This document is the Republic Act No. 8791 which provides for the regulation of banks, quasi-banks, trust entities and other financial institutions in the Philippines. Some key points include:
- It defines banks and classifies them into universal banks, commercial banks, thrift banks, rural banks, cooperative banks, and Islamic banks.
- It establishes the authority of the Bangko Sentral ng Pilipinas to regulate financial institutions and authorize them to engage in banking and quasi-banking functions.
- It covers various aspects of bank operations like foreign ownership limits, board of director requirements, restrictions on lending to insiders, real estate lending and acquisition, prohibited transactions, and receivership.
This document is the Republic Act No. 8791 which provides for the regulation of banks, quasi-banks, trust entities and other financial institutions in the Philippines. Some key points include:
- It defines banks and classifies them into universal banks, commercial banks, thrift banks, rural banks, cooperative banks, and Islamic banks.
- It establishes the authority of the Bangko Sentral ng Pilipinas to regulate financial institutions and authorize them to engage in banking and quasi-banking functions.
- It covers various aspects of bank operations like foreign ownership limits, board of director requirements, restrictions on lending to insiders, real estate lending and acquisition, prohibited transactions, and receivership.
This document is the Republic Act No. 8791 which provides for the regulation of banks, quasi-banks, trust entities and other financial institutions in the Philippines. Some key points include:
- It defines banks and classifies them into universal banks, commercial banks, thrift banks, rural banks, cooperative banks, and Islamic banks.
- It establishes the authority of the Bangko Sentral ng Pilipinas to regulate financial institutions and authorize them to engage in banking and quasi-banking functions.
- It covers various aspects of bank operations like foreign ownership limits, board of director requirements, restrictions on lending to insiders, real estate lending and acquisition, prohibited transactions, and receivership.
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.
(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