Professional Documents
Culture Documents
- atleast (5) max. (15) 5-15 members Compensation and Other Benefits of Directors and
- (2) must be independent directors- other than an officer or Office
employee of the bank, its subsidiaries, or affiliates or related - Monetary board may regulate the payment by the
interest bank to its directors and officers of compensation,
- Non-Filipino residents can be a member of BOD only to the allowance, fees, bonuses, stock options, profit sharing
extent of his/her foreign participation in the equity and fringe benefits only in exceptional cases, not
-meeting can be conducted through modern tech. but not limited to the following:
limited to videoconferencing/teleconferencing bank is under comptrollership or
conservatorship
- Directors of merged or consolidated banks bank is found by the Monetary Board to be
shall not exceed 21 conducting business in an unsafe or unsound
- Election: President, Treasurer (director or not), manner
Secretary (resident citizen). bank is found by the Monetary Board to be in
- Not allowed position: President/Secretary, an unsatisfactory financial condition
President/Treasurer
- A foreigner may be a member of the Board of Banking Days and Hours
directors of a rural bank at the time of their - all banks including their branches and offices
assumption of office shall transact business on all working days for
at least six (6) hours a day
- may open for business on Saturdays, Sundays
Fit and Proper Rule or holidays for at least three (3) hours a day
*must report to BSP
Powers of MB against directors:
a. Review qualifications and DQs of directors • For purposes of deposits and
b. After due notice, may disqualify, suspend or withdrawals, bank can extend beyond or
remove director early of 8AM and 8PM
c. Fit and proper rule shall be determined by - • If it is for other purposes, they can
integrity, experience, education, training, exceed 6 hours minimum but not extend
competence of the director beyond or early of 8AM and 8PM
• Banks in airports or major fish ports can
Disqualifications of directors: open 24hours
a. Convicted of final judgment involving dishonesty or • Changes in banking days and hours can
breach of trust be made once every 30 days except during
b. Persons convicted of final judgment with a emergencies
maximum imprisonment term of more than 6 years
Strikes and Lockouts
c. Convicts of banking laws
- any strike or lockout involving banks, if
d. Persons judicially declared insolvent
unsettled after seven (7) calendar days shall
e. Culpable of bank’s closure (guilty) be reported by the Bangko Sentral to the
f. Administratively liable for violation of banking laws Secretary of Labor who may assume
with penalty of removal from office jurisdiction over the dispute or decide it or
g. Found unfit for position certify the same to the National Labor
Relations Commission for compulsory
• There can be also temporary disqualifications and arbitration.
shall exist until DQ is gone - However, the President of the Philippines
• Under CC (Corporation Code) disqualification is only may at any time intervene and assume
with (1) imprisonment more than 6 years or (2) jurisdiction over such labor dispute in order
violation of code committed within 5 years to settle or terminate the same.
- Banks, through their president, shall
inform BSP of the cause of the strike and
the operations affected
Replacement of currency unfit for circulation
Loans and Other Credit Accommodations Against Real
Estate • BSP shall withdraw from circulation and demonetize all
- shall not exceed seventy-five percent (75%) of notes and coins unfit for circulation and shall replace them
the appraised value of the respective real estate • BSP shall not replace notes under mutilated condition and
security, plus sixty percent (60%) of the appraised without compensation to bearer
value of the insured improvements, and such loans
• Mutilated condition: (1) identification is impossible, (2)
may be made to the owner of the real estate or to
his assignees. signs of filing, clipping, or perforation (3) notes lost more
than 2/5 of surface or all signatures
Loans and credit accommodations on security of Retirement of old notes and coins
chattels and intangible properties
- Shall also not exceed 75% of the appraised • BSP may call for replacement of notes (more than 5 yrs
value of the security old) and coins (more than 10 yrs old)
• Checks representing demand deposits do not have legal • International reserve shall include but not limited to:
tender and acceptance is at the option of the creditor • Gold
• Check cleared and credited to account of creditor shall be • Assets in foreign currencies
equivalent to delivery
• Assets in foreign currencies include
• BSP Circ. 537 of 2006 – maximum amount of coins to be
considered as legal tender o 1,5,10 peso coins – 1k o (1) documents of international transfer of funds,
1,5,10,25 centavos – 100 (2) demand and time deposits of banks abroad and
Except:
- Loans, credit accomodations and
guarantees secured by assets considered
as non risk by MB
- L, CA, Advances to officers in the form
of fringe benefits
- Cooperative banks with regard to their
cooperative shareholders
d. the resolution approving the loan shall be entered in the
records of the bank and transmitted to bsp
e. waiver of secrecy of deposits of whatever nature in all
banks in the ph by the borrower. No waiver is required if
the related interests are the borrower
f. information obtained from examination is strictly
confidential
- Director who violates the position vacant, subject to
penal provision
Expenses of conservatorship
- It shall be borne by bank concerned
Terminations of conservatorship
Cessation of banking business • Receiver may deposit or place funds of bank in
Voluntary liquidation non-speculative investments
- In voluntary liquidation, bank sends to MB notice • Receiver shall determine within 90 days from
of liquidation takeover, whether institution may be
- No voluntary dissolution shall be undertaken by a rehabilitated or otherwise (liquidation)
bank without prior approval of MB. Request of • Determination of resumption of business is
voluntary dissolution shall be accompanied by subject to approval of MB
liquidation plan • In Teal Motor vs. CFI, receiver was defined as a
indifferent person appoint by the court to
Receivership preserve the funds of the in litigation pendent lite
- Equivalent to an injunction to restrain the • He is not an agent or representative of any
bank in any way. Appointing a receiver to party
suspend the authority of the bank over its
property LIQUIDATION- process of converting assets
- The MB can summarily and without need of prior to money
hearing forbid the institution from doing business - Notify in writing the BOD
and designate PDIC as receiver - It is the insolvency of the bank or its
- Grounds for receivership and liquidation: continuance would involve probable loss
1. Unable to pay liabilities that are due. This to its depositors and creditors
shall not include inability to pay cause by - Determination of the MB that the bank
extraordinarily demands by financial panic cannot be rehabilitated
2. Insufficient realizable assets Procedure:
3. Cannot continue business without involving 1. Receiver shall file ex parte, with a proper
probable loss to depositors or creditors RTC, a petition for assistance for
4. Wilfully violated cease and desist order liquidation of the institution pursuant to
involving transactions of fraud liquidation plan adopted by PDIC to all
5. In case a bank notifies BSP or public closed banks. If quasi-bank, the
announces bank holiday where it suspends liquidation plan shall be adopted by
payment of its deposit liabilities continuously for Monetary board
more than 30 days 2. He shall convert the assets of the
institution to money for the purpose of
GBL: paying the debts of the institution
1. Notification to the bsp or public 3.
announcement of a bank holiday 4. Payment shall be in accordance with the
2. Suspension of payment of deposit liabilities rules in concurrence & preference of
continuously for more than 30 days credits
3. Persistence in conducting business in an (regular courts have no jurisdiction over
unsafe/unsound manner claimants against insolvent bank)