Philippine Christian University Callegeof Law 1 Semester, AY. 2021-2022 COURSE SYLLABUS in BANKING LAWS ‘ty. Kayzer Aldrin Z.Saba,DPO, DPO-ACE 1. Introduction A. Constitutional Basis 1. Article XII, Sec. 20, 1987 Philippine Constitution B. Sources of Banking Laws 1. Republic Act No.7653, The New Central Bank Act (See I) Republic Act No, 11211, Amending the NewCentral Bank Act Republic Act No. 8791, The General Banking Law of 2000 (See 2) Republic Act No.7721, An Act Liberalizing the Enary and Scope and Operations of Foreign Banks in the Philippines and for Other Purposes (Sec.1) Republic Act No. 3591, The Philippine Deposit insurance Corporation Law (Sec 2) Republic Act No. 405, The Law on Seacoy of Bank Deposits Sec Republic Act No. 9160, The Anti- Moncy Laundering Act of 2001(Sec2) Republic Act No. 10175, Gybererime Prevention Act of 2012 (Sec 2) 9. Republic Act No.10173, The Data Privacy Act of 2012 (Sec2) 10, BSP Manual of Regulations for Banks IL, BSP Manual of Regulations for Non-Bank Financial Institutions (Foreword) 12, Otherissuances of the Bangko Sentral ng Pilipinas C. Financial Intermediaries and Financial Markets 1. Financial Intermediaries @ Sec 4101Q., Manual of Regulations for Non-Bank Financial Institutions B. Kinds of Financial intermediaries 1 Lending Companies 2 Savings and Loans Associations 3 Financing Companies ba bisurance Companies D5 Invesoment Houses 6 invesomentCompanies b7 Pawnshops 8 Quasi Banks 9 Trust Corporations 510 Banks 2. Financial Markets ase: Banco de Orovs. Republicof the Phlppines and Commission of huermal Revenue (GR. No. 198756, January 13,2015) IL Banks A. Definition of Bank 1. Sec.3.1, General Banking Law of 2000 2. Cases: Republic of the Philippines ws. Security Greditand Aaeptance Corporation (GR. No. L-20583, January 23,1967) b. Banco de Oro-EPCL ie. JAPRL. Development Corporation (GR No, 179901,April 2008) Scanned with CamScanner3. Banks vs, Quasi-Banks @ Sec General Banking Law of 2000 D. See95,New enmal Bank Act 4. Banks vs, Other Financial Intermediaries Cases: @ Teodoro Banas vs, Asia Pacfic Finance Corporation (GR. No. 128703, Octobe 18,2000) i. First Planters Pawnshop. Inc vs.Commissioner of itemal Revenue (GR NO. 74134, July 30, 2008) B, Natureof Banking Business 1. Public Interest Cases: @ Gaystate Savings Banks. Teresita Tobias (GR No, 227990, March 7, 2018) 1b. Land Bankof the Philippines vs. Narciso Kho (GR. No, 205839, july 7,2016) ¢ Anna Marie L. Gumabon vs. Philippine National Bank (GR. No, 202514 July 25,2016) Fiduciary Nature Cases: @ Cental Bankof the Philppines vs. Citytrust Banking Corporation (GR. No. 141835, February 4,2009) b. Consolidated Bank and TrustCorporation vs.Court of Appeals (GR. No, 38569, September I, 2003) Gregorio H.Reyess.Court of Appeals (GR No, 18492, August 15,2001) 3. Degreeof Diligence Cases: Associated Banks. Vente Henry Tan (GR. No, 156940,December H,2004) Bank ofthe Philippine Bland vs. Sps. Quiaoit(GR No. 199562, January 16,2019) Philippine Banking Corporation vs. Arturo Dy (GR. No. 183774, November H,202) Simex ne mational Manila bic vs.Cowt of Appeals (GR No. $8013, March 19,1990) Deve lopmentBank ofthe Philppines vs. Guarina Agricultural and Realty Development Corporation (GR. No, 160758, January 15,2014) 4. Requirements for Establishinga Bank 4 Sec8,General Banking Laws of 2000 5. Certificate of Authority @ See M,General Banking Laws of 2000 b. Bargko Sena ng Plpimas Republic ofthe Philippines vs. Scawrty Credit and Acceptance Corporation (GR No, L-20583, January 23,1967) 4. Genoa Bank ofthe Philipines, Judge Jesus P. Morfe (GR No. L-20129, June 30,1967) 6. Name 4 See64,Gene al Banking avs of 2000 7. Special Provisions on Strikesand Lockouts @ See 22,General Banking Laws 0f2000 b. BSPGiraular No, 299, September24,2001 Classification of Banks A. Universal Banks 1. Secs.23-28,GBL 2. Investment House, Secs. (a) and 3 (a), Rules and Regulations of P.D.129 Scanned with CamScannerIv A 3. Manual of Regulation for Banks, Sec. XIO1- X102 Commercial Banks 1. Secs,29-32,GBL 2. Manual of Regulation for Banks, Sec. X1O1- X102 Cooperative Banks 1. Republic Act No. 9523, Arts. 23 andl 100 Rural Banks 1. Sec.2 of Republic Act No. 7353 asamended by RA. No 105754 2. Manual of Regulation for Banks, Sec. XIOL ‘Thrift Banks 1. Secs.2 and 3 of Republic Act No. 7906 2. Manual of Regulation for Banks, Sec. X1O1 Islamic Banks L Republic Act No.6848 2. Sec.6,Republic Act No. 11439 3. BSP Circular No.271, Seriesof 2001 Other Banks 1. Land Bank ofthe Philippines 2. Development Bank of the Philippines 3. Philippine Veterans Bank 4. Offshore Banking (Sec. la, RA. 1034) Capitalization Requirements 1. - Manual of Regulation for Banks, Sec. XIIL Foreign Banks P.D.1034 Sec.72-78,GBL Sec.1,RA.7221 Sec.2,RA. 722 1Lasamended by R.A. 10641 Ownership in Thrift Banks (Sec. 8, R.A. 7906) Ownership in Rural Banks (Sec. 4,R.A.10574) ‘Manual of Regulation for Banks, Sec. X105 as amended by BSP Circular No. 858, Seriesof 2014 Ownership, Directors and Officers, and Supervision of Banks Ownership of Banks Sce: Manual of Regulation for Banks,Sec.XIZ6.; IRR of RA $791Secs.I,12,and 15;RA 7906, RA 722k RA No. 10574; RA No. 10641: Sec 1, GBL: BSP Circular No. 256,15 August 2000; BSP Graular No. 332, Series of 2002, 1. Voting Shares of Stock of a Foreign Non-Bank Corporation Aggregate Ownership of Voting Sharesof Stock of Foreign Individual/ Non-Bank Corporation Voring Shares of Stock of a Qualified Foreign Bank Combinecl Ownership of Voting Sharesof Qualified Foreign Bank Filipino Individual Filipino Non- Bank Corporation Combined Ownership Stockholdings of Family Groups of Related Interests (See 12, GBI) Corporate Stockholdings (Sec 13,GBI) Scanned with CamScannerB. Board of Directors 1. Board of Directors under the Revised Corporation Code (See 22,RA No. 11232) a. Functions b. Composition & Powers-Citybank vs. Hon. Segundino Chua (GR No, 102300,Mardh 17, 1993) 2. Composition of Board of Directors for Banks Matters: Secs. 15 and 17, General Banking Laws b. Independent Director (Manual of Regulation for Banks, Sec. X41 andl XI412; BSP Circular Nos, 793,757,749, and 682) b1 Definition 2 Pupose 3 Parent Subsidiary, Affiliate, Related bterests,Control, Related Company, Substantial or Major Shareholder, Majority Stockholder Public Officials 1 Sec 19,GBL. €2See 5, Rural Bank Act of 1992,RA No. 7353 3. Meetings a Sec15,GBL b. SECMemorandum iraular No. 15, 20 November 2001 & Sec alsomectings under Revised Corporation Code ofthe Philipines, Sec 22, RA No, 1232 Fitand Proper Rule (Sec 16,GBL) Powers and Duties of the Board of Directors a. BSPGreular No,283,seriesof2001 b. Manual of gulation for Banks,Sec X43 © Dectrine of Apparent Authority «1 First Philippine ternational Banks. Cour of Appeals (GR. No. 115849, January 24,1996) €2 Violeta Banat vs Philippine Countryside Rural Bank (GR No, 163825,July B,2010) 3 Limkedkai Sons Milling, nc vs. Court of Appeals (GR No, 18509, December, 1995) 6. Prohibited Transactions for Board of Directors, Officers, Employees, or Agents of the Bank a Sec 55.,GBL b. Jose C. Go vs. Bangko Sentral ng Pilipinas (GR. No. 178429, Oaober23, 2009) C. Supervision of Banks L. The Role of the Bangko Sentral ng Pilipinas a Sec-4.GBL b. Case: Bank of Commerce vs. Planters Deve lopment Bank and BSP (GR Nos. 154470-7L September24,2012) 2. Objectiveand Responsibility of the BSP (Secs.2,3,and 5 ofthe New Central Bank Aa) 3. The Monetary Board a Powersand Functions a Sec 6, New Central Bank At 4.2 Romeo Busuegovs.Courtof Appeals and the Monetary Board of BSP (GR. No. 95326 March I, 1999) Composition and Temure (Secs. 6and 7ofthe New Central Bank Aa) General Exercise of Authority (Sec 15, New Central Bank Ac) 4. Supervision over Banks a Secs.4+7,GBL. Scanned with CamScannerb, Enforcement Actions: BSP Circular 875, Series of 2015, b1Coneatnve Actions 2 Sanaions 3 Other Supervisory Actions ‘ iiation into the Prompt Come cive Action Framework (Part 3, MORB) ii Cease and DesistOnder iit Conservatorship iv Receivership ¢. Examination and Report of Examination 1 Sec.28, New Cenoral Bank Act 2 Bangho Senoal ng Pilpinas- Monetary Board vs. Hon, Nina Antonino-Valenzuela (GR. No. 184778, Oawber 2,2009) ._ Restraining Action vs. Monetary Board 4.1Scc.25, New Ceniral Bank Act 4.2 Banco Filipino Savings and Mortgage Bankys. The Monetary Board, Cental Bank ofthe Philipines (GR. No, 70054 December I, 1991) V. Functions of Banks A. Deposit Functions 1. Natureand Relationship a Nature Cases: 41 Bank ofthe Philippine Island vs. Hon. Court of Appeals (GR No. 104512, May 10,1994) 4.2 Tan Tiong Tick ys. American Apothe caries, Co. (GR No, 43682, March 31,1938) b. Creditor-Debtor Relationship Cases: 1 China Banking Corporation vs. Court of Appeals (GR No, 140687, December 18,2006) 2 TeofstoGuingona, J vs. Cty Fiscal of Manila (GR. No. L-60033, pri 4, 1984) 3 Asuncion Galang Roque vs, People of the Philippines (GR No, 138954, Nove mber25,2004) ba Bank of the Phlppine Islands vs. Cot of Appe als (GR No. 156202, January 25,2007) b5 Associated Bank vs, Vicente Henry Tan (GR No, 156940,December 14,2004) ©. Voluntary Agreement Read: BSP Memorandum dated Octobe r1, 2002 Customer Identification Read: BSP Ciralar 251 s.of 2000; Section X806 Manual of Regulations for Banks & Depositors 1 Minors (Sec |, PD. 734;See 22, Thnft Bank Ad) €.2 Married Women (Sec'5,RA 7192) €.3 Corporations’ Juridical Entities (Sec X805, MORB) e4 Government and LGUs (Sec. 2240, MORB) { OtherConcepts £1 Claimof Third Persons Case: Fultron Iron Works Company vs. China Banking Corporation (G.R. No. 32576, November 6,1930) £2 Common Preferred Credit (Secs. 19 and 20, R.A. 3591) £3 Assignment of Credit Case: Sps. Godfrey and Gerardina Serfinovs. Far East Bank and Trust Company (GR No, 171845, October 10, 202) £4 Bank Deposits vs. Deposits under Title XII, Art. 1962 of the Civil Code Scanned with CamScanner£5 Bank Deposits vs. Trust under Title V, Art. 1440 of the Civil Code 2. Obligationsto Depositors a. Diligence Required Cases: 4. Philippine Savings Banks. Chowking Food Corporation. (GR No. 177526, July 3,2008) 2 Giynust Banking Corporation ws. bntermediaxe Appellate Court (GR. No. 84281 May 27,1994) 43 Gregorio H Reyes and Consuelo Puyat-Reyesvs. Courtof Appeals (GR No. 118492, August 5, 200) «a4Sps. Godfrey and Gerardina Serfinos. Far East Bank and Trust Company (GR No. 71845, October 10, 202) b. Liability for Negligence Cases: 1 Prudential Bank vs.Court of App als (GR. No. 125536, March 16, 2000) 2 United Coconut Planters Bank vs. Teofilo Ramos (GR. No, H7800, November Il, 2003) 3 Bankof he Philippine bland vs.Casa Montessori litemational (GR. No. 49454, May 28, 2004) 4 Central Bankeof the Philippines ws. Gtytnust Banking Corporation (GR. No. 41835 Febmuary 4.2009) 5 Philippine Commercial international Bank ys. Court of Appeals (GR. No. 2 1B, January 2: 2001 © Business Analogous to a Common Carrier Cases cl Euseio Gonzales vs. Philippine Commercial and Intemational Bank (GR No. 180257, February 23,2011) €2 Solidbank Corporation Metropolitan Bank & Trust Company vs. Sps.Tan (GR No. 167346, April 2,2007) 3. Kinds of Deposits a Demand Deposits Mattrs/Cases: al See 58, NCBA Sec 33, GBL: Secs. X201,2202,X 204, MORB 2.2 BPI Family Savings Banks. First Metro lnesonent Corporation (GR. No. 52390,May 21, 2004) 3 Philippine National Bank ys. hea Chee Chong (GR No. 170865, April 25,2012) 4 Bataan Cigar and Cigarete Factory Inc vs. Court of Appeals (GR No, 93048, March 31994) b. SavingsDeposit Sees. XI91.2, 2B, 324,322 MORB . Regular Savings Account 2 Kiddie Savings Account 3 Basic Deposit Account b4 Other Savings Account Negotiable Orderof Withdrawal (NOW) €1 Secs.X223.X226, MORB 2 People vs. Aloma Reyes (GR NO. 154159. March 31, 2005) Time Deposit d.1Secs, 3231-3033, MORB 4.2 BPIFamily Savings Bank vs. First Metro Ine sent Corporation (GR. No, 132390, May 21, 2004) 4.3 Far East Bankand Trust Company vs. Estella Querimit (GR. No, 8582, January 16,2002) Scanned with CamScanner4 Ghina Banking Corporation vs. Commissioner on ternal Revenue (GR No. 172359 October 2,2009) 4. Depositing and Withdrawing Funds a. Process Case: Philippine Bank of Commerce vs. Court of Appeals (GR. No. 97626, March I4, 1997) b. DirectCredit c. Proof of Deposit ase: Bank ofthe Philippine klands vs. Lfetime Marketing Corporation (GR No. 176434, June 25, 2008) Validation of Deposit Cases: 4.1Philippine Bank of Commerce vs.Court of Appeals (GR No, 97626 March 14,1997) 4.2 Firestone Tire and Rubber Company ys. Court of Appeals (GR. No. 13236, March 5,200) © General Procedure on Withdrawal Case: Bank ofthe Philippine lands vs. Court of Appeals and Benjamin Napiza (GR No, 112392 February 29,2000) £ Encashment/ Withdrawal Slip (Case: Banko the Philippine Islands vs. Cour of Appeals and Benjamin Nopiza (GR. No. 12392 February 29,2000) Electronic Transaction Withdrawal ase: Hong Kong Shanghai Banking Corporation vs. Commissioner on Iniemal Revenue (GR No. ‘IS6OI8, une 4,204) ‘h. Automatic Transfer Case: Philippine National Banks. Court of Appeals and Lil Pujol (GR No, 26152 Seprember28, 1999) i. Cash Cardor ATM Gases: 1 Far East Bank Trust Company vs.Roberto Mar Chante (GR. No. 170598, Odober 9,201) 42 Judd. Cbank [107 Mise 2d 526(NY.Civ Ct 1980)] J. Handling Withdrawals Cases Dra. Mercedes Olivervs. Philippine Savings Bank (GR No, 214567, April 4, 2016) 4.2 Cuban vs. Sps. Luis and Carmelita Cabalongan (GR. No. #6918, May 2,2006) Dishonor of Checks 1. Booking of Deposits m. Statement of Account and Passbooks 5. Types of Deposit Accounts See:Amticles 1207, 1208; Subsection 1262, X263,X8062.4, MORB; Arts. 379 and 380, Family Code, BSP Grailar 251,s.2000, Sec 9 (a) 9160; BSP Circular 928, s.2016, a. Joint Accounts b._ By, In Trust For, For Account OF ¢ Anonymous Accounts Numbered Accounts Dormant Accounts, Scanned with CamScanner6. Deceased Depositar @ Sec 97ofNIRC as amended bySec 270fRA 10963 (TRAIN LAW) B.RMC No, 62-2018, dated une 28,2018 ***To be continued Suggested Reference Materials: Aquino, Timoteo and Maria Margaret Bernadette A. Aquino. Fundamentals ofBanking Laws. Quezon City: Rex Printing Company, Inc., 2019. Ignacio, Larry. Banking and Allied Lanws. Quezon City: Central Book Supply, Inc.,2016. Scanned with CamScanner