RA 7653, as amended by RA 11211

I. Operations
a. Section 25, Supervision and Examination

Section 25:The Bangko Sentral shall have supervision over and conduct regular or special examination of banking institution and
quasi-bank including their subsidiaries and affiliates engaged in allied activities.

For purpose of this section a subsidiary means a corporation more than fifty percent of the voting stock of which is
directly or indirectly owned controlled or held with power to vote by a corporation the voting stock of which , to the extent of fifty
percent or less, is owned by a bank or quasi-bank or which is related or linked directly or indirectly to such institution or intermediary
through common stockholders or such other factors as may be determined by the Monetary board.

The bangko sentral shall have regulatory authority over, and conduct regular or special examinations of entities which
under this act or by special laws are subject to its jurisdiciton. The Bangko Sentral shall establish the mechanism for issues arising
from bank examination. It shall be independent and reports directly to the Monetary Board without prejudice to the authority of the
Bangko Sentral and its Monetary Board to take enforcement and supertvisory actions against supervised entites.

The department heads and the examiners of the supervising and or examining departments are hereby authorized to
administer oaths to any director, officer or employee of any institution under their respective supervision or subject to their
examination and to compel the presentation of all books, documents, papers or record necessary in their judgment to ascertain the
facts relative to the true condition of any institution as well as the books and records of persons and entities relative to or in
connection with the operations, activities or transactions of the institution under examination subject to the provision of existing laws
protecting or safeguarding the secrecy or confidentially of bank depost as well as investment of private persons, natural or juridical
in debt instrument issued by the Government.

“ No restraining order or injunction shall be issued by the court enjoined the Bangko Sentral from examining any institution
subject to supervision or examination by the Bangko Sentral, unless there is a convincing proof that the actino fo Bangko
Sentral is plainly arbitrary and made in bad faith and the petitioner or plaintiff files with the clerk or judge of the court in which the
action is pending a bond executed in favor of the Bangko Sentral, in an amount to be fixed by the court. The provision of Rule 58 of
the NEW Rules of Court insofar as they are applicable and inconsistent with the provision of this section shall govern the issuance
and dissolution of the restraining order or injunction contemplated in this section.

i. Borlongan v. Reyes GR No.161276, January 31, 2005

Doctrine:

The monetary board can execute measures without the need of prior hearing, it may prohibit the institution from doing
business here in the Philippine and designate PDIC as receiver. Xxxx a. In cases where the banks or the quasi banks are unable to
pay liabilities as they become due in the ordinary couse of business, this does not cover those extraordinary demands in the
banking community

Facts:

The petitioner Teodoro Borlongna assailed the decision of the court of appeals which declared the respondent guilty of
simple neglect of duty. The petitioner Teodoro Borlongan is the former president and chief executive officer of Union bank was
administratively charged respondent for falsifying statement of facts in the supervision and examination section. The petitioner
through a petition for review questioned the ruling of the ca, the absolution of the BSP governor and general counsel from his
affidavit complaint and sought a graver imposition of penalty against the respondent. The petitioner filed a petition for review on
certiorari this time assailing the decision of the CA.

Issue: Whether there is gross nor simple neglect of duty by the acts of the respondent.

Held:

No. The reports that were made by the respondent and submitted to the Monetary Board were merely haphazardly done
and that they were merely in recommendatory in character ( they were alleging that because of these “ false reports” the bank was
placed under receivership.The reports merely indicate the long years of monitoring by the BSP of a problem bank. The data
provided that UBI had been monitored by BSP for years. UBI had already given up its status as an expanded commercial bank and
reverted to ordinary commercial bank because it could not meet their 3.5 billion minimum capital for a universal bank. Therefore,
section 30(a) of RA 7653, provides that the monetary board can execute measures without the need of prior hearing: ( it may
prohibit the institution from doing business here in the Philippines and designate PDIC as its reciver

Xxxx a. In cases where the banks or the quasi banks are unable to pay liabilities as they become due in the ordinary couse of
business, this does not cover those extraordinary demands in the banking community
RA 7653, as amended by RA 11211

Sec.  30. Proceedings in Receivership and Liquidation. -Whenever, upon report of the head of the supervising and
examining department, the Monetary Board finds that the Bank or quasi-bank:

(a)     is unable to pay its liabilities as they become due in the ordinary course of business: Provided, that this shall not
include inability to pay caused by extraordinary demands induced by financial panic in the banking community;

(b)     has insufficient realizable asset, as determined by the Bangko Sentral to meet its liabilities; or

(c)     cannot continue in business without involving probable losses to its creditors; or

(d)     has willfully violated a cease and desist order under Section 37 that has become final, involving acts or transactions
which amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily
and without need for prior hearing forbid the institution from doing business in the Philippines and designate the
Philippine Deposit Insurance Corporation as receiver of the Banking institution. xxx. (Emphasis supplied).

b. Section 25.A

"Sec. 25-A. Authority to Approve Transfer of Shares.— Transfers or acquisitions, or a series thereof, of at least ten percent (10%) of
the voting shares in banks or quasi-banks shall require the prior approval of the Bangko Sentral. The selling or conveying
stockholder shall submit such transfer or acquisition for approval by the Bangko Sentral within such period as may be prescribed by
the Monetary Board. In approving such transfers or acquisitions, regard shall be given by the Bangko Sentral to the fitness of the
incoming stockholders as may be indicated in their integrity, reputation and financial capacity. Without Bangko Sentral approval,
no such transfer or acquisition shah have legal effect nor shall the same be recognized in the books of the institution or by
any government agency, and the transferor-stockholders shall remain accountable and responsible therefor. Transfer of actual
control or management of the institution to the new stockholders or their representatives prior to Bangko Sentral approval shall
make the transferor, the transferee and any person responsible therefor liable under Sections 36 and 37 of this Act. Notwithstanding
any provision of law to the contrary, the Bangko Sentral may share with the Philippine Deposit Insurance Corporation any
information that the Bangko Sentral may obtain pertaining to transfer or acquisition of shares or series of transfers or acquisition of
shares in banks and quasi-banks."

c. Section 28, Examination and Fees

"Sec. 28. Examination and Fees. - The supervising and examining department head, personally or by deputy, shall examine the
operations of every bank and quasi-bank, including their subsidiaries and affiliates engaged in allied activities, and other entities
which under this Act or special laws are subject to Bangko Sentral supervision, in accordance with the guidelines set by the
Monetary Board taking into consideration sound and prudent practices: Provided, That there shall be an interval of at least twelve
(12) months between regular examinations: Provided, further, That the Monetary Board, by an affirmative vote of at least five (5)
members, may authorize a special examination if the circumstances warrant.

"The institution concerned shall afford to the head of the appropriate supervising and examining departments and to his
authorized deputies full opportunity to examine its books and records, cash and assets and general condition and review
its systems and procedures at any time during business hours when requested to do so by the Bangko Sentral: Provided,
however, That none of the reports and other papers relative to such examinations shall be open to inspection by the public
except insofar as such publicity is incidental to the proceedings hereinafter authorized or is necessary for the prosecution
of violations in connection with the business of such institutions.

"Supervised institutions shall pay to the Bangko Sentral, no later than May 31 of each year, an annual supervision fee as may be
prescribed by the Monetary Board. In determining the amount of the annual supervision fee, the Monetary Board shall consider the
costs of supervision.

d. Section 29. Conservatorship: Restrore viability ( act as the steward of the propert)

SECTION 29. Appointment of Conservator. — Whenever, on the basis of a report submitted by the appropriate
supervising or examining department, the Monetary Board finds that a bank or a quasi-bank is in a state of continuing
inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of
depositors and creditors, the Monetary Board may appoint a conservator with such powers as the Monetary Board
shall deem necessary to take charge of the assets, liabilities, and the management thereof, reorganize the management,
collect all monies and debts due said institution, and exercise all powers necessary to restore its viability. The conservator
shall report and be responsible to the Monetary Board and shall have the power to overrule or revoke the actions of the
previous management and board of directors of the bank or quasi-bank.
RA 7653, as amended by RA 11211

The conservator should be competent and knowledgeable in bank operations and management. The conservatorship
shall not exceed one (1) year.

The conservator shall receive remuneration to be fixed by the Monetary Board in an amount not to exceed two-thirds
(2/3) of the salary of the president of the institution in one (1) year, payable in twelve (12) equal monthly
payments: Provided, That, if at any time within one-year period, the conservatorship is terminated on the ground that the
institution can operate on its own, the conservator shall receive the balance of the remuneration which he would
have received up to the end of the year; but if the conservatorship is terminated on other grounds, the conservator shall
not be entitled to such remaining balance. The Monetary Board may appoint a conservator connected with the Bangko
Sentral, in which case he shall not be entitled to receive any remuneration or emolument from the Bangko Sentral during
the conservatorship. The expenses attendant to the conservatorship shall be borne by the bank or quasi-bank concerned.

The Monetary Board shall terminate the conservatorship when it is satisfied that the institution can continue to operate on
its own and the conservatorship is no longer necessary. The conservatorship shall likewise be terminated should the
Monetary Board, on the basis of the report of the conservator or of its own findings, determine that the continuance in
business of the institution would involve probable loss to its depositors or creditors, in which case the provisions of
Section 30 shall apply.

e. Section 30, Receivership- no need- WALA NA MAG RESTORE ( purpose is to dispose of the
property) PDIC

"Sec. 30. Proceedings in Receivership and Liquidation. - Whenever, upon report of the head of the supervising or examining
department, the Monetary Board finds that a bank or quasi-bank:

"(a) has notified the Bangko Sentral or publicly announced a unilateral closure, or has been dormant for at least sixty (60) days
or in any manner has suspended the payment of its deposit/deposit substitute liabilities, or is unable to pay its liabilities as they
become due in the ordinary course of business: Provided, That this shall not include inability to pay caused by extraordinary
demands induced by financial panic in the banking community;

"(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or

"(c) cannot continue in business without involving probable losses to its depositors or creditors; or

"(d) has willfully violated a cease and desist order under Section 37 of this Act that has become final, involving acts or transactions
which amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily and
without need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit
Insurance Corporation (PDIC) as receiver in the case of banks and direct the PDIC to proceed with the liquidation of the closed bank
pursuant to this section and the relevant provisions of Republic Act No. 3591, as amended. The Monetary Board shall notify in
writing, through the receiver, the board of directors of the closed bank of its decision.

"The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and executory and may not
be restrained or set aside by the court except on petition for certiorari on the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. The petition
for certiorari may only be filed by the stockholders of record representing the majority of the capital stock within ten (10) days from
receipt by the board of directors of the institution of the order directing receivership, liquidation or conservatorship. The designation
of a conservator under Section 29 of this Act or the appointment of a receiver under this section shall be vested exclusively
with the Monetary Board. Furthermore, the designation of a conservator is not a precondition to the designation of a receiver.

"The authority of the Monetary Board to summarily and without need for prior hearing forbid the bank or quasi-bank from doing
business in the Philippines as provided above may also be exercised over non-stock savings and loan associations, based on the
same applicable grounds. For quasi-banks and non-stock savings and loan associations, any person of recognized competence in
banking, credit or finance may be designated by the Bangko Sentral as a receiver."
RA 7653, as amended by RA 11211

Central Bank v. Triumph CA, GR 76119, Mar 30, 1993 * AMMENDED NA

Doctrine: The central bank is vested with the authority to asses, evaluate and determine the condition of any bank after
finding is insolvent. Prior notice and hearing is not necessary in a closure of the bank . amended no need Central Bank.

Facts

Based on the reports that was submitted by the Supervision and Examination sector of central bank, the financial
condition of TSB is one of insolvency and its continuance of the business would just result to a loss to its depositors or creditors.
The monetary board issued on May 31 ordering the closure of the TSB forbidding it from doing busines in the Philippines and
placing the same under receivership.

TSB later filed a complaint, challenging the constitutionality of section 29 since it authorizes the central bank to take over
a banking institution even though it is not charged with the violation of any laws and regulations.

Issue: Whether the absence of prior notice and hearing may be considered as a bad faith on the part of the monetary board
from doing business under receivership.

Ruling

No. Under section 29 of RA 265, the central bank is vested with the exclusive authority to assess, evaluate and determine
the condition of any bank, after finding that the bank is insolvent, or that its continuance of its business would involve probable loss
to its depositors or creditors. Forbid the bak or non-bank financial institutions to do business in the Philippines and shall designate
an official of the CB or other competent person as a receiver to immeditaley take charge of the assets and liabilities.

Section 29 does not contemplate prior notice and hearing before a bank may be directed to stop operation and placed
under receivership par 4 provides for the filling of a case within 10 days after the receiver takes charge of the assets of the bank.
Itmeans that prior to filing a case, the bank can close .It is not within the intention of the lawmakers to authorize the no prior
notice and hearing in the closure of the bank and at the same time annul it on the absence thereof.

Therefore,, section 29 does not altogether divest a bank or a non bank financia institution placed or receivership of the
opportunity to be heard and present evidence on the arbitrariness and bad faith because within ten days from the date the receiver
takes charge of the asset of the bank he may file a case under the court. Which is present in this case when TSB filed a complaint in
QC- ( Close Now Hear Later- practical and legal consideration to prevent unwarranted dissipation of the bank’s asset and as a valid
exercise of police power to protect the depositors , creditors and the general public

i. jRural Bank of San Miguel v. MB, GR 150886, Feb 16, 2007

There is no question that under Section 29 of the Central Bank Act, the following are the mandatory requirements to be complied
with before a bank found to be insolvent is ordered closed and forbidden to do business in the Philippines: Firstly, an examination
shall be conducted by the head of the appropriate supervising or examining department or his examiners or agents into
the condition of the bank; secondly, it shall be disclosed in the examination that the condition of the bank is one of insolvency, or
that its continuance in business would involve probable loss to its depositors or creditors; thirdly, the department head concerned
shall inform the Monetary Board in writing, of the facts; and lastly, the Monetary Board shall find the statements of the department
head to be true

Facts

The petitioner Rural Bank was a domestic corporation that is engaged in banking, it started operation in 1962 and by the
year 2000. It now has 15 branches. The respondent Monetary board later issued a resolution which prohibited RBSM from doing
busines in the Philippines placing it under receivership with PDIC as the receiver.

RBSM was arguing that Resolution 105 is not valid and berifit of any legal basis because no complete examination had
been conducted before it was issued.

Issue: Whether section 30 o RA 7653 ( Central bank act) and applicable jurisprudence require a current and complete examination
of a bank before it can be placed under receivership

Ruling:

No. The monetary board may summarily and without the need for prior hearing forbid the institution from doing business in
the Philippines and designate the PDIC as receiver. In the new central bank, what was required was only a report of the head of
the supervising or examining department is necessary. Examination is not synonymous with a report. Report is defined as
something that gives information or a usually detailed account or statement, An examination of the other hand is a search,
investigation or scrutiny. Therefore, RA 7653 no longer requires that an examination be made before the monetary board can issue
a closure order.
RA 7653, as amended by RA 11211

Banco Filipino Savings and Mortgage Bank v MB, GR No. 70054, Dec 11, 1991*

Doctrine: Pendency of the case did not diminish the powers and authority of the designated liquidator to effectuate and
carry on the administration of the bank. In the instant case, the basic standards of substantial due process were not
observed.
Section 29 of the Republic Act No. 265, as amended known as the Central Bank Act, provides that when a bank is forbidden to
do business in the Philippines and placed under receivership, the person designated as receiver shall immediately take
charge of the bank’s assets and liabilities, as expeditiously as possible, collect and gather all the assets and administer
the same for the benefit of its creditors, and represent the bank personally or through counsel as he may retain in all
actions or proceedings for or against the institution, exercising all the powers necessary for these purposes including, but not
limited to, bringing and foreclosing mortgages in the name of the bank.

 Facts:    Top Management Programs Corporation and Pilar Development Corporation are corporations engaged in the
business of developing residential subdivisions.Top Management and Pilar Development obtained several loans from
Banco Filipino all secured by real estate mortgage in their various properties in Cavite.
The Monetary Board by Ramon Tiaoqui, Special Assistant to the Governor and Head, SES Department III submitted a
report finding that the bank is insolvent and recommending the appointment of a receiver.    The Monetary Board, based
on the Tiaoqui report, issued a resolution finding Banco Filipino insolvent and placing it under receivership.
Subsequently, the Monetary Board issued another resolution placing the bank under liquidation and designated
a liquidator. By virtue of her authority as liquidator, Valenzuela appointed the law firm of Sycip, Salazar, et al. to
represent Banco Filipino in all litigations.

Banco Filipino filed the petition for certiorari questioning the validity of the resolutions issued by the Monetary Board
authorizing the receivership and liquidation of Banco Filipino.A temporary restraining order was issued enjoining the
respondents from executing further acts of liquidation of the bank. However, acts and other transactions pertaining to
normal operations of a bank are not enjoined. Subsequently, Top Management and Pilar Development failed to pay their
loans on the due date. Hence, the law firm of Sycip, Salazar, et al. acting as counsel for Banco Filipino under
authority of the liquidator, applied for extra-judicial foreclosure of the mortgage over Top Management and Pilar
Development’s properties. Thus, the Ex-Officio Sheriff of the Regional Trial Court of Cavite issued a notice of extra-
judicial foreclosure sale of the properties. Top Management and Pilar Development filed 2 separate petitions for injunction
and prohibition with the respondent appellate court seeking to enjoin the Regional Trial Court of Cavite, the ex-officio
sheriff of said court and Sycip, Salazar, et al. from proceeding with foreclosure sale which were subsequently dismissed
by the court. Hence this petition

Issue:    1) Whether or not the liquidator has the authority to prosecute as well as to defend suits and to foreclose
mortgages for and behalf of the bank while the issue on the validity of the receivership and liquidation is still pending
resolution.

            2) Whether or not the closure of the bank based on the Tiaoqui report is correct.

Held:   

1) Whether or not the liquidator has the authority to prosecute as well as to defend suits and to foreclose mortgages for
and behalf of the bank while the issue on the validity of the receivership and liquidation is still pending resolution.

Section 29 of the Republic Act No. 265, as amended known as the Central Bank Act,  provides that when a bank is
forbidden to do business in the Philippines and placed under receivership, the person designated as receiver
shall immediately take charge of the bank’s assets and liabilities, as expeditiously as possible, collect and gather
all the assets and administer the same for the benefit of its creditors, and represent the bank personally or
through counsel as he may retain in all actions or proceedings for or against the institution, exercising all the
powers necessary for these purposes including, but not limited to, bringing and foreclosing mortgages in the name of the
bank. If the Monetary Board shall later determine and confirm that banking institution is insolvent or cannot resume
business safety to depositors, creditors and the general public, it shall, public interest requires, order its liquidation and
appoint a liquidator who shall take over and continue the functions of receiver previously appointed by Monetary
Board. The liquid for may, in the name of the bank and with the assistance counsel as he may retain, institute such
actions as may necessary in the appropriate court to collect and recover a counts and assets of such institution or defend
any action ft against the institution.
RA 7653, as amended by RA 11211

Pendency of the case did not diminish the powers and authority of the designated liquidator to effectuate and carry on the
administration of the bank. The Court did not prohibit however acts a as receiving collectibles and receivables or paying
off credits claims and other transactions pertaining to normal operate of a bank. There is no doubt that the prosecution of
suits collection and the foreclosure of mortgages against debtors the bank by the liquidator are among the usual and
ordinary transactions pertaining to the administration of a bank.

ii. Banco Filipino Savings and Mortgage Bank v. BSP and the MB, GR No. 200678, June 4,
2018

A closed bank under receivership can only sue or be sued through its receiver, the Philippine Deposit Insurance Corporation (PDIC).
Hence, the petition filed by the petitioner bank which has been placed under receivership is dismissible as it did not join PDIC as a
party to the case.

FACTS Petitioner bank has been placed under receivership when it filed a Petition for Certiorari with the Supreme Court. Said
Petition was assailed by the respondent that contended that the same should be dismissed outright for being led without Philippine
Deposit Insurance Corporation's authority. It asserts that petitioner was placed under receivership on March 17, 2011, and thus,
petitioner's Executive Committee would have had no authority to sign for or on behalf of petitioner absent the authority of its
receiver, Philippine Deposit Insurance Corporation. They also point out that both the Philippine Deposit Insurance Corporation
Charter and Republic Act No. 7653 categorically state that the authority to file suits or retain counsels for closed banks is vested in
the receiver. Thus, the verification and certification of non-forum shopping signed by petitioner's Executive Committee has no legal
effect.

ISSUE Whether or not petitioner Banco Filipino, as a closed bank under receivership, could file this Petition for Review without
joining its statutory receiver, the Philippine Deposit Insurance Corporation, as a party to the case.

RULING A closed bank under receivership can only sue or be sued through its receiver, the Philippine Deposit Insurance
Corporation. Under Republic Act No. 7653, when the Monetary Board finds a bank insolvent, it may "summarily and without need for
prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation
as receiver of the banking institution." The relationship between the Philippine Deposit Insurance Corporation and a closed bank is
fiduciary in nature. Section 30 of Republic Act No. 7653 directs the receiver of a closed bank to "immediately gather and take charge
of all the assets and liabilities of the institution" and "administer the same for the benefit of its creditors." The law likewise grants the
receiver "the general powers of a receiver under the Revised Rules of Court."

Under Rule 59, Section 6 of the Rules of Court, "a receiver shall have the power to bring and defend, in such
capacity, actions in his [or her] own name." Thus, Republic Act No. 7653 provides that the receiver shall also "in the of the
institution, and with the assistance of counsel as [it] may retain, institute such actions as may be necessary to collect and recover
accounts and assets of, or defend any action against, the institution." Considering that the receiver has the power to take charge of
all the assets of the closed bank and to institute for or defend any action against it, only the receiver, in its fiduciary capacity, may
sue and be sued on behalf of the closed bank. When petitioner was placed under receivership, the powers of its Board of Directors
and its officers were suspended. Thus, its Board of Directors could not have validly authorized its Executive Vice Presidents to file
the suit on its behalf. The Petition, not having been properly verified, is considered an unsigned pleading. 124 124 A defect in the
certification of non-forum shopping is likewise fatal to petitioner's cause. 125 125 Considering that the Petition was led by
signatories who were not validly authorized to do so, the Petition does not produce any legal effect. Being an unauthorized pleading,
this Court never validly acquired jurisdiction over the case. The Petition, therefore, must be dismissed

General Bank and Trust Company v. Central Bank, GR 152551, June 15, 2006

Facts

The bank in this case cannot be expected to generate enough funds to meet the payment of its obligation, hence the bank
is to be considered as insolvent. In this case, Genbank was totally aware of the predicament thati t has gotten itself into and the
condition in which the central bank governor has imposed to address the situation for the protection of the depositor. Without the
proof that the central bank’s mandate as administrator of the banking system is within abuse and discretion the court cannot
interfere with the exercise of the Central Bank of its mandate as administrator of the banking system.
RA 7653, as amended by RA 11211

UCPB v. Ganzon, GR Nos. 168859 and 168897, June 30, 2009

Doctrine

Yes. Section 30 of RA 7653, the order of the monetary board regarding the liquidation of the bank
can be questioned by petition through certiorari before the court when the same was issued due to grave abuse of discretion and
lack of ecess jurisdiction .This would mean that the decision issued by the BSP monetary board in administrative cases may be
appealed to the CA within the period and manner as provided under the civil code. The CA has appellate jurisdiction over final
judgment, orders and resolution by the monetary board in administrative cases against banks and their directors, officers etc.

Facts:

UCPB seeks for the reversal of the decision of the C,A, . EGI on the other hand is a corporation that is duly
organized under the laws of the Philippines and is engaged in real estate transaction. It prays for the court to review the
decision and order the court to direct BSP to impose applicable sanctions against UCPB. ( basically it wants the monetary
board to investigate the alleged unsound dealings with EGI). UCPB and EGI entered into an agreement wherein EGI
mortgaged a said land to UCPB, when EGI defaulted, UCPB brought up the idea of allegedly foreclosing the property.

The mortgage properties was subsequently foreclosed, however during the signing of the transaction paper,
EGI Senior Vice President noticed that the papers stated in the remaining loan balance was increased, this increased was
allegedly due to the transaction cost. EGI complained regarding this increase, however no further action was taken. EGI
later asked for the alleged overpayment.

EGI later wrote an administrative complaint on BSP monetary board, which was later dismissed, there was later
an appeal to the CA, UCPB alleged that the appeal to the CA is without any jurisdiction because CA does not ahave
appellate jurisdiction over decisions, orders and resolutions of the BSP monetary board.

Issue

1. Whether the CA has appellate jurisdiction over the case of the monetary board

Yes. Section 30 of RA 7653, the order of the monetary board regarding the liquidation of the bank
can be questioned by petition through certiorari before the court when the same was issued due to grave abuse of discretion and
lack of ecess jurisdiction .This would mean that the decision issued by the BSP monetary board in administrative cases may be
appealed to the CA within the period and manner as provided under the civil code. The CA has appellate jurisdiction over final
judgment, orders and resolution by the monetary board in administrative cases against banks and their directors, officers etc.

The dismissal in this case by the monetary board was with grave abuse of discretion because the monetary board
merelyp resented conclusion without bothering to explain the basis for the same. The BSP disregarded the findings of fact and not
supported by substantial evidence, the court can make its own independent evaluation of the facts.

iii. Vivas v. MB, GR 191424, August 7, 2013

Facts :

The Rural Bank of Faire, Incorporated (RBFI) was a duly registered rural banking institution with principal office in Centro
Sur, Sto. Niño, Cagayan. Record shows that the corporate life of RBFI expired on May 31, 2005. Notwithstanding, petitioner Alfeo D.
Vivas (Vivas) and his principals acquired the controlling interest in RBFI sometime in January 2006. At the initiative of Vivas
and the new management team, an internal audit was conducted on RBFI and results thereof highlighted the dismal
operation of the rural bank. In view of those findings, certain measures calculated to revitalize the bank were allegedly
introduced.2 On December 8, 2006, the Bangko Sentral ng Pilipinas (BSP) issued the Certificate of Authority extending the
RA 7653, as amended by RA 11211

corporate life of RBFI for another fifty (50) years. The BSP also approved the change of its corporate name to EuroCredit
Community Bank, Incorporated, as well as the increase in the number of the members of its BOD, from five (5) to eleven (11). 3

BSP conducted a general examination on ECBI with the cut-off date of December 31, 2007. Shortly after the completion
of the general examination, an exit conference was held on March 27, 2008 at the BSP during which the BSP officials and
examiners apprised Vivas, the Chairman and President of ECBI, as well as the other bank officers and members of its BOD, of the
advance findings noted during the said examination. The ECBI submitted its comments on BSP’s consolidated findings and risk
asset classification through a letter, dated April 8, 2008. BSP later cancelled the rediscounting line of the bank. Thereafter, the
Monetary Board (MB) issued Resolution No. 1255, dated September 25, 2008, placing ECBI under Prompt Corrective Action
(PCA) framework because of the following serious findings and supervisory concerns noted during the general
examination:

The MB, on the other hand, posited that ECBI unjustly refused to allow the BSP examiners from examining and inspecting
its books and records, in violation of Sections 25 and 34 of R.A. No. 7653. In its letter, 13 dated May 8, 2009, the BSP informed ECBI
that it was already due for another annual examination and that the pendency of its appeal before the MB would not prevent the
BSP from conducting another one as mandated by Section 28 of R.A. No. 7653.1992.

Argument of ECCBI: the respondents committed grave abuse of discretion when they applied section 30 of RA 7653
instead of section 11 and 14 of the Rural bank. He argued that this law does not apply to him because he has not committed any
financial fraud hence the receivership was unwarranted and improper and what should apply is Sectiln 11 and 14 of RA 73353
because Vivas Availed of the Wrong Remedy

Issue: Whether or not the BSP has the power to examine the books and record of the petitioner

Ruling:

There is no grave abuse and discretion. The Central Bank shall have the power to enforce the laws, orders, instructions,
rules and regulations promulgated by the Monetary Board, applicable to rural banks; to require rural banks, their directors, officers
and agents to conduct and manage the affairs of the rural banks in a lawful and orderly manner; and, upon proof that the rural bank
or its Board of Directors, or officers are conducting and managing the affairs of the bank in a manner contrary to laws, orders,
instructions, rules and regulations promulgated by the Monetary Board or in a manner substantially prejudicial to the interest of the
Government, depositors or creditors, to take over the management of such bank when specifically authorized to do so by the
Monetary Board after due hearing process until a new board of directors and officers are elected and qualified without prejudice to
the prosecution of the persons responsible for such violations under the provisions of Sections 32, 33 and 34 of Republic Act No.
265, as amended.

The thrust of Vivas’ argument is that ECBI did not commit any financial fraud and, hence, its placement under
receivership was unwarranted and improper. He asserts that, instead, the BSP should have taken over the management of ECBI
and extended loans to the financially distrained bank pursuant to Sections 11 and 14 of R.A. No. 7353 because the BSP’s power is
limited only to supervision and management take-over of banks, and not receivership.

Close Now, Hear Later

At any rate, if circumstances warrant it, the MB may forbid a bank from doing business and place it under receivership
without prior notice and hearing. Section 30 of R.A. No. 7653 provides, viz:

Sec. 30. Proceedings in Receivership and Liquidation. – Whenever, upon report of the head of the supervising
or examining department, the Monetary Board finds that a bank or quasi-bank:

(a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That
this shall not include inability to pay caused by extraordinary demands induced by financial panic in the
banking community;

(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or

(c) cannot continue in business without involving probable losses to its depositors or creditors; or

(d) has wilfully violated a cease and desist order under Section 37 that has become final, involving acts or
transactions which amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary
RA 7653, as amended by RA 11211

Board may summarily and without need for prior hearing forbid the institution from doing business in the
Philippines and designate the Philippine Deposit Insurance Corporation as receiver of the banking institution.

This is the latter law hence it must be applied.The "close now, hear later" doctrine has already been justified as a measure
for the protection of the public interest. Swift action is called for on the part of the BSP when it finds that a bank is in dire straits.
Unless adequate and determined efforts are taken by the government against distressed and mismanaged banks, public faith in the
banking system is certain to deteriorate to the prejudice of the national economy itself, not to mention the losses suffered by the
bank depositors, creditors, and stockholders, who all deserve the protection of the government.

. Accordingly, the MB can immediately implement its resolution prohibiting a banking institution to do business in the
Philippines and, thereafter, appoint the PDIC as receiver. The procedure for the involuntary closure of a bank is summary and
expeditious in nature. Such action of the MB shall be final and executory, but may be later subjected to a judicial scrutiny via a
petition for certiorari to be filed by the stockholders of record of the bank representing a majority of the capital stock. Obviously, this
procedure is designed to protect the interest of all concerned, that is, the depositors, creditors and stockholders, the bank itself and
the general public. The protection afforded public interest warrants the exercise of a summary closure.

iv. Bancrights Holdings v. BSP and PDIC, GR 214866, Oct 2, 2017

The Facts
EIB entered into a merger with Union bank and Urbancorp to rehabilitate UBI that was under receivership. After the said
merger, EIB countered financial difficulties which prompted PDIC to extend assistance. However, despite the assistance PDIC failed
to overcome financial problems, EIB stockholders later went to a process of selling thebnak. Due to the worsening situation the
president of EIB voluntarily turned over the full control OF EIB to BSP and informed the latter that the former will be declaring a bank
holiday on April 27, 2012. BSP later issued a resolution which prohibited EIB from doing business in the Philippines and placing it
under receivership of PDIC in accordance with section 30 of the RA 7653 otherwise the central bank act.

On April 29, 2013, petitioners, who are stockholders representing the majority stock of EIB, 15 filed a petition for certiorari16 before the
CA challenging Resolution No. 571. In essence, petitioners blame PDIC for the failure to rehabilitate EIB, contending that PDIC: (a)
imposed unreasonable and oppressive conditions which delayed or frustrated the transaction between BDO and EIB; (b)
frustrated EIB's efforts to increase its liquidity when PDIC disapproved EIB's proposal to sell its MRT bonds to a private
third party and, instead, required EIB to sell the same to government entities; (c) imposed impossible and unnecessary
bidding requirements; and (d) delayed the public bidding which dampened investors' interest

Issue: whether or not the CA correctly ruled that the Monetary Board did not gravely abuse its discretion in issuing Resolution No.
571 which directed the PDIC to proceed with the liquidation of EIB.

Ruling: No

Section 30 of RA 7653 provides for the proceedings in the receivership and liquidation of banks and quasi-banks, the pertinent
portions of which read:
II. Section 30. Proceedings in Receivership and Liquidation. - Whenever, upon report of the head of the
supervising or examining department, the Monetary Board finds that a bank or quasi-bank:

(a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That this shall not include
inability to pay caused by extraordinary demands induced by financial panic in the banking community;
(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or
(c) cannot continue in business without involving probable losses to its depositors or creditors; or
(d) has willfully violated a cease and desist order under Section 37 that has become final, involving acts or transactions which
amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily and
without need for prior hearing forbid the institution from doing business in the Philippines and designate the
Philippine Deposit Insurance Corporation as receiver of the banking institution.

III.
xxxx

The receiver shall immediately gather and take charge of all the assets and liabilities of the
institution, administer the same for the benefit of its creditors, and exercise the general
powers of a receiver under the Revised Rules of Court x x x[.]

If the receiver determines that the institution cannot be rehabilitated or permitted to resume
business in accordance with the next preceding paragraph, the Monetary Board shall notify in
writing the board of directors of its findings and direct the receiver to proceed with the
liquidation of the institution. The receiver shall:

xxxx
RA 7653, as amended by RA 11211

The actions of the Monetary Board taken under this section or under Section 29 of this Act
shall be final and executory, and may not be restrained or set aside by the court except on
petition for certiorari on the ground that the action taken was in excess of jurisdiction or with
such grave abuse of discretion as to amount to lack or excess of jurisdiction. The petition
for certiorari may only be filed by the stockholders of record representing the majority of the capital
stock within ten (10) days from receipt by the board of directors of the institution of the order directing
receivership, liquidation or conservatorship.
It is settled that "[t]he power and authority of the Monetary Board to close banks and liquidate
them thereafter when public interest so requires is an exercise of the police power of the State. Police
power, however, is subject to judicial inquiry. It may not be exercised arbitrarily or unreasonably and could be
set aside if it is either capricious, discriminatory, whimsical, arbitrary, unjust, or is tantamount to a denial of due
process and equal protection clauses of the Constitution."

To recount, after the Monetary Board issued Resolution No. 686 which placed EIB under the receivership of
PDIC, the latter submitted its initial findings to the Monetary Board, stating that EIB can be rehabilitated or
permitted to resume business; provided, that a bidding for its rehabilitation would be conducted, and that the
following conditions would be met: (a) there are qualified interested banks that will comply with the parameters
for rehabilitation of a closed bank, capital strengthening, liquidity, sustainability and viability of operations, and
strengthening of bank governance; and (b) all parties (including creditors and stockholders) agree to the
rehabilitation and the revised payment terms and conditions of outstanding liabilities. 28 However, the foregoing
conditions for EIB's rehabilitation "were not met because the bidding and re-bidding for the bank's rehabilitation
were aborted since none of the pre-qualified Strategic Third Party Investors (STPI) submitted a letter of interest
to participate in the bidding,"29 thereby resulting in the PDIC's finding that EIB is already insolvent and must
already be liquidated - a finding which eventually resulted in the Monetary Board's issuance ofResolution No.
571.

In an attempt to forestall EIB's liquidation, petitioners insist that the Monetary Board must first make its own
independent finding that the bank could no longer be rehabilitated - instead of merely relying on the findings of
the PDIC before ordering the liquidation of a bank.30

As correctly held by the CA, nothing in Section 30 of RA 7653 requires the BSP, through the
Monetary Board, to make an independent determination of whether a bank may still be rehabilitated or not. As
expressly stated in the afore-cited provision, once the receiver determines that rehabilitation is no longer
feasible, the Monetary Board is simply obligated to: (a) notify in writing the bank's board of directors of the
same;the Monetary Board is not so required when the PDIC has already made such determination. It
must be stressed that the BSP (the umbrella agency of the Monetary Board), in its capacity as
government regulator of banks, and the PDIC, as statutory receiver of banks under RA 7653, are the
principal agencies mandated by law to determine the financial viability of banks and quasi-banks, and
facilitate the receivership and liquidation of closed financial institutions,
Section 34 to 36

Sec. 34. Refusal to Make Reports or Permit Examination. - Any officer, owner, agent, manager, director or officer-in-
charge of any institution who, being required in writing by the Monetary Board or by the head of the supervising and
examining department within the purview of this Act and relevant laws willfully refuses to file the required report or permit
any lawful examination into the affairs of such institution shall be punished by a fine of not less than Fifty thousand pesos
(₱50,000) nor more than Two million pesos (₱2,000,000) or by imprisonment of not less than one (1) year nor more than
five (5) years, or both, at the discretion of the court.

"This shall also apply to the officer, owner, agent, manager, director or officer-in-charge of the affiliate company/ies whose
transactions are subject to examination under this Act."

Sec. 35. False Statement. - The willful making of a false or misleading statement on a material fact to the Monetary Board or to the
examiners of the Bangko Sentral shall be punished by a fine of not less than One hundred thousand pesos (₱100,000) nor more
than Two million pesos (₱2,000,000), or by imprisonment of not more than five (5) years, or both, at the discretion of the court."

"Sec. 36. Proceedings Upon Violation of This Act and Other Banking Laws, Rules, Regulations, Orders or Instructions. - Whenever
a bank, quasi-bank, including their subsidiaries and affiliates engaged in allied activities or other entity which under this Act or
special laws is subject to Bangko Sentral supervision or whenever any person or entity willfully violates this Act or other pertinent
banking laws being enforced or implemented by the Bangko Sentral or any order, instruction, rule or regulation issued by the
Monetary Board, the person or persons responsible for such violation shall unless otherwise provided in this Act be punished by a
fine of not less than Fifty thousand pesos (₱50,000) nor more than Two million pesos (₱2,000,000) or by imprisonment of not less
than two (2) years nor more than ten (10) years, or both, at the discretion of the court.
RA 7653, as amended by RA 11211

"Whenever an entity under feangko Sentral supervision persists in carrying on its business in an unlawful or unsafe manner, the
Board may, without prejudice to the penalties provided in the preceding paragraph of this section and the administrative sanctions
provided in Section 37 of this Act, take action under Section 30 of this Act.

"The Bangko Sentral may grant informer’s reward to any person, except an officer or employee of the Bangko Sentral or of any
intelligence or law enforcement agency, including the relatives of such officer or employee within the fourth degree of consanguinity
or affinity, who voluntarily give definite information not yet in the possession of the Bangko Sentral leading to the: (a) arrest of bank
directors or officers and/or BSP personnel for violation of this Act or any banking and other laws implemented or enforced by the
Bangko Sentral, or for violation of other penal laws committed in connection with their employment or functions; or (b) filing of
criminal charges against any person for violation of Section 50 of this Act.

"The Monetary Board is hereby authorized to promulgate the implementing guidelines for the grant of informer’s reward, which in no
case shall exceed One million pesos (₱1,000,000). Said guidelines may provide for additional qualifications and disqualifications of
informants as well as the form and minimum content of the information given.

"The cash reward of informers shall be subject to applicable withholding taxes."

Section 37, Administrative Sanctions

Sec. 37. Administrative Sanctions on Supervised Entities. - The imposition of administrative sanctions shall be fair,
consistent and reasonable. Without prejudice to the criminal sanctions against the culpable persons provided in Sections
34, 35, and 36 of this Act, the Monetary Board may, at its discretion, impose upon any bank, quasi-bank, including their
subsidiaries and affiliates engaged in allied activities, or other entity which under this Act or special laws are subject to the
Bangko Sentral supervision, and/or their directors, officers or employees, for any willful violation of its charter or bylaws,
willful delay in the submission of reports or publications thereof as required by law, rules and regulations; any refusal to
permit examination into the affairs of the institution; any willful making of a false or misleading statement to the Board or
the appropriate supervising and examining department or its examiners; any willful failure or refusal to comply with, or
violation of, any banking law or any order, instruction or regulation issued by the Monetary Board, or any order, instruction
or ruling by the Governor; or any commission of irregularities, and/or conducting business in an unsafe or unsound
manner as may be determined by the Monetary Board, the following administrative sanctions, whenever applicable:

"(a) fines in amounts as may be determined by the Monetary Board to be appropriate, but in no case to exceed One
million pesos (₱1,000,000) for each transactional violation or One hundred thousand pesos (₱100,000) per calendar day
for violations of a continuing nature, taking into consideration the attendant circumstances, such as the nature and gravity
of the violation or irregularity and the size of the institution: Provided, That in case profit is gained or loss is avoided as a
result of the violation, a fine no more than three (3) times the profit gained or loss avoided may also be imposed;

"(b) suspension of rediscounting privileges or access to Bangko Sentral credit facilities;

"(c) suspension of lending or foreign exchange operations or authority to accept new deposits or make new investments;

"(d) suspension of interbank clearing privileges; and/or

"(e) suspension or revocation of quasi-banking or other special licenses.

"Resignation or termination from office shall not exempt such director, officer or employee from administrative or criminal
sanctions.

"The Monetary Board may, whenever warranted by circumstances, preventively suspend any director, officer or
employee of the institution pending an investigation: Provided, That should the case be not finally decided by the Bangko
Sentral within a period of one hundred twenty (120) days after the date of suspension, said director, officer or employee
shall be reinstated in his position: Provided, further, That when the delay in the disposition of the case is due to the fault,
negligence or petition of the director or officer, the period of delay shall not be counted in computing the period of
suspension herein provided.

"The above administrative sanctions need not be applied in the order of their severity.

"Whether or not there is an administrative proceeding, if the institution and/or the directors, officers or employees
concerned continue with or otherwise persist in the commission of the indicated practice or violation, the Monetary Board
may issue an order requiring the institution and/or the directors, officers or employees concerned to cease and desist from
RA 7653, as amended by RA 11211

the indicated practice or violation, and may further order that immediate action be taken to correct the conditions resulting
from such practice or violation. The cease and desist order shall be immediately effective upon service on the
respondents.

"The respondents shall be afforded an opportunity to defend their action in a hearing before the Monetary Board or any
committee chaired by any Monetary Board member created for the purpose, upon request made by the respondents
within five (5) days from their receipt of the order. If no such hearing is requested within said period, the order shall be
final. If a hearing is conducted, all issues shall be determined on the basis of records, after which the Monetary Board may
either reconsider or make final its order.

"The Governor is hereby authorized, at his discretion, to impose upon banks aned quasi-banks, including their
subsidiaries and affiliates engaged in allied activities, and other entities which under this Act or special laws are subject to
Bangko Sentral supervision for any failure to comply with the requirements of law, Monetary Board regulations and
policies, and/or instructions issued by the Monetary Board or by the Governor, fines not in excess of One hundred
thousand pesos (₱100,000) for each transactional violation or Thirty thousand pesos (₱30,000) per calendar day for
violations of a continuing nature, the imposition of which shall be final and executory until reversed, modified or lifted by
the Monetary Board on appeal."

i. Busuego v. CA, GR 95326, March 11, 1999

Facts:

The 16th regular examination of the books and records of the PAL Employees Savings and Loan Association, Inc.
("PESALA") was conducted from March 14 to April 16, 1988 by a team of CB examiners headed by Belinda Rodriguez. Following
the said examination, several anomalies and irregularities committed by the herein petitioners; PESALA's directors and officers,
were uncovered, among which are:

1. Questionable investment in a multi-million peso real estate project (Pesalaville).

2. Conflict of interest in the conduct of business.

3. Unwarranted declaration and payment of dividends.

4. Commission of unsound and unsafe business practices.

The supervision and examination department of the central bank later sent a letter to the board of directors of PESALA
inviting them to do a conference on July 21, 1988 to discuss the findings in the 16th examination, but the latter did not attend. The
petitioner later wrote to PESALA his side and requested that a copy thereof be furnished with the central bank

Issue: Whether or not there is a deprivation of due process

Anent the third issue, petitioners theorize that Monetary Board Resolution No. 805 is null and void for being violative of
petitioners' right to due process.

A reading of Monetary Board Resolution No. 805 discloses that it imposes administrative sanctions against petitioners. In
fact, it does not only penalize petitioners by including them in the "watchlist to prevent them from holding
responsible positions in any institution under Central Bank supervision," it mandates the PESALA Board of
Directors as well to file Civil and Criminal charges against them 'for all the misfeasance and malfeasance
committed by them, as warranted by the evidence.' Monetary Board Resolution No. 805 virtually deprives petitioners
their respective gainful employment, and at the same time marks them for judicial prosecution. The crucial question here
is that were petitioners afforded due process in the investigations conducted which prompted the issuance of Monetary
Board Resolution No. 805?

Monetary Board Resolution No. 805 violates basic and essential requirements. It must therefore be, as it is
hereby, declared, as void and inexistent because among other things, it openly derogates the fundamental rights of
petitioners.

Barring of the Petitioner to enter into future engagement

Petitioners opine that with the issuance of Monetary Board Resolution No. 805, "they are now barred from being
elected or designated as officers again of PESALA, and are likewise prevented from future engagements or
RA 7653, as amended by RA 11211

employments in all institutions under the supervision of the Central Bank thereby virtually depriving them of the
opportunity to seek employments in the field which they can excel and are best fitted." According to them, the
Monetary Board is not vested with "the authority to disqualify persons from occupying positions in institutions under the
supervision of the Central Bank without proper notice and hearing" nor is it vested with authority "to file civil and criminal

It must be remembered that the Central Bank of the Philippines (now Bangko Sentral ng Pilipinas), through the
Monetary Board, is the government agency charged with the responsibility of administering the monetary, banking and
credit system of the country 19 and is granted the power of supervision and examination over banks and non-bank
financial institutions performing quasi-banking functions of which savings and loan associations, such as
PESALA, from part of.20." Said law authorizes the Monetary Board to conduct regular yearly examinations of the books
and records of savings and loans associations, to suspend a savings and loan association for violation of law, to decide
any controversy over the obligations and duties of directors and officers, and to take remedial measures, among others.
Section 28 of Rep. Act No. 3779, reads;

Sec. 28. Supervisory powers over savings and loan associations. — In addition to whatever powers have been
conferred by the foregoing provisions, the Monetary Board shall have the power to exercise the following.

From the foregoing, it is gleanable that the Central Bank, through the Monetary Board, is empowered to conduct
investigations and examine the records of savings and loan associations. If any irregularity is discovered in the process,
the Monetary Board may impose appropriate sanctions, such as suspending the offender from holding office or from being
employed with the Central Bank, or placing the names of the offenders in a watchlist

b. Section 38-A Issuance of Injunctive Relief against BSP Action

"Sec. 38-A. Issuance of Injunctive Belief Against Bangko Sentral Actions. - No court, other
than the Court of Appeals and the Supreme Court, shall issue any temporary restraining
order, preliminary injunction or preliminary mandatory injunction against the Bangko Sentral
for any action under this Act.

"Any restraining order or injunction issued in violation of this section is void and of no force
and effect.

"The provisions of the Rules of Court on injunctions insofar as these are applicable and not
inconsistent with the provisions of this Act shall govern the issuance and dissolution of
restraining orders or injunctions against the Bangko Sentral."