DOLOJO group 4?
agreed to conduct business and divide
ATM (Automated Teller Machine)
-the use of automated teller machines
for depositing and withdrawing money
opened a new method for banks to
obtain branches.
TYPES OF BANKS ACCOUNTS
1. SINGLE-NAME INDIVIDUAL
ACCOUNT
-the simplest type of bank account
wherein an individual transacts with the
bank under his own name.
2. JOINT ACCOUNT
- this account is opened by two or
more individuals. There are two or more
depositors under one account. Joint
account has two forms:
A. Joint "and" account
- where all depositors have to affix
their signature in all transactions with
the bank.
B. Joint "or" account
- where any one of the depositors is
authorized to transact with the bank.
3. SOLE PROPRIETORSHIP
- an account that is opened by an
individual for his own business.
4. PARTNERSHIP ACCOUNT
- this account is opened by a
partnership. It is an organization, which
is composed of two or more owners who
the profits among themselves.
5. CORPORATE ACCOUNT
- this type of account is opened by
corporations in the conduct of its
business.
6. FIDUCIARY ACCOUNT
- this account is opened by a trustee in
behalf of another person.
7. UNINCORPORATED GROUP OF
ACCOUNTS
- an account that is opened by
associations, social , clubs , civic
oraganizations , professional , and
charitable organizations.
Inactive Deposit Account ( Dormant
Account)
- this is an account which does not
have any activity through deposits or
withdrawals over a period of time.
Insurance on Deposit
- for the protection of the depositors ,
Republic Act No. 3591 was approved.
This law provides the establishment of
the Philippine Deposit Insurance
Corporation (PDIC) which ensures
deposits maintained in member banks.
B. TRUST FUNCTION
- a banking institutions does the trust
business that is it can be authorized to
engaged in the business of a trust
company.
  Safe Deposit Boxes
- another trust service that a bank offers
is the safe deposit box. The bank rents
out the box to a client who would like to
have a safe place to put his important
documents and precious jewelry.
C. COLLECTION AND REMITTENCE
FUNCTION
- a bank acts a collection agent and in
return for its services rendered the bank
collects a service fee from its clients.
 Concentrating Banking
- a system that spreads collection of
company receivables among a number
of banks located at strategic areas.
D. LOANS AND DISCOUNT
FUNCTION
- As a financial intermediary , banks do
not only accepts deposits but also
extends loans.
TYPES OF LOANS GRANTED BY
BANKS
1. DEMAND or CALLABLE LOAN
- this is a loan that does not have a
definite maturity date and therefore , is
subject to payment anytime the bank
deems it payable.
2. TIME LOAN
- this type of loan may be short- term,
medium- term, or long -term which is
payable at a specified future time.
 Character/ clean loan
- short -term type of loan.
 Collaterized loan
- for loan whose payment is longer than
one year.
 FORECLOSURE
- process of enforcing the lien on the
property pledged by selling the property
at auction, in order to recover the money
lent and all the expenses incurred in the
process.
E. ADVISORY FUNCTION
- many distressed enterprises seek the
help of banks with regard to refinancing
their business. The banks employ
experts to assist businessmen in their
needs.
ESOMA group 5?
Classifications of Banks
Presidential Decree No. 71, Republic
Act 337, now amended Republic act
1948, states that for purposes of
uniformity, simplicity a equality of
treatment, banking institutions in the
Philippines shall be classified in the
following general categories.
Commercial Banks
Commercial Banking Corporation shall
be any corporation, which accepts or
creates demand deposits subject to
withdrawal by check. Only commercial
banks may accept or create demand
deposits. Any other bank, which has
been hereto authorized by the Central
Bank to ac^ t demand deposits, may
continue accepting demand deposits on
the discretion of the Monetary Boards
amended by PD no. 71). A commercial
banking corporation in addition tothe
general powers incident to corporations
shall have all such powers as shallbe
necessary to carry on the business of
commercial banking by
accepting(asdrafts and issuing letters of
credit, by discounting and negotiating
promissorynotes, draft. bills of
exchange, and other evidences of
debts; by receivingdeposits: by buying
and selling foreign exchange and gold
or silver bullion,and by lending money
against personal security or against
securities consistingof personal property
or mortgages on improved real estate
and the insuredthereonimprovements
Thrift Banks
these are banks established to
encourage thriftiness industry,frugality,
and the accumulation of savings among
the people. Thrift banks should be
organized in the form of stock
corporations and with a certificate of
authority to operate from the Monetary
Board of the Central Banks. It shall be
capitalized as follows: with head office in
Metro Manila, P420 million; with head
office outside Metro Manila, P64 million.
The powers granted under the General
banking Act to thrift banks are asfallows:
(a) Accept savings and time deposits;
(b) Open current or checking accounts:
provided, that the thrift bank has
net assets of at least twenty million
pesos (P20 million) and subject to
Sch guidelines of the Monetary Board.
They shall be allowed to
directly clear its demand deposit
operations with the BangkoSentral
and the Philippine Clearing House
Corporation;
( c ) Act as a correspondent for other
financial institutions;
(d) Act as a collection agent for
government entities, including but not
limited to, the Bureau of Internal
Revenue (BIR), Social Security
System (SSS), and the Bureau of
Customs;
(e) Act as official depository of national
agencies and of municipal, city
or provincial funds in the municipality,
city or province where the
thrift bank is located, subject to
guidelines as may be established by
the Monetary Board;
(f)Rediscount paper with the Land Bank
of the Philippines, the
Development Bank of the Philippines
and other government owned
and controlled corporations:
(g) issues mortgage and chattel
mortgage certificates, buy and sell them
8for their own account or for the account
of others or accept and
receive them in pavement or as
amortization of its loans;
(h) Engage in quasi-banking and money
market operations,
(i) Open domestic letters of credit;
(j) )Extend credit facilities to private and
government employees: and
(k) Extend credit against security of
jewelry, precious stones and articles as
the of similar nature, subject to such
rules and regulations Monetary Board
may prescribe.
Thrift banks are sub-classified as
follows:
Savings and Mortgage Banks: These
banks are organized for the purpose of
accumulating the savings of individuals
and investing them together with their
capital in readily marketable bonds and
debt securities, commercial papers and
account receivables, drafts, bills of
exchange, acceptances, or notes arising
out of commercial transactions or in
loans secured by bonds, mortgage on
real estate, and insured improvements
thereon, and other forms of security, or
in loans for personal or household
finance whether secured or unsecured,
and financing for home building and
home development and in such other
investments and loans which the
monetary board may determine as
necessary in the furtherance of their
economic objectives. Generally, they
specialize in granting industrial loans.
They may also lend money against
security of jewelry, precious stones, and
articles of similar nature subject to such
rules and regulations by the monetary
board.
Savings and mortgage banks may, with
the approval of the Monetary Board,
issue mortgage and chattel mortgage
certificates, buy and sell them for their
own account or for the account of
others, and accept and receive them in
payment or as amortization of loans.
Such mortgage and chattel mortgage
certificates shall be issued exclusively in
national currency and exclusively for the
financing of equipment loans, mortgage
loans, for the acquisition of machinery
and other fixed installations,
conservation, improvement of
productive properties and real estate
mortgage loans. The bank shall
coordinate the amounts and maturities
of their certificates with those of their
loans so as to ensure adequate cash
receipts for the payment of principal and
of interest at the time they become due.
Stock Savings and Loan Associations
shall include any corporation engaged in
the business of accumulating the
savings of depositors and together
with its accumulated capital, give these
out for loans and for investment in
securities of the government and any of
its political subdivisions, and
instrumentalities. Stock Savings and
Loan Associations may also issue
domestic letters of credit. They shall
primarily be engaged in servicing the
needs of households by providing
personal finance and long-term
financing for a house and for
development of industries.
Private Development Bank these are
banks organized to expand, develop,
construct, and rehabilitate our
agriculture and industry. They place
Private Development Banks within the
easy reach of the people, medium and
long-term credit facilities at reasonable
cost.
Rural Banks
Rural Banks are organized to promote
and expand the rural economy in on
orderly and effective manner by
providing farmers and small
businessmen with means of facilitating
and improving their productive facilities.
It lends out to cooperatives on
reasonable terms. In granting the loans,
rural banks shall give preference to the
applications of farmers and merchants
whose cash requirements are small.
Loans may be granted by rural banks on
security of land without Torrens Title
where the owner of private properties
can show five years or more of peaceful,
continuous and uninterrupted
possession of the property in the
concept of ownership. Rural banks may
be allowed to accept demand deposits
only with the special approval of the
BangkoSentral ng Pilipinas.
Services Performed by Rural Banks
1. Accept savings and time deposits.
2. It can open current and checking
accounts provided the rural bank has
net assets of at least P5 million, subject
to such guidelines as may be
established by the Monetary Board.
3. The rural banks act as correspondent
bank for other financial institutions.
4. Act as a collection agent.
5. Act as official depository of municipal,
city or provincial funds in the
municipality, city or province where it is
located subject to such guidelines as
may be established by the Monetary
Board.
6. Rediscount paper with the Land Bank
of the Philippines, the Development
Bank of the Philippines or any other
banking institution including its Extend
financial assistance to private and public
employees in accordance With written
permission of the Monetary Board of the
Central Bank, any branches and
agencies.
7. with Section 5 of RA 3779 as
amended.
8. rural bank may act as trustee over
estates or properties of farmers and
merchants.
Specialized Government Banks of the
Philippines
1. Land Bank of the Philippines
The Land Bank of the Philippines is
established as a corporate and
government instrumentality. Its main
purpose is to help implement the land
reform in the Philippines known as the
Comprehensive Agrarian Reform
Program (CARP). It buys farmlands
under the CARP from the landowners
and distributes these to tenants or
farmers. These lots are amortized by the
tenant farmer with the Land Bank of the
Philippines for a certain period of time.
2. Development Bank of the Philippines
The Development Bank of the
Philippines is the government counter-
part of the private development banks. It
aims to develop, expand, construct, and
rehabilitate our agricultural industry.
3. Al-Amanah Islamic Investment Bank
of the Philippines
The Al-Amanah Islamic Investment
Bank, or the Islamic Bank, is primarily
established to promote and accelerate
the socio-economic development of the
autonomous region of Mindanao by
performing banking, financing and
investment operations and to establish
and participate in agricultural,
commercial and industrial ventures
based on the Islamic conceptof banking,
subject to the rules of Islamic shari'a.
The Islamic Bank has an authorized
capital of P 1 billion divided into ten
million par value shares of P100.00
each. The subscription of ownership
ofsuch shares including the transfer
thereof to third parties shall be limited to
persons and entities to the concept of
Islamic banking. The Islamic bank
isauthorized to accept deposit from
government banks. organizations or
other entities and individuals from within
the Philippines or abroad which shall
form under any of the following non-
interest bearing placements:
1. Savings accounts:
2. Investment participation accounts:
and
3. Current accounts and other deposit
liabilities:
INESTOES group 6?
Offshore Banking Unit- A bank shell
branch located in another international
financial center. -make loans in the
Eurocurrency markets when they accept
deposits from foreign banks and other
OBUs. FUNCTIONS OF OBUs 1.
Transaction with non-residents or with
other OBU. 2. Transactions with foreign
currency deposit unit. 3. Transaction
with other than FCDU and OBU.
CLASSIFICATION according TO FORM
OF ORGANIZATION
1. UNIT BANK-is a single banking
corporation which makes and
implements its own policies. IT has one
place of business.
2. BRANCH BANKING- Is a multiple
office banking system. A bank with
branches and extention offices located
in the various places.
3. GROUP BANKING- these are unit
bank or branch banks whose majority
shares of stock are held by a holding
company.
4. CHAIN BANKING- these are
independent unit banks which are
owned by a group of people.
TRADITIONAL CLASSIFICATIONS OF
BANKS
1. PRIVATELY OWNED BANKS- these
are banks owned by private individuals.
2. GOVERNMENT OWNED BANKS-
these are banks owned by the state or
banks with a minimum private capital
like PNB, LBP, DBP, AIIBP, and CBP.
ACCORDING TO THE PLACE OF
INCORPORATION
1. DOMESTIC BANK- this is a bank
incorporated under the laws of the
country.
2. FOREIGN BANKS- this bank is
incorporated under the laws of other
countries that do business in the
Philippines.
FUNCTIONS OF A BANK
A. DEPOSITORY- banks accept
deposits in many forms of
checks, cash, money orders, and
items for collection.
CLASSIFICATION OF DEPOSIT
ACCORDING TO DIFFERENT
CRITERION;
1. deposits from private sector
2. Deposits from the government
According to the form of withdrawal
1. SAVINGS DEPOSITS-this is a
deposit accepted for safekeeping
2. DEMAND DEPOSIT- this is a
deposit that may withdrawn anytime
by presenting a check.
(MANUAL OF REGULATIONS FOR
BANKS ON DEPOSIT AND
BORROWING OPERATION as of
dec. 31, 1996) Section X201
authority to accept or create demand
deposit EKB/KB- may accept or
create demand deposits subject to
withdrawal, without prior authority
from BSP. TB/RB/COOP BANK-
may accept or create demand
depositsupon prior authority of the
BSP. Section X202 Temporary over-
drawings; drawings against
uncollectected deposits Section
X203 Checks without sufficient funds
Section X204 Current accounts of
bank officers and employees
MAGPOSAO – GROUP 7
CHAPTER 9 COMMITTEES
ASSOCIATED BY THE BOARD OF
DIRECTORS: 1. EXECUTIVE
COMMITTEE- it deals with the
administrative matters. It acts as the
advisory body to the board in matters
pertaining to the general conduct of
the business such as: 1. Hiring of
executive officers and determining
their remuneration 2. Removal of
such officers may be deemed
necessary by the committee 3.
Discussing and reviewing any
general matter pertaining to
administration affairs of the bank 4.
Discussing, reviewing and making
recommendations for the adoption in
the major changes of the bank's
procedure 5. Identifying and finding
solutions to tha problems wherein
the area of responsibility 2.LOANS
AND DISCOUNT COMMITTEE- it
reviews , approves or disapproves
loan application submitted to it in line
with the BOD's established policy. It
determines from time to the Rate of
interest to be paid on time and
savings deposits. 3. INVESTMENT
COMMITTEE- it concerns with the
bank's investment portfolio. This
committee determines the amount
and percentages of demands and
time deposits and capital fund of the
bank. It approves the purchase and
sale of securities from the bank's
investment portfolio. 4. TRUST
COMMITTEE- it deals with the
fiduciary function of the bank. The
function of this committee is to
accept or reject all new accounts in
which the bank is to act in a fiduciary
capacity, to approve of disapprove
the investment of all funds in trust
accounts and to see to it that the
bank is performing in accordance
with the terms and conditions of the
trust indentures of the trust
agreement. 5.EXAMINATION
COMMITTEE- in charge of
identifying all problems in connection
with the audit and examination of the
bank, finding solutions and making
recommendations to the board of
directors.