GROUP 3

RURAL
BANKS
PR I VATE BA N K I N G I N S T I TUTI O NS
 RURAL BANKS
RURAL BANKS ARE PRIVATELY
OWNED, LOCALLY BASED
FINANCIAL INSTITUTIONS THAT
MOBILIZE FINANCIAL RESOURCES,
EXERCISE CONTROL OVER, AND
ISSUE LOANS TO FARMERS,
SMALL-SCALE MANUFACTURERS,
AND OTHER RURALLY BASED
BUSINESS OWNERS IN THEIR
SPECIFIED REGION OF
OPERATION.
 RURAL BANKS
RURAL BANK CAN BE ALSO BE
DEFINED AS RURAL
FINANCIAL INSTITUTION/
COOPERATIVE/ COMMUNITY
BANK OR DEPOSIT TAKING
MFI THAT PROVIDES
CUSTOMISED FINANCIAL
SERVICES TO RURAL
COMMUNITIES.
HISTORY OF THE RURAL
BANK OF THE PHILIPPINES
THE CREATION OF RURAL BANKS IN
1952 WAS WHEN REPUBLIC ACT 720 WAS
ENACTED.
THE ENACTMENT WAS DONE AT THE
TIME WHEN THE COUNTRY WAS REELING
FROM THE DEVASTATION OF THE WORLD
WAR II AND THE RURAL AREAS, WHICH
ARE HOME OF 85% OF THE POPULATION
THEN, WERE LEFT TRULY DEVASTATED AND
UNDERDEVELOPED. .
 THE RURAL BANKS, UNDER THE RULES,
REGULATION AND SUPERVISION OF THE CENTRAL
BANK OF THE PHILIPPINES BECAME THE KEY LOCAL
FINANCIAL INSTITUTIONS PROVIDING CREDIT TO
FARMERS AND PEOPLE OF RURAL COMMUNITIES,
THEREBY PROMOTING AND EXPANDING THE RURAL
ECONOMY IN AN ORDERLY AND EFFECTIVE MANNER
AND IMPROVING THE QUALITY OF LIFE IN THE
COUNTRYSIDE.
THE PHILIPPINE RURAL BANKING SYSTEM WAS
ESTABLISHED THROUGH THE RURAL BANKING ACT OF
1952 WHICH WAS LATER AMENDED BY THE RURAL
BANKING ACT OF 1992.
 IMPORTANCE OF RURAL
BANKS
PROMOTING AND EXPANDING THE
RURAL ECONOMY AND PROVIDING
BASIC FINANCIAL SERVICES TO
RURAL COMMUNITIES THAT ARE
NOT SERVED TO ANY SIGNIFICANT
EXTENT BY COMMERCIAL BANKS.
 FUNCTIONS OF RURAL BANKS
GRANT LOANS SELL DOMESTIC RECEIVE IN
AND MAKE DRAFTS. CUSTODY FUNDS,
INVESTMENTS IN DOCUMENTS, AND
ACCORDANCE SELL DOMESTIC OTHER VALUABLE
WITH EXISTING DRAFTS. OBJECTS, AND
RULES AND RENT SAFETY
REGULATIONS. ACT AS DEPOSIT BOXES
CORRESPONDENT FOR THE
ACCEPT SAVINGS FOR OTHER SAFEGUARDING OF
AND TIME FINANCIAL SUCH OBJECTS.
DEPOSITS. INSTITUTIONS.
FUNCTIONS OF RURAL BANKS
ACT AS FINANCIAL MAKE COLLECTIONS
AGENT, BUY AND AND PAYMENTS FOR
SELL, BY ORDER OF THE ACCOUNT OF
AND FOR THE OTHERS AND
ACCOUNT OF ITS PERFORM SUCH
CUSTOMERS, SHARES, OTHER SERVICES FOR
EVIDENCES OF ITS CUSTOMERS AS
INDEBTEDNESS AND ARE NOT
ALL TYPES OF INCOMPATIBLE WITH
SECURITIES. BANKING BUSINESS.
 BASIC
PURPOSE OF IMPLEMENTING
POLICIES
In views of the importance of Rural Banking in Rural
and Agricultural Development, Central Government
Banks granted incentives to organizers of Rural
Banks. Such incentives include tax exemption and
nominal interest rates. These incentives are
intended to encourage the formation of more rural
banks in the areas where credit facilities.
 Directors and Officers
The President and at least a majority of
the key executive officers of the bank
must be actual residents of the locality
where the rural bank is operating.
OFF I CERS NEI L
TRAN
C on t ent
De p a r t ment
 1
CONSANGUINITY (BLOOD
RELATIONSHIP) OR AFFINITY
(MARRIAGE RELATIONSHIP) -
KEY EXECUTIVE OFFICERS
SUCH AS THE PRESIDENT,
VICE-PRESIDENT, MANAGER,
TREASURER, CASHIER AND
ACCOUNTANT MUST
NOT BE RELATED TO
ONE ANOTHER.
 2
NO INDIVIDUAL OR FAMILY
GROUP (RELATED TO 3RD
DEGREE OF
CONSANGUINITY OR
AFFINITY) SHALL OWN OR
CONTROL MORE THAN 35%
OF THE VOTING SHARES
UPON ORGANIZATION OF
THE RURAL BANK.
 3
NO OFFICER OR
DIRECTOR OR A RURAL
BANK CAN BE AN
OFFICER OR DIRECTOR
OF ANOTHER RURAL
BANK.
 4
PERSON`S CONNECTED
IN THE GOVERNMENT,
WHETHER BY ELECTION
OR APPOINTMENT,
CANNOT SERVE AS
OFFICERS OF THE RURAL
BANK.
Organizers are required to accomplish and submit to the
Bangko Sentral the articles of incorporation and by-
laws; bio-data of each incorporators, subscribers and
officers and a list of principal officers who will manage
the bank.
 SERVICES The Rural Bank, upon prior approval the
Monetary Board, performs any or all
of the following services:

1 Open current demand or checking

accounts or now accounts.
2 Act as trustee over estates or
properties of farmers and merchants.
3 Acts as official depository of
municipal, city or provincial funds in
the municipality, city or province
where the bank is located.
4 Rediscount paper with the
Philippine National Bank or the
Development Bank of the
Philippines, or other banks and their
branches and agencies, subject to
such rules and regulations governing
rediscounting.
5 Invest in allied undertakings .
 TOTAL NUMBER OF
RURAL BANKS
THERE WERE ONLY 18
RURAL BANKS OPERATING
THEN IN 1853, BUT NOW
THERE ARE 711 RURAL
BANKS (WITH 1,959
BRANCHES/OTHER
OFFICES) ALL LICENSED IN
THE BANGKO SENTRAL NG
PILIPINAS.
TOP 5 RURAL BANKS IN THE
PHILIPPINES (DEC. 2021)
1. BDO Network Bank - 54.75 B
2. East West Rural Bank - 29.07 B
3. Card Bank, Inc. (A Microfinance -
Oriented Rural Bank) - 21.41 B
4. Guagua Rural Bank - 6.88 B
5. Card MRI Rizal Bank - 6.41 B
 GROUP 3
LEADER:
Gunnacao, Monica F.
MEMBERS:

Garil a o , W e n e l y n
King, G e r a l d M i g u el
Kingg i n g a n , A r i a n e Nicole S.
Lazar o , A r v i l l a
Mabb o r a n g , R o x e tte
Nacen o , S h a n e B .