Republic Act No.

8791
May 23, 2000

AN ACT PROVIDING FOR THE

REGULATION OF THE
ORGANIZATION AND OPERATIONS
OF BANKS, QUASI-BANKS, TRUST
ENTITIES AND FOR OTHER PURPOSES
Sec. 2. Declaration Of Policy. - The State
recognizes the vital role of banks providing an
environment conducive to the sustained
development of the national economy and the
fiduciary nature of banking that requires high
standards of integrity and performance. In
furtherance thereof, the State shall promote
and maintain a stable and efficient banking
and financial system that is globally
competitive, dynamic and responsive to the
demands of a developing economy.
Sec. 3. Definition and Classification of Banks.

3.1. Banks shall refer to entities

engaged in the lending of funds
obtained in the form of deposits.

3.2. Banks shall be classified into:

(a) Universal banks;

(b) Commercial banks;
(c) Thrift banks, composed of:

(i) Savings and mortgage banks

(ii) Stock savings and loan associations
(iii) Private development banks, as
defined in the Republic Act No.
7906 (hereafter the "Thrift Banks
Act");
(d) Rural banks, as defined in Republic
Act No. 73S3 (hereafter the "Rural
Banks Act")

(e) Cooperative banks, as defined in

Republic Act No 6938 (hereafter the
"Cooperative Code")
(f) Islamic banks as defined in
Republic Act No. 6848, otherwise
known as the "Charter of Al
Amanah Islamic Investment Bank
of the Philippines";

(g) Other classifications of banks as

determined by the Monetary Board
of the Bangko Sentral ng Pilipinas.
Sec. 6. Authority to Engage in
Banking and Quasi-Banking
Functions. - No person or entity
shall engage in banking
operations or quasi-banking
functions without authority
from the Bangko Sentral.
Provided, however, That an entity
authorized by the Bangko Sentral
to perform universal or
commercial banking functions
shall likewise have the authority to
engage in quasi-banking functions.
Sec. 10. Treasury Stocks. - No
bank shall purchase or acquire
shares of its own capital stock
or accept its own shares as a
security for a loan, except
when authorized by the
Monetary Board:
Provided, That in every case
the stock so purchased or
acquired shall, within six (6)
months from the time of its
purchase or acquisition, be
sold or disposed of at a public
or private sale. (24a)
Revised Corporation Code RA 11232

SEC. 9. Treasury Shares. – Treasury

shares are shares of stock which have
been issued and fully paid for, but
subsequently reacquired by the issuing
corporation through purchase,
redemption, donation, or some other
lawful means. Such shares may again be
disposed of for a reasonable price fixed by
the board of directors.
Sec. 11. Foreign Stockholdings.
- Foreign individuals and non-
bank corporations may own or
control up to forty percent
(40%) of the voting stock of a
domestic bank. x x x
The percentage of foreign-owned
voting stocks in a bank shall be
determined by the citizenship of the
individual stockholders in that bank.
The citizenship of the corporation
which is a stockholder in a bank shall
follow the citizenship of the
controlling stockholders of the
corporation, irrespective of the place
of incorporation.
Sec. 12. Stockholdings of Family Groups
of Related Interests. - Stockholdings of
individuals related to each other within
the fourth degree of consanguinity or
affinity, legitimate or common-law,
shall be considered family groups or
related interests and must be fully
disclosed in all transactions by such
corporations or related groups of
persons with the bank.
Sec. 15. Board of Directors. - The
provisions of the Corporation Code to
the contrary notwithstanding, there
shall be at least five (5), and a maximum
of fifteen (15) members of the board or
directors of a bank, two (2) of whom
shall be independent directors. An
"independent director" shall mean a
person other than an officer or employee
of the bank, its subsidiaries or affiliates
or related interests.
Sec. 15. Board of Directors. – x x x
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.
(Sec. 7, RA 7721) The meetings of the
board of directors may be conducted
through modern technologies such as,
but not limited to, teleconferencing and
video-conferencing. (n)
Sec. 17. Directors of Merged or
Consolidated Banks. - In the case
of a bank merger or consolidation,
the number of directors shall not
exceed twenty-one (21).
Sec. 36. Restriction on Bank
Exposure to Directors, Officers,
Stockholders and Their Related
Interests. - No director or officer
of any bank shall, directly or
indirectly, for himself or as the
representative or agent of others,
borrow from such bank
nor shall he become a guarantor,
endorser or surety for loans from
such bank to others, or in any
manner be an obligor or incur any
contractual liability to the bank
except with the written approval of
the majority of all the directors of
the bank, excluding the director
concerned:
Sec. 46. Development Assistance
Incentives. - The Bangko Sentral shall
provide incentives to banks which,
without government guarantee, extend
loans to finance educational
institutions cooperatives, hospitals and
other medical services, socialized or
low-cost housing, local government
units and other activities with social
content.
Sec. 47. Foreclosure of Real Estate
Mortgage. - In the event of
foreclosure, whether judicially or
extra-judicially, of any mortgage
on real estate which is security for
any loan, the mortgagor x x x
shall have the right within one
year after the sale of the real
estate, to redeem the property
by paying the amount due under
the mortgage deed, with interest
thereon at rate 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.
However, the purchaser at the
auction sale concerned whether in
a judicial or extra-judicial
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.
Notwithstanding Act 3135, juridical
persons whose property is being sold
pursuant to an extrajudicial foreclosure,
shall have the right to redeem the
property in accordance with this
provision until, but not after, the
registration of the certificate of
foreclosure sale with the applicable
Register of Deeds which in no case shall
be more than three (3) months after
foreclosure, whichever is earlier.
Sec. 52. Acquisition of Real Estate
by Way of Satisfaction of Claims. -
Notwithstanding the limitations
of the preceding section, a bank
may acquire, hold or convey real
property under the following
circumstances:
52.1. Such as shall be mortgaged to
it in good faith by way of security
for debts;

52.2. Such as shall be conveyed to

it in satisfaction of debts
previously contracted in the course
of its dealings, or
52.3. Such as it shall purchase
at sales under judgments,
decrees, mortgages, or trust
deeds held by it and such as it
shall purchase to secure debts
due it.
Any real property acquired or held
under the circumstances enumerated
in the above paragraph shall be
disposed of by the bank within a period
of five (5) years or as may be prescribed
by the Monetary Board: Provided,
however, That the bank may, after said
period, continue to hold the property
for its own use,
Sec. 55. Prohibited Transactions.

55.1. No director, officer, employee, or

agent of any bank shall -

(a) Make false entries in any bank report

or statement or participate in any
fraudulent transaction, thereby affecting
the financial interest of, or causing
damage to, the bank or any person;
Sec. 55. Prohibited Transactions.

(b) Without order of a court of

competent jurisdiction, disclose to any
unauthorized person any information
relative to the funds or properties in the
custody of the bank belonging to private
individuals, corporations, or any other
entity: Provided, That with respect to
bank deposits, the provisions of existing
laws shall prevail;
Sec. 55. Prohibited Transactions.

(c) Accept gifts, fees, or commissions or

any other form of remuneration in
connection with the approval of a loan or
other credit accommodation from said
bank;
(d) Overvalue or aid in overvaluing any
security for the purpose of influencing in
any way the actions of the bank or any
bank; or
Sec. 68. Voluntary Liquidation. - In case of
voluntary liquidation of any bank organized
under the laws of the Philippines, or of any
branch or office in the Philippines of a
foreign bank, written notice of such
liquidation shall be sent to the Monetary
Board before such liquidation shall be sent
to the Monetary Board before such
liquidation is undertaken, and the Monetary
Board shall have the right to intervene and
take such steps as may be necessary to
protect the interests of creditors. (86)
Sec. 69. Receivership and
Involuntary Liquidation. - The
grounds and procedures for placing
a bank under receivership or
liquidation, as well as the powers
and duties of the receiver or
liquidator appointed for the bank
shall be governed by the provisions
of Sections 30, 31, 32, and 33 of the
New Central Bank Act:
Sec. 74. Local Branches of Foreign
Banks. - In the case of a foreign bank
which has more than one (1) branch in
the Philippines, all such branches shall
be treated as one (1) unit for the
purpose of this Act, and all references
to the Philippine branches of foreign
banks shall be held to refer to such
units. (68)
Thank you very much