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    General Banking Law

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    Emilio Joshua Padua

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    © All Rights Reserved
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    3) Upon the order of competent coutin {:a8e of bribery or dereliction of diy. of public officials; 4) Upon the order of a competent cout in cases where the money deposed or invested is the subject of ligation (21995 Ber), Pasniy 2: Generar a (RA No. Las eA Na Epon inguity by, therCommissioner of_money, laundering (s ‘1, RA the House of Representatives is not ‘authorize for at least.ten G0) years under the {retaimed Balances Act {See 2, RA, No.3936). Aster 10 10) Report of banks to Anti-Money Laundering Council (AMLC) of covered and/or suspicious transactions (Gec.9, R.A. No. 9160 as amended) 11) Ugonorder of the Court of Appeals, ‘examination by law — enforcement QO Mi 5 he Monetary Bosses ¢ “deficiency (Se. 1c), RA.No- Tose 15) When. there is a waiver in, Op Site a 16) Disclosure to the BSP in the course ot Ganinuton wemure coon the Anti-Money Laundering Act and testing of numbered accounts (Ses § nd TERANo 3G, ees ©) (fewdscsure witout Cout enke to object during the proceedings where joeirabsry is involved doe coe = PARTIV ° Berkey AN, 20 Sy ps Ba en i ‘account serves no other purpose than to establish the existence of such inquiry into a bank deposit account the “povacy and confidently of which [REVIEWER ON COMMERCIAL LAW is: ‘ted by law (BSB Gy Say Oo CNG Tote4y Fea Ine. Fe 2010). February, if FOREIGN CURRENCY D , ~ Vie above-enumerated Therefore, the exceptions are 1882, 1968 33 and 2012 Bar) . 1) when there is written. consen ender Section 8 of the Fong, Currency Deposits Act; 2) under Section. 11. of the _Anti.Ato Laundering Act; 3) under Sections, 27 and_28 of the Hung, Security Act! ‘examination to ensure compliance with he ‘Anti-Money Laundering Act? and + D. Philippine Deposit insurance Corporations Inquiry into and examination of deposi. gmt vee Bat se rovins do a yo foe is "See Ants Money Laundeing Act of 01 (RA. No, 9160), See Cher 2. PARTIV a ‘A General Banking Lay (RA. No. 691) Law on Sere of Depots and Rll Las e SECRECY OF DEPOSITS UNDER THE ANTI- \ MONEY LAUNDERING LAW ‘court order is not even necessary fense or unlawful activity involved is jollowing: \\ 8) Kidnapping fr ransom under Article 267} \ ‘of Act No. 381 ise known as the sciahatsarcaes | ‘b) Sections 4, 5. 13, 14, 15, and | ee } NY [REVIEWER ON COMMERCIAL LAW al A Depostettat ae xemPt fom Barish | 1) Foreign Currency Deposits (Se. 8, Fog, Note: The Supreme Court in Scion, ta Cota Bg et 2) Those exemptunder the Rules of cig) ‘Procedure like. provision for the family gr four months (Sec. 13 of Rule 39 ofthe 1955 ales of Ciel Procedure) ‘uar, DEPOSIT INSURANCE (R.A. No. 3591, a8 amendes (0) Inthe case of any negoti epost the owner or 1) Jngoed depoit— the amount du to ay "BE dpester or epate depose mand A. Gener Basing, ° (A.No gm) law on Sey Dept and Rated Lama bank as ofthe date of Hohe et of dome but nto een @) Can the. maximum deposit insurance be adjusted? Yes, the maximum deposit of the Philippines. ©) | Deposits Not Cavered by Insurance. The PDIC shall not pay deposit insurance forthe fllowing accounts or transactions, whether denominated, documented, recorded or booked as deposit by the bank: a Yv BEVIEWERON CONMERCIALLAW (4) Deposit accounts or transactios Fictitious or fraudulent; (6) Deposit accounts or transactions tung and/or emanating trom, unset ‘unsound banking practice/' as dew ® By FOICS Bard ter note aah! and publication of cease and desist ge 8 (6) Deposits that are determined to be 4 (© omeds ofan unlawful acy oe tnder RA. No. 9160 or the Angas! Liundezing Laws od (epost accountsthat rested fom, (6) Money placements by the head oe o a foreign b ranch in eo splitng is broken down and transferred to two of mot Which | as accopints inthe names of persons or entities who avd no benef ‘ownership in the transferred deposits within 120 days immediately preceding or during a bank-declared bank holiday oF immediately preceding a closure order issued by the Monetary Board for the purpose of availing of the maximum deposit insurance coverage This is a criminal act and the deposits are not entitled to any insurance payment, a Determination of Amount such amount due to any de bbe added together all_deposits in the in the same right and capacity for his ld jointly by two or more ‘by two.or more juridical ties the maximum insured es, unlessa diferent sharing, lated in the document of deposit 3) If the account is held by a juridical person. ith one or more natural persons, the maximum insured deposit sumed to belong entirely to such (4) The aggregate of the interest of each co- accounts, whether insured deposit of P500,000.0. Me x Pipe savings account A joint acount lke the REVIEWERON COMMERCIALLAW eX san nse coverage of 72500000 consiuing4, Ta nen case considered shared ag gS sone acne eps pated Nero rst tmare on op F000 onda spt arro WY wl ord an rue dp te a ec jt accu Some Le tepot nt tame 2 doa toe shes el dooce ice hove Gat ae sea Iter own nght and expacity even if they are malntima le beet bones ganado Sede nnomntin alter apy asc See staal ogee ix ecshenls Pay pe rsmonin Me Zs nin depot op 972006000, he sen heatinty Me 7 cagraon ht two svingsactuns in ABC Bk scr wih a talace of 77990000 nthe name of 8 Cet Tone Ante scout wi atlas of PONS See ming name “AZ Corporton and/or un ei Gate much te inured pont oY Corpor Jrandeta Cae eponits of XY2 Corporation § reo rF50,000 0 sine while sted Mr. A, Me. B, and Mr. C are depositors in the closed XYZ Bank with the following accounts: (1) Account o0n00 ‘the name of M.A; (2) Account 2—P600,000.0 rare ‘A. General Banking Law (R.A. No. 8791) = Lamon eyo na (9) Account 3 — P700000.00n the name. reat ZOOM. thenameot Mt C; {50,00.00) and. ‘The insured deposit of Ii shat and his share in Aetou is 7350 000 00 which consists of count with Mr A (725000000) 100000), “Account 2 the of Mr, Cis P850000.00, which consists count 3, which i share in the joint accounts amounting to P350,000.00 (P250,000.00 in Account 4 and P100,00000 1% ‘Account 5) 9 WHEN PAYMENT IS MADE. The proceeds of the insurance shall be paid by the PDIC within sic months to the depositor counted from the filing ofthe claim whenever the insured closed on account of insolvency; otherwise the shall be deemed to have been closed on account of insolvency when ordered closed by the Monetary Board of the BSP (Sec. 19, R.A. No. 3591 as amended by R.A. No, 10846, PDIC Lew). pon the insured bank, ‘The claim must be filed within two years from actual takeover by the receiver. oR eC TMRR, on EVIEWERON COMMERCIAL LAW ‘The insurance coverage may be term; Tink does nt comply within 30 daye nei, the PDIC relating to a depositrelateg SU, sound banking practice (Se. 1) poy sme) . sake deposits ina bank in dang. ‘upon its acquisiti or in the qualified purchase (Sec. 22 fortectve actions if no corrective acigeS implemented by the Monetary Board on DIC is authorized to termi insured status of a bank ifthe lat The law enhanced author implement “resolution” ay, preventive mechanism in relation to bani, with problems (Sec. 9, Fifeenth Pars Se 1, Powers after Closure: (i) There is no more and the POC 2 Po plement the purchase of the assets of the dosed ‘ordered closed by no longer be rehabilitated jpoweni pee nere oe cue 1 gethe time ik was dosed, Aad thre secant nt id teach account had an outstanding balane of jor ota Siount of F7S000000, How math ean ise ora al ea ee 4 se FI ev a “ea pn -depestors Othe ne time depots JA preterit gh an vee a ee ‘When a claim was made on the remaining 30 tne Senos We DIC ejected the caimon the ground tha tey were no depos fade inthe usual coue of business Did POIC wahly ee Sain ‘As No, PDIC did nt validly reject the cai, MB Bank and its cent should be given the benefit ofthe doubt tat they were not aa that the Monetary Board Resolution 408, UNCLAIMED BALANCES a) Deposits that have become dormant for a period ‘of 10 years’ may be escheated. in favor of the ‘government ») -REVIEWERON COMMERCIALLAW ach unclaimed balances, increase and proceeds thereof with the Treasurer of the Ph {redit of the Government of the Republic’ Fappinsobe seas the Cong ngs Unclaimed balances ~ include credits or, “Fmoney, bullion, security or other ev indebtedness of any kind, and interest dep of os at heen defer sn 5, LOAN FUNCTION OF BANKS 501 BASIC RULES/RESTRICTIONS (2002 Bar), ‘) A bank shall grant loans and other cus accommodations only in amounts and. iy the periods of time essential for the effin completion of the operations to be financed. b) Such grant of loans and other credit accomno. 3 with safe and sound is capable of fulfilling his coms bank. PAYMENTS: 1) Amortization schedule of bank loans ani other cre 1S shall te adapted to the nature of the operations att financed (Sec. 44, GBL} 502 The toll amount of tans ei »mmod. Slee of the bank provided the red by insurance DOSRI ACCOUNTS rangement by directors, cont nati 2 ‘A. Geer aking a (RA No Lav on Sey rps and Related os 4) Asgregate Ceilings. The Monetary Board may regulate the amount of loans, credit accommodations and guarantees that may be extended, directly or indirectly, by @ bank to its directors, officers, stockholders and their related interests, as. well as investments of such bank in enterprises ‘owned or controlled by said directors, officers, stockholders and. their related interests. The Manual of Regulations for Banks provides that the aggregate is 15% of the total Toan portfolio ofthe bank or 100% ‘of the combined capital accounts whichever ‘slower 5) Individual Ceilings. Te outstanding loans, credit accommodations and guarantees which 2 bank may extend to each of its stockholders, direc their related interests, shal an amount equivalent to tunencumbered deposits and book value of their paid-in capital contribution in the bank. b) It should be noted however that the ionot apply to loans, credit accom- and guarantees (1) secured by etary Board as non-rsk items, (2) under a fringe benefit plan approved by the BSP. and (3) extended by cooperative banks to its cooperative stockholders ©) RESTRICTIONS UNDER SECTION 26, NCBA. 1) The borrower shall be required by the are subject {otefaling the GBL: 2 or stockholders are required to make such waiver if they themselves are the borrowers. [REVIEWER ON COMMERCIALLAW The accounts are subject to ex tut any. information obtaineg examination of his deposits shall ye Stacy confidential and may be weg cxamines oly in connection ig Gl supervisory and examination respon tr by the Bango Sentral in an appre Iga acon it may iitate inlet deposit account. the 2» Anat f from ay, 503, COLLATERALS. ‘A. VALUE OF COLLATERALS Under the law, the loan shall not exceed 7h of the appraised value ofthe rel poy 60% of the appraised value per Phas (or 75% of the appraised value of the ch: Sp and 38, GBL). The collateral value cap oe fomeey iaulined by Ou Sestea aes increased in special cases. Under Secon X31 = the Manual of Regulations f thecal 60% cap on the cllateral valu of chattels ining intangibles, was removed. B. FORECLOSURE OF MORTGAGE (See 4, BL) a) Redemption Period 1) Redemption Period for Natura Persons ‘The mortgagor or debtor, whois a natural person, whose real property property. The one-year redemption counted from the tration of the certificate the Register of Deeds 7 A. Genera Banking Law (RA, No 891) Paetiy os Law on Seeyof Depo and eed Ls ») @ (See Sec. 113] of Supreme Court Cireular ‘A.M, No, 99-10-05, as further amended on ‘August 7, 2001). Redemption Period for Juridical Persons A juridical person, those pro- erty has been sold pursuant to an {xi rec hl have te Tight to redeem the property bu not ater the region of he cerifcate of foreclosure sale with the proper Reger of Deeds which in no cose Sha be more than three months ater foredosure, whichever i ealier (2007 Ban. Redemption rice Redemption may be exercised by ‘paying the amount due under the mortgage eed, ‘with interest thereon at the rate 2 specified in the mortgage, and all the costs, and expenses incurred by the bank or institution from the sale and custody of said property less the income derived therefrom (See. 47, GBL. Possession ‘The purchaser at the auction sale concerned whether in a judicial oF extrajudicial foreclosure shall have the right to enter upon and take possession of such property immediately after the date of the confirmation of the auction sale and ‘administer the same in accordance with law (bid) Injunction and Bond ‘Any petition in court to enjoin or res- train the conduct of foreclosure proceedings instituted pursuant to this provision shall be given due course only upon the fing by the 2 REVIEWER ON COMMERCIAL LAW SHARES Dirac scp stock or accept tov saa when authorized by ihe the tog, sicmany the time of is purchase on be sold or disposed of at a pul Prva (See. 10, GBL) (2012 Bar). 6, PROHIBITED ACTS OF BORROWERS (Sec. 55.2) No borrower ofa bank shall: Fraudulently overvalue property offered as security fo, loan or other credit accommodation from the bank, ee se ec eraraen nin or increasing @ ‘or other credit accommodation of nee asked heretics edb crotch ast es ere eae Offer any director, officer, employee or agentofabankany gift, fee, commission, or any other form of compensation in order to influence such persons into approving, loan ‘or other credit accommodation application (1985 Bar) 7. OWNERSHIP OF BANKS 7.01. FOREIGN OWNERSHIP 4) Individuals and non-banks (Sec. 11, GBL) 1) Foreign individuals and non-bank corpora: tions may own or control up to 40% of the Voting stock of a domestic bank. 702. o La A. law on Seem oD in ed a 2 foreign-owned voting be determined by the a5 than 50% ofthe voting tock ofthe Dae b) Foreign Banks th authority from ign banks may acquire ‘of an existing bank or 100% of the voting invest in up to 100% of subsidiary (R.A. No. 10641) ting stocks of anew FILIPINO STOCKHOLDINGS: a) Section 11 of the GBL provides that the rule — limiting ownership and control of the voting stock of a domestic bank to a maximum of 40% —shall apply to Filipinos and domesticnon-bank corporations. ») on foreign stockholdings equity participation, the os and domestic “‘non- to individual equity participation 103. STOCKHOLDINGS OF FAMILY GROUPS OR RELATED INTERESTS a) The law does not prohibit ownership ofthe stock ‘by members ofthe same family orrelated interests. REVIEWER ON COMMERCIAL LAW ») owned oF contceg by the same family group or same Me 2h nats at eae ed gTOUPS of perong a Unlike the former law, the GBL does not imps imit on the number of shares that can be owney by the same family or related interest lone this should be without prejudice to the any restriction imposed by Section Tl of the GB OWNERSHIP) PARTICULARS CEILING (a) Voting shares of stock of a foreign individual or a foreign non-bank corporation in: i, UBIKB and TB 40% 60% 40% 60% ares of stock of a] 100% foreign bank in UB, RB (@) Combined ownership of the| 100% voting shares of stock of] qualified foreign banks in UB, KB, TB and RB agtiy o ah Seal king am RA. No.0) en Sere of Depts and ltd as 8, DIRECTORS AND OFFICERS 8.01. COMPOSITION OF BOARD (Secs. 15 and 19, GBL) a) independent directors. b) An “independent director” shall mean a person. other than an officer or employee of the bank, its ©) Non Filipino citizens may become members of the board of directors of a bank to the extent of the foreign participation in the equity of said bank. 02. 8.03, [REVIEWERON COMMERCIAL LAW law provides that no appointive o¢ gy © Mae elfen whether fallime ey Ifa at the sme time serve as ofa, privat bank save it tes whee auch Bruen fo francal since pet the goverment of a. government owed controlled corporation t0 the bank or way." otherwise provided under existing laws,“ way of exception, Section 5 of he sank Aco 1982 proves at neu be std 5 poke trom eer? any epee MEETINGS ‘The meetings of the board of directors may by conducted through moder technologies such a¢ by notlintedto teleconferencing and video-conferencg (Sec. 15, GBL) (QUALIFICATIONS a) Fitand Proper Rule ind Proper Rule,” the Mone ized to pass rules providing il disqualification, of 9, REGULATIONS TO MAINTAIN LIQUIDITY AND SECURITY Certain regulatory provisions in the General Banking ‘Law as well as the New Central Bank Act are geared towards snAREY ao ‘A. Genera Banking Live (RA. No. 751) Law on Secrecy f Deposits and Rented Laws the purpose of maintaining liquidity and security, These regulations include those relating to loans and other matters: so. a) ») ‘The Monetary Board shall prescribe the minimum, ratio which the net worth of a bank must bear to its total risk assets which may include contingent accounts (Sec. 34, GBL) The law imposes limits on loans, credit accommo- dations and guarantees that may be extended by banks. Limitation is placed on the bank's exposure to directors, officers, stockholders, and their related. interest (DOSRI Accounts, See Sec. 36, GBL). ‘The law imposes restrictions on the value of collaterals on loans, ‘The Monetary Board may provide for restrictions ‘on unsecured loans (Se. 41, GBL). ‘The Monetary Board may prescribe the maturities and other terms and conditions for various types of loans and accommodations (Sec. 43, GBL). 1w provides restrictions on dividend tions (Sec. 57, GBL). jon by a bank is prohibited in the dividends will be greater than its imulated net profits then on hand, deducting therefrom its losses and bad debts (Sec. 57, GBLY; if its clearing account with the Bongko Sentral is overdrawn; or if it is deficient in the required liquidity floor for ,government deposits for five or more consecutive days; or doesnot comply with the liqui ratios prescribed by the Bangko rs) pure e 40. OWNERSHIP OF REAL PROPERTY ie ene a Eels 2 adaedultenenpedotinged uty | ») o [REVIEWER ON COMMERCIAL LAW posesof determining funds available for gi, declaration; oF ideng if it has committed a major violation determined by the Bangko Sentral, 2 may 4g eon, including, bank equ ne eye tk aay Board, the equity investment of a bank in ‘another erggetprimrly n e the banks te | GBL. acquire, hold or eon lowing ireumstances ‘way of security for debts; Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of iy dealings; or purchase at sales underjudgmens, ages or trust deeds held by it and purchase to secure debts dueit, Any real property acquired or held under the circumstances enumerated in the above paragraph shall be disposed of by the bank within ‘period of five years or as may be prescribed by the Monetary Board. After said period, the bank the property for its own A conan o nea Banking Law (RA, No. 881) Law on Secrecy of epee nd ated Las LOAN TO BANKS 3101. LOANS WITHOUT COLLATERAL ut any of providing liquidity (Sec. #3, NCI sometimes referred to as lender of last resort (2015 Bar) 11.02, EMERGENCY LOANS ‘The BSP, upon the approval of at least five members of the Monetary Board, may also grant emergency loans or advances in the amount not ‘exceeding 50% of the bank's total deposits and deposit Substitutes, The loans shal be released in two or mer tranches (Se. 84, NCBA, as amended by R.A. No, T 42, CONSERVATORSHIP (Sec. 29, NCBA) 3201. GROUNDS — whenever, on the basis of a report submitted by theappropriate supervising or examining department, the Monetary Board finds that ddeemed adequate to protect the interest of and creditors, the Monetary Board may appoint a conservator with such powers a the Monetary Board shall deem necessary: "The conservatorship shall not exceed one year (1982 and 2006 Bar. 1202, POWERS OF CONSERVATOR ‘The powers that_may be conferred to the conservator are such powers as may be necessary for the following purposes: a) To take charge of the asses, li ‘management ofthe subject b sand the b) To reorganize the management of the subject bank; ©) Tocollectall moniesand debts duesaid institution; and vy « semmehicnamcal Ur I | PARTIV hea See ‘The receiver shall. : Theses eerie eerlpowersoa a . under th Revised Rule of Cour, 43, RECEIVERSHIP AND LI (See. 30, Noaay | ©) Thereceiver shai! nor, GROUNDS _ tetra gt {te PONG, 0 statutory rectiver ofa ala ofthe ba be appointed and directed fo proceed with hay ay ae erever upon report of the head of the x atiog serve pen wr ol he oh that the bank (1997 Bar}: "Board fine a) Has notified the BSP or announced a nj osure, or has been dormant for gg qtal ‘suspended payment ofits depo: a to pa is Unbites 35 they Become de) | 44) To exerts all powers necessary bank's viability. £0 resto ») RA. No, 3591, as specific powers of PDIC as RA, No. 3591, as amended, sn0s/[CLOSE-Now.nEAR-aTER SCHEME ue in ordinary course of business/éxcept ifthe int |_| {> pay is caused by ectraordinary aaa | | induced by financial panic in’ the community Tain} b) Has insufficient realizable asset, as deter Eee BP, tomeetisliabilies or 6) Cannot continue in business without in Probable loses tots depositors or redtonree® Has willfully violated a cease and desist NCBA as ar ae 2) There will be no preference even ifthe claimant- depos ined a writ of preliminary attachment. After the declaration of insolvency, the remedy ofthe depositors isto intervene inthe liquidation proceedings (Provident Savings Bankv 22 SCRA 125 3) On the corporate franchise or existence. Upon placement by the Monetary Board ofabankunder EVIEWERON COMMERCIAL LAW liquidation, i shall continue as a body co, tun the termination of the pha i) Such continuation as a body : shall only be for the purpose of liq gp a) sent the ck alleases by or agains the closed bre prosecute and defend suits by or apart Inno case shall the bank be reopens tt permite resume banking business at Being paced under liquidation (Se ge, Rea No 3591 as amen (On the powers and func rights, functions and duties, as well ay i allowances, remuneration and perquisites ofthe directors, oficers, and stockholders of the bank ae terminated upon its closure. Accordingly the directors, officers, and stockholders. shat o A. Genera Banking Lae (A, No $791) Law on Secrecy of Depo and Related Laws 6). On labor relations. Notwithstanding the | provisions of the Labor Code, | employee relationship between the closed bank | and its employees shall be deemed terminated "upon service of the notice of closure ofthe bank in accordance with the PDIC Law. Pay | separation pay or benefits provided for by | shall be made from available assetsof the | inaceordance with the Rules on Concurrence and Credits under the Civil Code or obligations. The receiver may cancel, 8) On intrest payment. ‘at zy inert on depos anda ter obgatons eer eosure shal ce upon ts cosure by the Monetary Board without pre #0 the Sst poragiaph of Secon #5 of Wa. No. 753 (he ewrCantal Bank Ac. The receiver shal ave pendent appa for penalties and surcharges for late payment and nonpayment of taxes. From the sure, the closed bank shall not be liable ‘and surcharges Ft 3. 05, REVIEWER ON COMMERCIAL LAW 10). Bank charges and fees on services The as amended by RA. No, ay ee ae Sled it executory and may nt be restrained Cha a ot nln ea by the court & ‘on petition for certiorari on closure, such 25 ut tothe the ground that te aca inten to ores of of pertinent deeds and ce oy jurisdiction or with such grave abuse of discretion 11) Actions pending 7 or aainat the closed ba as to amount to lack or excess of jurisdiction. Escept for actions pending the Supra ‘The petition for certiorari may only be filed ‘Court, actions per the tee by the stockholders of record representing, the ‘bank in lal body, shal ‘majority of the capital stock within 10 days from open re suspen by the board of directors ofthe institution reer ays and ree ofthe order directing receivership, liquidation ot tormandatory mediation. Upon termingge conservatorship the mediation the ase shal be rene 4 ©) Ground Grave sbuseof discon + to the court oF quasijudicial body for fue na The power and authority ofthe Monetary 1 tdi md he day er eer aed eae etait decision of police power of the Stat fr unreasonably. ther capricious, 3, unjust, or is tantamount to denial of due process and equal party shal file the final deeiion« the on court and sete i, with the Rules on Concucrence foene of res under the Co protection cuss of the Cotton Cota he a the Civil Code Bank CA 10 SCRA 14; Bone Flo Scigs Be appre ioe a cceey bead oo See 13) Docket and other court fees. Payment of docket 747) and other court fes: ©) Who may question 30 of the NCBA provides that the ioari may only be filed by the case of unfavorable | «judgment, such fees shall be paid as liquidation costs and expenses during the distribution of the assets of the closed bank (Ibid) receiver of the conservator that was ‘14, TRUST OPERATIONS OF BANKS M0, Prioe authority — A tank may be authorized by ‘Board to engage in trust business sinister any trust or hold property in trust or on deposit forthe use, benefit, 2) Remedy nde Seton 30 NCBA The actin ofthe Mert Bd | under Section 30 or under Section 29 ofthe NCBA, M02 1403. vA REVIEWER ON COMMERCIAL LAW cor behoof of thers (St. 79, GBL). The Secu uange Commision shall nt register tea incorporation and bylaws or any amendmen fe of any trast entity, uss acompanied bya etary el yh BS ei Trust Business — Any activity trustortrustee relationship (trustee the appointment of a trustee by a tre ing, management of me a) A. trustlicensed bank may involved in other fiduciary business which fy Y also. by err a me ee guardianship adminisrtorship or wil, ropes {Stats exectorshp, receivership, and ote et Serves which dont eater res n a te (bi, par.) POWERS OF TRUST ENTITY A trast entity, in addition to the general powers incident to corporations, shall have the power te a) _Actastrusteeon any mortgage or bond issuedby any municipality corporation, or any body polite and to accept and execute any trust content with law; 8) Act under the order oF appointment of any cout 42s guardian, receiver, trustee, or depositary ofthe estate of any minor or and asreceiverand di into court by partes to any legal proceedings and ‘of property of any kind which may be brought ‘under the jurisdiction of the court; 9) Actas the executor of any will when itis named the executor thereof; 1404. 18. THE BANGKO SENTRAL NG PI 1501. 15.02. cent aglSEY ra Banking Law (RA. No.9) Law on Ser of Depo and Rast a 4) Actas administrator of the estate of any deceased the will annexed, of as administrator te of any deceased person when there is, “ €) Accept and execute any trust for the hold management, and administration of any estate, real ot personal, and the rents, issues and profits thereof; and Establish and manage common trust funds, subject to such rules and regulations as may be prescribed by the Monetary Board. SEPARATION OF TRUST BUSINESS OF BANKS ‘The law prohibits the integration ofthe properties and funds ofall the oer bustesses of the bank wh those of the trust busines. The trust business and all funds, properties or securities received by any entity as executor, administrator, guardian, truste, receives, or depositary shall be Kept separate and distinct from the general business including all other funds, properties, and assets of such trust entity. The accounts of all such funds, properties, or securities shall likewise be kept separate and distin accounts of the general business of the trust entity (Sec. 87, GBL). ‘The Bangko Sentral ng jon and operate as an accountable body corporate in the ‘mandated respon oy Vv REVIEWER ON COMMERCIAL LAW ») Basic Functions: The BSP — Pre at iene ag 2) fon ot Be pg ee poner sn os 4) Has the sole power and authority of the Philippines; Public See erento foi ele (6) Has the power to investigate, make anes, conduct searches and seizure forthe purpos of maintaining the integrity ofthe cure Has the power toengagein foreign exchange transactions in order to maintain pegs ower to make rediscoun discounts, loans a objectives of price st 9) Has the power to engage in open matlet ‘operations — purchase and sale of securities ‘objective of achieving price stability; ‘Actas the banker of the government; power to engage in marketing and ion of securities for the account of smment; and ct as the financial advisor of the gover ment 2) 1503. 15.04. Parry A General Banking Law (RA. Ne WonSerery ol irene ten, Law on Secs of Deposits and Raed Las CORPORATE POWERS ‘The BSF isa governmentowned and controled corporation that is invested by law with corporate powers (Sec. 1, NCBA). The corporate powers specified inSection 5 ofthe New Central Bank Act area follows: rand use a corporate seal ly noticed; Se oF own real and personal property; otherwise dispose ofits eal and personal property; tosue and be sued; to perform any and all things that may be ‘necessary or proper to carry out the purposes Of the New Central Bank Act; and p 8) tocompromise, condone orrelease, in whole or in part any claim for ste abit BANK SUPERVISION Operations and activites of barks shall be subject to supervision of the Bangho Sentral (Busuego v. CA, 4394 SCRA 473). Section 4 ofthe GBL provides that “supervision” shall include the following: a) Issuance of rules of conductor the establishment standards of operation fo banking and financial ») wholly owned or control Note: The PDIC may also conduct a regular ‘annual examination upon prior approval of the (MB (Sec. 6{81, R.A. No. 3591 as amended by R.A, Special Examination without-prior MB approval may bemade by PDIC there ian Fmnpending bank Gosire (PIC Rey. No. 209-5) ©) Overseeing to ascertain that laws and regulations are complied with; 15.8. 15.06. REVIEWER ON COMMERCIALLAW Regular investigation which shall not thanoneea yar fom the at date of exe todetermine whether an institution igo, itsbusines ona safe or sound basi hy €) Inquiring into the solvency and liquia institution or "Oe 4) Enforcing prompt corrective ation BANKER AND FINANCIAL ADVISOR 0, ERNMENT a) The BSP ie designated the ofl deosiy F Coy, a eee NCBA). is ‘erent nae

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