "a! been taken$ At t"e !oone!t po!!ible ti#e. w"ic" !"all be final and e0ecutor' until re(er!ed or #odified b' t"e -B. t"e Go( !"all call a #eeting of t"e -B to !ub#it "i! action for ratification$ Li#itation! on )ut!ide *ntere!t! of t"e Go( and t"e 9ull/ti#e -e#ber! of t"e Board - B$ 2ower! of t"e Go(ernor a! Repre!entati(e of -onetar' Board and BS2 1$ repre!ent t"e -B and BS2 in all dealing! wit" ot"er office!. in an' legal proceeding!. Re#(o!#i$ility of +e)$er# of t e +o!etary Board1 Official1 E-a)i!er#1 a!d E)(loyee# of t e Ba!&"o Se!tral A. agencie! and in!tru#entalitie! of t"e Go(6t and all ot"er per!on! or entitie!. corre!pondence and ot"er docu#ent! repre!ent t"e BS. a! aut"ori. public or pri(ate. per!onall' or t"roug" coun!el. or an' infor#ation on t"e di!cu!!ion or re!olution of t"e -onetar' Board or about t"e confidential operation! of t"e Bangko Sentral. on #atter! regarding applicationMenforce#ent of law! pertaining to in!titution! !uper(i!ed b' t"e BS2 and law! pertaining to 4ua!i bank! e0erci!e !uc" power! a! #a' be (e!ted in "i# b' t"e -B$ and it i! !ufficient to call for a #eeting of t"e -B. Go(. or ruling!. deci!ion!. re#unerated or ad "ore# >. foreign or international? li#it t"eir profe!!ional acti(itie! to t"o!e pertaining directl' to t"eir po!ition! wit" t"e BS$ GR& accept no ot"er e#plo'#ent.t"e >0ecuti(e Secretar' declared t"e foregoing pro(i!ion Sparticularl' ite# (c uncon!titutionalT uncon!titutional for being (iolati(e of t"e e4ual protection clau!e$ (!ee page <0F =an' data or infor#ation re4uired to be !ub#itted to t"e 2re!ident andMor t"e congre!!. or to be publi!"ed under t"e pro(i!ion! of t"e %1BA !"all not be con!idered confidential 2$ <$ F$ !ign contract! entered into b' t"e BS2. balance !"eet!. T e Go/er!or a!d De(%ty Go/er!or# of t e Ba!&"o Se!tral S>1 18. Po*er# a!d D%tie# of t e Go/er!or 9CEO PEDARE2 >#ergencie! Go(ernor c"ief e0ec officer of t"e BS2 principal repre!entati(e of t"e -B and t"e BS2 *n ca!e of e#ergencie! (i (ii if an'one of t"e# willfull' (iolate %1BA or w"o i! guilt' of negligence. or act! of #alfea!ance or #i!fea!ance of fail! to e0erci!e e0traordinar' diligence in t"e perfor#ance of "i! dutie! !"all be "eld liable for an' lo!! or in:ur' !uffered b' t"e Bangko Sentral or ot"er banking in!titution! a! a re!ult of !uc"& a) (iolation b) negligence c) abu!e d) #alfea!ance e) #i!fea!ance? or f) failure to e0erci!e e0traordinar' diligence (P%A--9e !i#ilar re!pon!ibilit' !"all appl' to #e#ber!. and e#plo'ee! of t"e Bangko Sentral for& (a t"e di!clo!ure of an' infor#ation of a confidential nature. t"e bangko Sentral of t"ird partie! 2ower! and +utie!& 1$ 2$ <$ F$ G$ prepare t"e agenda for t"e #eeting! of t"e -B and !ub#it policie! and #ea!ure! w"ic" "e belie(e! are nece!!ar' to carr' out t"e purpo!e! and pro(i!ion! of t"e %B1A? e0ecute and ad#ini!ter t"e policie! and #ea!ure! appro(ed b' t"e -B? direct and !uper(i!e t"e operation! and internal ad#ini!tration of t"e Bangko Sentral? appoint and fi0 t"e re#uneration! and ot"er e#olu#ent! of per!onnel below t"e rank of a depart#ent "ead in accordance wit" t"e po!ition and co#pen!ation plan! appro(ed b' t"e -B render opinion!. note! and !ecuritie! i!!ued b' t"e BS2.ed b' t"e -B. do#e!tic.ed legal !tudie! delegate "i! power to repre!ent t"e BS a! pro(ided in 1/< to ot"er officer! upon "i! own re!pon!ibilit' I0.ation of t"e -onetar' Board or t"e Go(ernor? or (b t"e u!e of !uc" infor#ation for per!onal gain ir t"e detri#ent of t"e Go(ern#ent. %1BA 7 A per#anent negotiator #a' take t"e place of t"e Go(ernor in preli#inar' di!cu!!ion! wit" an' #ultilateral banking or financial in!titution! on an' negotiation! for t"e Go(6t wit"in or out!ide t"e 2"ilippine! in order to pre!er(e t"e integrit' and pre!tige of "i! office$ K. profit and lo!! !tate#ent!. unle!! t"e di!clo!ure i! in connection wit" t"e perfor#ance of official function! wit" t"e Bangko Sentral. action or !peciali. public or pri(ate. abu!e. all report!.2& po!ition! in o >lee#o!'nar' o 1i(ic org o Religiou! org o 1ultural org o +e!ignation of t"e 2re!. o Repre!entation of a fullti#e #e#ber of t"e intere!t of t"e Go(t or ot"er go(t agencie! in #atter! connected wit" t"e econo#'Mfinancial !'!te# of t"e countr' .

banking in!titution! and 4ua!i/bank!. in writing.ed b' law. Co!tracti!& .ed e0clu!i(el' for e#plo'ee! of t"e Bangko Sentral. contract! a loan or an' for# of financial acco##odation fro#& (1 "i! bank? or (2 fro# a bankR w"ic" i! a #%$#idiary of a bank "olding co#pan' of w"ic" bot" "i! bank and t"e lending bank are !ub!idiarie!. t"e 1ongre!! or an' go(ern#ent office or agenc' aut"ori. docu#ent!. e0cept non/!tock !a(ing! and loan a!!ociation! and pro(ident fund! organi.ed b' eit"er of t"e#.+eput' Go(ernor! not #ore t"an t"ree +83K& a!!igned b' t"e Go( and board +>283K G)P 7 de!ignated b' t"e Go( !"all take t"e place of t"e latter in "i! dutie! and re!pon!ibilitie! w"en t"e !a#e i! ab!ent depart#ent "ead!Me0a#iner! "a(e t"e following !uper(i!or' aut"orit' o ad#ini!tration of oat"! to an' director. and e0cept a! ot"erwi!e pro(ided in t"e %1BA? directl' or indirectl' re3%e#ti!& or recei/i!& a!y &ift 000 for "i#!elf or for anot"er. officer. or e#plo'ee of an' in!titution under t"eir re!pecti(e !uper(i!ion or !ub:ect to t"eir e0a#ination o co#pel t"e pre!entation of all book!. - S1)2> and A83E)R*3K )9 BS 3) )B3A*% +A3A A%+ *%9) (F - re4ue!t fro# G)*MG)11 data needed for t"e proper di!c"arge of t"eir office !ubpoena production of !aid book! in ca!e of non/co#pliance data on fir#! and ot"er bank! are e0clu!i(el' for t"e pur(iew of t"e BS2 e0p a! per court order or condition! pre!cribed b' t"e -B Scope and Super(i!ion and >0a#ination b' t"e Bangko Sentral # all $e re3%ired $y t e le!di!& $a!" to *ai/e t e #ecrecy of i# de(o#it# of w"ate(er nature in all bank! in t"e 2"ilippine!$ - BS "a! !uper(i!ion o(er and conduct periodic or !pecial e0a#ination! of. e0cept under order! of t"e court. to recei(e !uc" infor#ation? and $orro*i!& fro# an' in!titution !ub:ect to !uper(i!ion or e0a#ination b' t"e Bangko Sentral !"all be pro"ibited %!le## said borrowin& are adequately secured" fully disclosed to the 7onetary )oard" and shall be subject to such further rules and re&ulations as the 7onetary )oard may prescribe: /ro1ided" howe1er" That personnel of the super1isin& and e9aminin& departments are prohibited from borrowin& from a bank under their supervision or e amination +sec. credit and e0c"ange policie!$ conduct econo#ic re!earc" to guide t"e -B in it! for#ulation and i#ple#entation of policie! 0I. including t"eir !ub!idiarie! and affiliate! engaged in allied acti(itie!$ o S8BS*+*ARK 7 #ore t"an G0A of t"e (oting !tock i! owned b' t"e bank or 4ua!i/bank o A99*L*A3> 7 G0 A or le!! i! owned b' bank or 4ua!i/ bank (ii An' infor#ation obtained fro# an e0a#ination of "i! depo!it! !"all be "eld !trictl' confidential and #a' be u!ed b' t"e e0a#iner! onl' in connection wit" t"eir !uper(i!or' and e0a#ination re!pon!ibilit' or b' t"e BS2 in an appropriate legal action it "a! initiated in(ol(ing t"e depo!it account$ being an officer 000. infor#ation relating to t"e condition or bu!ine!! of an' in!titution$ 3"i! pro"ibition !"all not be "eld to appl' in t"e gi(ing of infor#ation to t"e -onetar' Board or t"e go(ernor of t"e Bangko Sentral. Pro i$itio! A&ai!#t Per#o!!el of t e Ba!&"o Se!tral *n addition to t"e (ro i$itio!# found in RA <019 and B71<. in e0ce!! of fi(e percent (GA of t"e capital and !urplu! of t"e bank. banking. or in t"e #a0i#u# a#ount per#itted b' law. w"ic"e(er i! lower. O(eratio!# of t e Ba!&"o Se!tral Re!training )rder or *n:unction re!training order! can onl' be i!!ued w"en t"ere i! con(incing proof t"at t"e action of t"e BS i! plainl' arbitrar' and #ade in bad fait" and t"e petitioner or plaintiff file! wit" t"e clerk or :udge of t"e court in w"ic" t"e action i! pending a bond e0ecuted in fa(or of t"e BS. of an' in!titution !ub:ect to !uper(i!ion or e0a#ination b' t"e Bangko Sentral. NC06/ 0II E-a)i!atio! of Ba"i!& I!#tit%tio!# . or under !uc" condition! a! #a' be pre!cribed b' t"e -onetar' Board. officer or !tock"older w"o toget"er wit" "i! related intere!t. or to an' per!on aut"ori. or in w"ic" a co!trolli!& (ro(ortio! of t e # are# i! owned b' t"e !a#e intere!t t"at own! a controlling proportion of t"e !"are! of "i! bank. in an a#t fi0ed b' t"e 1ourt$ Re!earc" and Stati!tic! of t"e BS (2 BS prepare data o balance of 2"ilippine pa'#ent! o !tati!tic! on t"e #ont"l' #o(e#ent of t"e #onetar' aggregate! o price! and ot"er !tati!tical !erie! and econo#ic !tudie! u!eful for t"e for#ulation and anal'!i! of #onetar'. directl' or indirectl'. per!onnel of t"e Bangko Sentral are pro"ibited fro# (P'ORRB2 (1 0. paper! or record! nece!!ar' in t"eir :udg#ent B.oa!# (i An' director.45. fro# an' in!titution !ub:ect to !uper(i!ion or e0a#ination b' t"e Bangko Sentral? re/eali!& in an' #anner. Director1 Officer or Stoc" older1 A!d Related I!tere#t (< A.

of t"e BS2 a! it dee#! con(enient for t"e proper and efficient conduct of t"e operation! and t"e acco#pli!"#ent of t"e ob:ecti(e! of t"e BS2$ C"at& Annual Report on t"e 1ondition of t"e BS2 N a re(iew on t"e policie! and #ea!ure! adopted b' t"e -onetar' Board during t"e pa!t 'ear N anal'!i! of econo#ic and financial circu#!tance! wMc ga(e ri!e to !aid policie! 9or w"o#& 2re!ident and 1ongre!! (!ec <8 %1BA 3"e function! and dutie! of !uc" operating depart#ent! and ot"er office! !"all be deter#ined b' t"e #onetar' board$ S"all al!o include !tate#ent of t"e financial condition of t"e BS2 and !tati!tical appendi0 wMc !"all pre!ent AS A -*%*-8. not later t"an 72 "r! after t"e' are taken.OSSES1 AND SPECIA.9re4uenc' of >0a#ination once e(er' 12#ont"! and a! appro(ed b' t"e -onetar' Board wit" t"e affir#ati(e (ote of G per!on! done b' t"e !uper(i!ingMe0a#ining board • 3"e -onetar' board !"all publi!" and !ub#it t"e ff report! to t"e 2re!ident and 1ongre!!& An anal'!i! of econo#ic and financial de(elop#ent! N condition of net international re!er(e! and #onetar' aggregate! (not later t"an 90 da'! after t"e end of eac" 4uarter 3"e preceding 'ear6! budget and profit and lo!! !tate#ent of t"e BS2 !"owing in rea!onable detail t"e re!ult of it! operation! (wMin 90 da'! after t"e end of 'ear Re(iew of t"e !tate of financial !'!te# (120 da'! after end of eac" !e# A! !oon a! practicable. t"e BS2 !"all deter#ine it! net profit! or lo!!e!$ *n t"e calculation of net profit!. re#edial #ea!ure! in re!pon!e to !uc" abnor#al #o(e#ent! F$ -ont"l' indice! of con!u#er price! and of i#port and e0port price! -ont"l' #o(e#ent in !u##ar' for#. in accordance wit" it! aut"orit' under t"e %1BA. ACCOUNTS A$ 9i!cal 'ear @ !"all begin on Uan 1 and end on +ec <1 of eac" 'ear (S>1 F2 %1BA 1o#putation of profit! and lo!!e! Cit"in t"e fir!t <0 da'! ff t"e end of eac" 'ear.t"e ff data& B$ B. an annual fee in an a#ount e4ual to a percentage a! #a' be pre!cribed b' t"e -B of it! a(erage total a!!et! during t"e preceding 'ear a! !"own on it! end/#ont" balance !"eet! after deducting 1)E and a#ount! due fro# bank!$ 8$ - - 3"e BS2 SEALL 28BL*SE A%)3E>R P>RS*)% )9 3E> A%%8AL R>2)R3 *% 3>R-S 8%+>RS3A%+ABL> 3) 3E> LAK-A%$ 9A*L8R> 3) 1)-2LK wit" t"e reportorial re4uire#ent! pur!uant to t"i! article wMo :u!tifiable rea!on a! #a' be deter#ined b' t"e #onetar' board !"all cau!e t"e wit""olding of t"e !alar' of t"e per!onnel concerned until t"e re4uire#ent! are co#plied wit" (!ec F0 D. O(erati!& de(art)e!t# of t e BSP C. including a public infor#ation office. Si&!at%re# o! #tate)e!t# Balance !"eet! and ot"er financial !tate#ent! of t"e BS2 !"all be !igned b' officer! re!pon!ible for t"eir preparation. of e0port! and i#port! b' (olu#e and (alue -ont"l' #o(e#ent of t"e account! of t"e BS2 and ot"er bank! 2rincipal data on go(ern#ent receipt! and e0penditure! and on t"e !tatu! of t"e public debt bot" do#e!tic and foreign 3e0t! of #a:or legal and ad#in #ea!ure! adopted b' t"e go(ern#ent and t"e #onetar' board during t"e 'ear wMc relate to t"e function! or operation! of BS2 or of t"e financial !'!te# G$ B$ Affording )pportunit' to >0a#ine Sec 28 of %B1A - 7$ Ser(ice 9ee! / Bank or 4ua!i/bank! !"all pa' t"e BS wit"in t"e fir!t <0 da'! of eac" 'ear. it !"all #ake ade4uate allowance or e!tabli!" ade4uate re!er(e! for bad and doubtful account! (!ec F< 1$ +i!tribution of net profit! wMin t"e fir!t B0 da'! ff t"e end of eac" fi!cal 'ear. and. in accordance wit" t"e ff rule& 0III '' AD+INISTRATION A. abnor#al #o(e#ent! in #onetar' aggregate! and t"e general price le(el. A!!%al re(ort of t e BSP C"en& before t"e end of -arc" of eac" 'ear 3"e #onetar' board !"all. deter#ine and pro(ide for !uc" operating depart#ent! and ot"er office!. Re3%ired re(ort# a!d (%$licatio!# of t e BSP 1$ • 2ubli!" a general balance !"eet !"owing t"e (olu#e and co#po!ition of it! a!!et! and liabilitie! a! of t"e la!t working da' of t"e #ont" wMin B0 da'! after t"e end of eac" #ont" (e0cept for +ece#ber @ to be !ub#itted wMin 90 da'! after t"e end t"ereof $ -ont"l' #o(e#ent of #onetar' aggregate! and t"eir co#ponent! -ont"l' #o(e#ent of purc"a!e! and !ale! of foreign e0c"ange and of t"e international re!er(e! of BS2 3"e balance of pa'#ent! of t"e 2"il! 2$ <$ . b' t"e go(ernor. and b' t"e auditor of t"e Bangko Sentral (!ec F1 %1BA IH I PROFITS1 . t"e #onetar' board !"all deter#ine and carr' out t"e di!tribution of t"e net profit!.

an' refu!al to per#it e0a#ination into t"e affair! of t"e in!titution? d. an' co##i!!ion of irregularitie!? andMor &. a! a con!e4uence of !uc" re(aluation!. and to appoint and fi0 !alarie! and nu#ber of per!onnel to a!!i!t !aid repre!entati(e in "i! work$ 3"e !alarie! and ot"er e#olu#ent! !"all be paid b' t"e 1o##i!!ion$ 3"e auditor of t"e Bangko Sentral and per!onnel under "i# #a' be re#o(ed onl' b' t"e 1"air#an of t"e 1o##i!!ion$ 3"e repre!entati(e of t"e 1"air#an of t"e 1o##i!!ion #u!t be a certified public accountant wit" at lea!t ten (10 'ear! e0perience a! !uc"$ %o relati(e of an' #e#ber of t"e -onetar' Board or t"e 1"air#an of t"e 1o##i!!ion wit"in t"e !i0t" degree of con!anguinit' or affinit' !"all be appointed !uc" repre!entati(e$ H. said director or officer shall be reinstated in his position* Provided.000 / 2200. . willful dela' in t"e !ub#i!!ion of report! or publication! t"ereof a! re4uired b' law.e1aluation /rofits and 2osses# / 2rofit! or lo!!e! ari!ing fro# an' re(aluation of t"e Bangko SentralX! net a!!et! or liabilitie! in gold or foreign currencie! wit" re!pect to t"e 2"ilippine pe!o !"all not be included in t"e co#putation of t"e annual profit! and lo!!e! of t"e Bangko Sentral$ An' profit! or lo!!e! ari!ing in t"i! #anner !"all be off!et b' an' a#ount! w"ic". an' willful failure or refu!al to co#pl' wit". or (iolation of.e1aluation of -nternational . (1 Ad)i!i#trati/e Proceedi!&# C"et"er or not t"ere i! an ad#ini!trati(e proceeding. (The . Ad)i!i#trati/e 0iolatio!# a!d Pe!altie# /wit"out pre:udice to t"e cri#inal !anction! a. fi0 "i! !alar'. rule! and regulation!? c. are "ereb' repealed$ A#ount! out!tanding a! of t"e effecti(e date of t"i! Act ba!ed on t"e!e account! !"all continue to be for t"e account of t"e 1entral Bank and !"all be go(erned b' t"e tran!itor' pro(i!ion! of t"i! Act$ The . an' banking law or an' order.00 7 2200. 2he 1onetar' 0oard ma'. w"ic" i! i##ediatel' effecti(e upon !er(ice to t"e in!titution andMor t"e director! andMor officer!$ .eser1e account shall be neither credited nor debited for any purposes other than those specifically authori<ed in this section >$ Su!pen!e account! Sectio! :A. or an' order. w"ic" i! i##ediatel' effecti(e upon !er(ice to t"e in!titution andMor t"e director! andMor officer!. at t"e di!cretion of t"e court B. "e i! e#powered and aut"ori. in!truction or ruling b' t"e Go(ernor? or f. Pe!alty for t e *illf%l )a"i!& of a fal#e or )i#leadi!& #tate)e!t o! a )aterial fact a fine of 2100.000 7 2100. at t"e di!cretion of t"e court C.en account w"ic" !"all be na#ed YRe(aluation of *nternational Re!er(eY and t"e net balance of w"ic" !"all appear eit"er a#ong t"e liabilitie! or a#ong t"e a!!et! of t"e Bangko Sentral.-. re!pecti(el'.ation Ad:u!t#ent Account (>SAA . or b' i#pri!on#ent of 1 7 G 'ear!. t"e Board #a'.o G0A of t"e net profit! !"all be carried to !urplu! 3"e re#aining G0A !"all re(ert back to t"e %ational 3rea!ur'. t"e -onetar' Board #a' i!!ue a cea!e and de!i!t order fro# t"e indicated practice or (iolation.e1aluation of -nternational . whenever warranted b' circumstances. Pe!alty for ref%#al to )a"e re(ort# or (er)it e-a)i!atio! a fine of 2G0. a! a#ended. are owed b' t"e 2"ilippine! to an' international or regional intergo(ern#ental financial in!titution of w"ic" t"e 2"ilippine! i! a #e#ber or are owed b' t"e!e in!titution! to t"e 2"ilippine!$ An' re#aining profit or lo!! !"all be carried in a !pecial fro.000. $ppointment and /ersonnel# / 3"e 1"air#an of t"e 1o##i!!ion on Audit !"all act a! t"e e0 officio auditor of t"e Bangko Sentral and.ed to appoint a repre!entati(e w"o !"all be t"e auditor of t"e Bangko Sentral and. 9$ 3"e auditor Proceedi!&# %(o! a!d (e!alty for /iolatio! of NCBA a!d ot er $a!"i!& la*#1 r%le#1 re&%latio!#1 order# or i!#tr%ctio!# !"all unless otherwise pro1ided in N. take action under Sec <0 (Recei(er!"ip and Li4uidation of t"e %1BA$ 5.bank pendin3 an investi3ation* Provided. preventivel' suspend an' director or officer of a bank or quasi. the period of dela' shall not be counted in computin3 the period of suspension herein provided.000 or b' i#pri!on#ent of 2 7 10 'ear!. Ad)i!i#trati/e #a!ctio!# o! $a!"# a!d 3%a#i'$a!"# 9Ad)i!i#trati/e 0iolatio!#: CDR'F. or bot". an' willful #aking of a fal!e or #i!leading !tate#ent to t"e Board or t"e appropriate !uper(i!ing and e0a#ining depart#ent or it! e0a#iner!? e. wit"out pre:udice to t"e penaltie! pro(ided abo(e and t"e ad#ini!trati(e !anction! pro(ided in Sec <7 of %1BA. further. in!truction or regulation i!!ued b' t"e -onetar' Board. 7.)$ be puni!"ed b' a fine of 2G0. 2hat when the dela' in the disposition of the case is due to the fault.entral )ank shall continue to be for the account of the same entity and shall be &o1erned by the pro1isions of 'ection == of . ne3li3ence or petition of the director or officer.IB2 4. 2he above administrative sanctions need not be applied in the order of their severit'. 'uspense $ccounts# / Section! F< and F</A of Republic Act %o$ 2BG. or bot".epublic $ct No# >?:" as amended" until otherwise pro1ided for in accordance with the transitory pro1isions of this $ct# A. and #a' furt"er order t"at i##ediate action be taken to correct t"e condition! re!ulting fro# !uc" practice or (iolation. %esi3nation or termination from office shall not e empt such director or officer from administrative or criminal sanctions. e!cept a! ot"erwi!e pro(ided in t"e tran!itor' pro(i!ion! of t"e %1BA (!ec FF o +$ Re(aluation profit! and lo!!e! Sectio! :>. in accordance wit" law. depending on w"et"er t"e re(aluation! "a(e produced net profit! or net lo!!e!$ Sectio! :B. an' willful (iolation of it! c"arter or b'/law!? $. Pe!alty for 0iolatio! D. conducting bu!ine!! in an un!afe or un!ound #anner a! #a' be deter#ined b' t"e -onetar' Board Sec BB of t"e GBL pro(ide! . or b' i#pri!on#ent of not #ore t"an G 'ear!.eser1e (. creating t"e -onetar' Ad:u!t#ent Account (-AA and t"e >0c"ange Stabili. at t"e di!cretion of t"e court C"ene(er a bank or 4ua!i/bank per!i!t! in carr'ing on it! bu!ine!! in an unlawful or un!afe #anner. 4.! account as of the effecti1e date of this $ct of the . a! !uc".entral )ank $ct# -f the offender is a director or officer of a bank" quasi bank or trust entity" the 7onetary )oard may also suspend or remo1e such director or officer# -f the 1iolation is committed by a corporation" such corporation may be dissol1ed by quo warranto proceedin&s instituted by the 'olicitor +eneral# (Notes* $. or bot".nless otherwise pro1ided" the 1iolation of any of the pro1isions of the +)2 shall be subject to 'ections @=" @:" @? and @A of the New . 2hat should the case be not finall' decided b' the 0an3ko Sentral within a period of $4" da's after the date of suspension.000.

for an' failure to co#pl' wit" t"e re4uire#ent! of law. to i#po!e upon banking in!titution!. -onetar' Board regulation!. t"e order !"all be final$ 3"e Go(ernor i! aut"ori.000 a da' for eac" (iolation.(2 (< 3"e re!pondent! !"all be afforded an opportunit' to defend t"eir action in a "earing before t"e -onetar' Board or it! co##ittee c"aired b' an' -B #e#ber upon re4ue!t #ade b' t"e re!pondent! wit"in G da'! fro# t"eir receipt of t"e order$ *f no !uc" "earing i! re4ue!ted wit"in !aid period. at "i! di!cretion. etc$ fine! not in e0ce!! of 210.ed. #odified or lifted b' t"e -onetar' Board on appeal$ . t"e i#po!ition of w"ic" i! final and e0ecutor' until re(er!ed.

execute and administer the policies and measures approved by the MB. officer. appoint and fix the remunerations and other emoluments of personnel below the rank of a department head in accordance with the position and compensation plans approved by the MB render opinions. (see page 304) (ii) if anyone of them willfully violate NCBA or who is guilty of negligence. suit or proceeding upon receipt of an undertaking by or on behalf of the member. or f) failure to exercise extraordinary diligence (VNAMMFe) similar responsibility shall apply to members. on matters regarding application/enforcement of laws pertaining to institutions supervised by the BSP and laws pertaining to quasi banks exercise such powers as may be vested in him by the MB. Responsibility of Members of the Monetary Board. Examiners. 2.(ii) that the person to be indemnified did not commit any negligence or misconduct. or rulings. Powers and Duties of the Governor (CEO PEDARE) Governor chief exec officer of the BSP principal representative of the MB and the BSP Powers and Duties: 1. Powers of the Governor as Representative of Monetary Board and BSP . or (b) the use of such information for personal gain ir the detriment of the Government. or any information on the discussion or resolution of the Monetary Board or about the confidential operations of the Bangko Sentral. *any data or information required to be submitted to the President and/or the congress. and Employees of the Bangko Sentral NCBA shall not be considered confidential (i) Note: The Supreme Court in the case Central Bank Employees Association. officers. 4. Official. 3. suit or proceeding may be paid by the Bangko Sentral in advance of the final disposition of such action. 5. or employee to repay the amount advanced should it ultimately be determined by the Monetary Board that he K. prepare the agenda for the meetings of the MB and submit policies and measures which he believes are necessary to carry out the purposes and provisions of the NBCA. or to be published under the provisions of the 6. and employees of the Bangko Sentral for: (a) the disclosure of any information of a confidential nature. decisions. Bangko Sentral ng Pilipinas and the Executive Secretary declared the foregoing provision [particularly item (c) unconstitutio nal] unconstitutio nal for being violative of the equal protection clause. Inc. The Governor and Deputy Governors of the Bangko Sentral A. or acts of malfeasance or misfeasance of fails to exercise extraordinary diligence in the performance of his duties shall be held liable for any loss or injury suffered by the Bangko Sentral or other banking institutions as a result of such: a) violation b) negligence c) abuse d) malfeasance e) misfeasance. abuse. which shall be final and executory until reversed or modified by the MB. or is with prior authorization of the Monetary Board or the Governor. direct and supervise the operations and internal administration of the Bangko Sentral. the bangko Sentral of third parties IV. The costs and expenses incurred in defending the aforementioned action. unless the disclosure is in connection with the performance of official functions with the Bangko Sentral. v.

notes and securities issued by the BSP. Gov. represent the MB and BSP in all dealings with other offices. documents. conduct economic research to guide the MB in its formulation and implementation of policies Restraining Order or Injunction restraining orders can only be issued when there is convincing proof that the action of the BS 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 BS. foreign or international. personally or through counsel. - Limitations on Outside Interests of the Gov and the Fulltime Members of the Board SCOPE and AUTHORITY OF BS TO OBTAIN DATA AND INFO VI. GR: accept no other employment. action or specialized legal studies delegate his power to represent the BS as provided in 1-3 to other officers upon his own responsibility - 2. NCBA – A permanent negotiator may take the place of the Governor in preliminary discussions with any multilateral banking or financial institutions on any negotiations for the Gov’t within or outside the Philippines in order to preserve the integrity and prestige of his office. 4. including their subsidiaries and affiliates engaged in allied activities. the Gov of the BS + concurrence of 2 other Monetary Board members = decide on any matter or take any action within the authority of the Board. o Representation of a fulltime member of the interest of the Govt or other govt agencies in matters connected with the economy/financial system of the country - request from GOI/GOCC data needed for the proper discharge of their office subpoena production of said books in case of non-compliance data on firms and other banks are exclusively for the purview of the BSP exp as per court order or conditions prescribed by the MB Scope and Supervision and Examination by the Bangko Sentral Deputy Governors SEC 18. correspondence and other documents represent the BS. domestic. in an amt fixed by the Court. papers or records necessary in their judgment - - and it is sufficient to call for a meeting of the MB. or employee of any institution under their respective supervision or subject to their examination o compel the presentation of all books. all reports. 3.1. Director. limit their professional activities to those pertaining directly to their positions with the BS. banking institutions and quasi-banks. in any legal proceedings. not more than three DUTY: assigned by the Gov and board DEPUTY GOV – designated by the Gov shall take the place of the latter in his duties and responsibilities when the same is absent - BS has supervision over and conduct periodic or special examinations of. sign contracts entered into by the BSP. o SUBSIDIARY – more than 50% of the voting stock is owned by the bank or quasi-bank o AFFILIATE – 50 % or less is owned by bank or quasi-bank Emergencies V. Officer or Stockholder. as authorized by the MB. profit and loss statements. Operations of the Bangko Sentral - In case of emergencies Research and Statistics of the BS department heads/examiners have the following supervisory authority o administration of oaths to any director. officer. credit and exchange policies. And Related Interest . the Gov shall call a meeting of the MB to submit his action for ratification. public or private. At the soonest possible time. public or private. BS prepare data o balance of Philippine payments o statistics on the monthly movement of the monetary aggregates o prices and other statistical series and economic studies useful for the formulation and analysis of monetary. remunerated or ad horem EXP: positions in o Eleemosynary o Civic org o Religious org o Cultural org o Designation of the Pres. The Gov shall submit a report to the Pres and Congress within 72 hours after the action has been taken. agencies and instrumentalities of the Gov’t and all other persons or entities. balance sheets. banking.

in writing. in accordance with its authority under the NCBA. Operating departments of the BSP The monetary board shall. except non-stock savings and loan associations and provident funds organized exclusively for employees of the Bangko Sentral. That personnel of the supervising and examining departments are prohibited from borrowing from a bank under their supervision or examination (sec. contracts a loan or any form of financial accommodation from: (1) his bank. (2) (3) shall be required by the lending bank to waive the secrecy of his deposits of whatever nature in all banks in the Philippines.A. fully disclosed to the Monetary Board. or to any person authorized by either of them. and borrowing from any institution subject to supervision or examination by the Bangko Sentral shall be prohibited unless said borrowing are adequately secured. directly or indirectly. officer or stockholder who together with his related interest. Contracting Loans (i) Any director. an annual fee in an amount equal to a percentage as may be prescribed by the MB of its average total assets during the preceding year as shown on its end-month balance sheets after deducting COH and amounts due from banks. VIII -. or under such conditions as may be prescribed by the Monetary Board.27. whichever is lower. the Congress or any government office or agency authorized by law. however.Bank or quasi-banks shall pay the BS within the first 30 days of each year. or in the maximum amount permitted by law. or in which a controlling proportion of the shares is owned by the same interest that owns a controlling proportion of the shares of his bank. information relating to the condition or business of any institution. and except as otherwise provided in the NCBA.ADMINISTRATION A. from any institution subject to supervision or examination by the Bangko Sentral. of the BSP as it deems convenient for the proper and efficient conduct of the operations and the accomplishment of the objectives of the BSP. in excess of five percent (5%) of the capital and surplus of the bank. This prohibition shall not be held to apply in the giving of information to the Monetary Board or the governor of the Bangko Sentral. personnel of the Bangko Sentral are prohibited from (P-ORRB) (1) being an officer xxx. directly or indirectly requesting or receiving any gift xxx for himself or for another. revealing in any manner. . (4) B. and shall be subject to such further rules and regulations as the Monetary Board may prescribe: Provided. (ii) Any information obtained from an examination of his deposits shall be held strictly confidential and may be used by the examiners only in connection with their supervisory and examination responsibility or by the BSP in an appropriate legal action it has initiated involving the deposit account. NCBA) VII Examination of Baking Institutions Frequency of Examination once every 12months and as approved by the Monetary Board with the affirmative vote of 5 persons done by the supervising/examining board Affording Opportunity to Examine Sec 28 of NBCA Service Fees . of any institution subject to supervision or examination by the Bangko Sentral. to receive such information. or (2) from a bank— which is a subsidiary of a bank holding company of which both his bank and the lending bank are subsidiaries. except under orders of the court. including a public information office. (sec 38 NCBA) The functions and duties of such operating departments and other offices shall be determined by the monetary board. Prohibition Against Personnel of the Bangko Sentral In addition to the prohibitions found in RA 3019 and 6713. determine and provide for such operating departments and other offices.

escept as otherwise provided in the transitory provisions of the NCBA (sec 44) • Publish a general balance sheet showing the volume and composition of its assets and liabilities as of the last working day of the month w/in 60 days after the end of each month (except for December = to be submitted w/in 90 days after the end thereof). the BSP shall determine its net profits or losses. For whom: President and Congress justifiable reason as may be determined by the monetary board shall cause the withholding of the salary of the personnel concerned until the requirements are complied with (sec 40) Signatures on statements Balance sheets and other financial statements of the BSP shall be signed by officers responsible for their preparation. Annual report of the BSP When: before the end of March of each year The BSP SHALL PUBLISH ANOTHER VERSION OF THE ANNUAL REPORT IN TERMS UNDERSTANDABLE TO THE LAYMAN. Profits or losses arising from any revaluation of the Bangko Sentral's net assets or liabilities in gold or foreign currencies with respect to the . Monthly movement of purchases and sales of foreign exchange and of the international reserves of BSP The balance of payments of the Phils Monthly indices of consumer prices and of import and export prices Monthly movement in summary form. Fiscal year = shall begin on Jan 1 and end on Dec 31 of each year (SEC 42 NCBA) Computation of profits and losses Within the first 30 days ff the end of each year.B. FAILURE TO requirements COMPLY with the reportorial pursuant to this article w/o Revaluation profits and losses Section 45. the monetary board shall determine and carry out the distribution of the net profits. remedial measures in response to such abnormal movements Shall also include statement of the financial condition of the BSP and statistical appendix w/c shall present AS A MINIMUM the ff data: • 1. abnormal movements in monetary aggregates and the general price level. Monthly movement of monetary aggregates and their components B. not later than 72 hrs after they are taken. - o 8. Revaluation Profits and Losses. In the calculation of net profits. of exports and imports by volume and value Monthly movement of the accounts of the BSP and other banks Principal data on government receipts and expenditures and on the status of the public debt both domestic and foreign Texts of major legal and admin measures adopted by the government and the monetary board during the year w/c relate to the functions or operations of BSP or of the financial system D. 4. it shall make adequate allowance or establish adequate reserves for bad and doubtful accounts (sec 43) C. AND SPECIAL ACCOUNTS A. Distribution of net profits w/in the first 60 days ff the end of each fiscal year. The Monetary board shall publish and submit the ff reports to the President and Congress: An analysis of economic and financial developments + condition of net international reserves and monetary aggregates (not later than 90 days after the end of each quarter) The preceding year’s budget and profit and loss statement of the BSP showing in reasonable detail the result of its operations (w/in 90 days after the end of year) Review of the state of financial system (120 days after end of each sem) As soon as practicable. and by the auditor of the Bangko Sentral (sec 41 NCBA) IX – PROFITS. 3. - 7. C. - 5. 2. LOSSES. in accordance with the ff rule: o 50% of the net profits shall be carried to surplus The remaining 50% shall revert back to the National Treasury. by the governor. Required reports and publications of the BSP What: Annual Report on the Condition of the BSP + a review on the policies and measures adopted by the Monetary Board during the past year + analysis of economic and financial circumstances w/c gave rise to said policies D. 6. and.

take action under Sec 30 (Receivership and Liquidation) of the NCBA. The Revaluation of International Reserve (RIR) account as of the effective date of this Act of the Central Bank shall continue to be for the account of the same entity and shall be governed by the provisions of Section 44 of Republic Act No. depending on whether the revaluations have produced net profits or net losses. Resignation or termination from office shall not exempt such director or officer from administrative or criminal sanctions. or both. or violation of. any willful failure or refusal to comply with.000 or by imprisonment of 2 – 10 years. orders or instructions - - shall unless otherwise provided in NCBA be punished by a fine of P50. at the discretion of the court Whenever a bank or quasi-bank persists in carrying on its business in an unlawful or unsafe manner. The auditor of the Bangko Sentral and personnel under him may be removed only by the Chairman of the Commission. any willful making of a false or misleading statement to the Board or the appropriate supervising and examining department or its examiners. and to appoint and fix salaries and number of personnel to assist said representative in his work. any banking law or any order. as amended.Philippine peso shall not be included in the computation of the annual profits and losses of the Bangko Sentral. as such. rules and regulations. respectively. as amended. are hereby repealed. *The Revaluation of International Reserve account shall be neither credited nor debited for any purposes other than those specifically authorized in this section Section 47.000 . or by imprisonment of not more than 5 years. 265. d. or both. Suspense Accounts. or by imprisonment of 1 – 5 years. willful delay in the submission of reports or publications thereof as required by law. The salaries and other emoluments shall be paid by the Commission. . instruction or ruling by the Governor. instruction or regulation issued by the Monetary Board. If the offender is a director or officer of a bank. D. Amounts outstanding as of the effective date of this Act based on these accounts shall continue to be for the account of the Central Bank and shall be governed by the transitory provisions of this Act. Penalty for the willful making of a false or misleading statement on a material fact . . at the discretion of the court *Notes: 1. The auditor B. without prejudice to the penalties provided above and the administrative sanctions provided in Sec 37 of NCBA. the Board may. such corporation may be dissolved by quo warranto proceedings instituted by the Solicitor General. 265. in accordance with law. Administrative sanctions on banks and quasibanks (Administrative Violations: CDR-FLIB) 1. creating the Monetary Adjustment Account (MAA) and the Exchange Stabilization Adjustment Account (ESAA). any refusal to permit examination into the affairs of the institution. or f.Sections 43 and 43-A of Republic Act No. he is empowered and authorized to appoint a representative who shall be the auditor of the Bangko Sentral and. the Monetary Board may also suspend or remove such director or officer.000 – P100. fix his salary. Appointment and Personnel. the violation of any of the provisions of the GBL shall be subject to Sections 34. The representative of the Chairman of the Commission must be a certified public accountant with at least ten (10) years experience as such. X.The Chairman of the Commission on Audit shall act as the ex officio auditor of the Bangko Sentral and. A. quasi-bank or trust entity. any willful violation of its charter or by-laws. or both. 36 and 37 of the New Central Bank Act. Any remaining profit or loss shall be carried in a special frozen account which shall be named "Revaluation of International Reserve" and the net balance of which shall appear either among the liabilities or among the assets of the Bangko Sentral. at the discretion of the court C. rules. Any profits or losses arising in this manner shall be offset by any amounts which. Suspense accounts Section 46. Sec 66 of the GBL provides Unless otherwise provided. and/or g.000. Administrative Violations and Penalties -without prejudice to the criminal sanctions a. If the violation is committed by a corporation. any commission of irregularities. or any order. F. Proceedings upon and penalty for violation of NCBA and other banking laws. Penalty for refusal to make reports or permit examination a fine of P50. No relative of any member of the Monetary Board or the Chairman of the Commission within the sixth degree of consanguinity or affinity shall be appointed such representative. c.00 – P200. 35.P200. e. are owed by the Philippines to any international or regional intergovernmental financial institution of which the Philippines is a member or are owed by these institutions to the Philippines. b. conducting business in an unsafe or unsound manner as may be determined by the Monetary Board E. Penalty for Violation - a fine of P100. as a consequence of such revaluations. until otherwise provided for in accordance with the transitory provisions of this Act.000. regulations.

the period of delay shall not be counted in computing the period of suspension herein provided. and may further order that immediate action be taken to correct the conditions resulting from such practice or violation. which is immediately effective upon service to the institution and/or the directors and/or officers. the imposition of which is final and executory until reversed. preventively suspend any director or officer of a bank or quasi-bank pending an investigation: Provided. said director or officer shall be reinstated in his position: Provided. 2.2. etc. the Monetary Board may issue a cease and desist order from the indicated practice or violation. negligence or petition of the director or officer. which is immediately effective upon service to the institution and/or the directors and/or officers. further.000 a day for each violation. Administrative Proceedings (1) Whether or not there is an administrative proceeding. The above administrative sanctions need not be applied in the order of their severity. That when the delay in the disposition of the case is due to the fault. to impose upon banking institutions. Monetary Board regulations. whenever warranted by circumstances. 3. the order shall be final. fines not in excess of P10. (3) The Governor is authorized. for any failure to comply with the requirements of law. The Monetary Board may. at his discretion. . (2) The respondents shall be afforded an opportunity to defend their action in a hearing before the Monetary Board or its committee chaired by any MB member upon request made by the respondents within 5 days from their receipt of the order. That should the case be not finally decided by the Bangko Sentral within a period of 120 days after the date of suspension. If no such hearing is requested within said period. modified or lifted by the Monetary Board on appeal.

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