In accordance with BSP Circular No.

156, March 19, 1998,

otherwise known as the combined capital accounts of each saving and
mortgage bank, shall not be less than 325 million by December 31, 1999
as in total assets minus the following assets:
a. Cash on hand
b. Amounts due from the Central Bank
c. Evidence of indebtedness of the Republic of the Philippines
and of the Central Bank, and any other evidence of indebtedness or
obligations the servicing and repayment of which are fully guaranteed by
the Republic of the Philippines. Loans to the extent covered by the hold-
out on or assignment of, deposits maintained in the Philippines
d. Other non-risk items as the Monetary Board may, from time
to time, authorized to be deducted from total assets.
 In this connection, the Monetary Board shall prescribed the
manner of determining the total assets of banking institutions .
However, contingent accounts shall not be defined as being included
among the total assets.
Moreover, wherever the capitalization accounts of a bank are
deficient with respect to the requirements enumerated in the
foregoing, the Monetary Board, after considering a report of the
appropriate supervising department on the state of solvency of the
institution concerned, shall limit or prohibit the distribution of net
profit and shall moreover require that the part or all of net profits to
be used to increase the capital accounts of the institution until the
minimum requirements has been met.
The Monetary Board may, after considering the aforesaid
report of the appropriates supervising department and if the amount
of the deficiency justifies it, restrict or prohibit the making of new
investment of any sort by the bank, with the exception of purchased
of the evidence of indebtedness included under the subsection above
until the minimum required capita ratio has been restored.
 As provided under BSP Circular No. 16, where , in the process of
a bank merger or consolidation, the merged or constituent bank may
not be able to comply fully with the net worth to risk assets as
prescribed in the regulation, the Monetary board may, at its discretion,
temporarily relieve the bank from full compliance with this requirement
under such condition as it may prescribed.

Circular No. 156, March 19, 1998, increase the minimum

capitalization of new bank by 20% for universal bank, 40% for regular
commercial bank and 60% for rural and thrift bank from mandated
banks capitalization requirements for 1998.

The existing bank are given two years (up to year 2000) within
which to comply with the minimum capital build-up. The provision
granting banks listed or in the process of being listed in six months to
comply with the capitalization requirements was cancelled through
Circular No. 168 dated July 1998.
 THRIFT BANK (TB) RURAL BANK (RB)
A. Governing Law RA 7906 (THRIFT BANK ACT OF 1995) RA7353, (RURAL BANK ACT OF 1992)
B. Definition/ Function These banks are primarily concerned Banks that provide adequate credit facilities
with the mobilization of savings in to farmers and merchants, or to
cooperatives of such farmers and
loans, and provide short-term working
merchants, and to people of rural
capital, medium and long-term communities in general.
financing and diversified financial and
allied services for its chosen market
and constituencies especially for
small and medium enterprises and
individual.
An RB may :
All types of thrift banks may perform any or
all of the following:
a. Accept savings and time deposits.
a. Accept savings and time deposits
b. Open current or checking
b. Open current or checking accounts
accounts, provided the rural bank has
provided that it has net assets of at
net assets of at least 5 million subject
least 20 million subject to such
to such guidelines as may be
guidelines as may be established by
established by the MB.
the MB, allowed to directly clear its
c. Act as a correspondent for other
demand deposit operation with the
financial institution.
BSP and the PCHC subject to such
d. Act as a collection agent.
guidelines that may be issued on the
e. Act as official depositors of
matter.
municipal, city or province fund in the
Note: Thrift banks are required to
municipality, city or province where it
comply with the minimum capital
is located, subject to such guidelines
account of 150 million if H.Q. is
as may established by MB.
located within M.M., 40 million if
outside M.M as a pre –requisite.
c. Act as correspondent for other f. Rediscount paper with the PNB, the
financial institution. LBP, the DBP or any other banking
d. Act as collecting agent for institution, including its branches and
government entities including but not agencies.
limited to, the Bureau of Internal g. Offer other banking services as
Revenue, Social Security System, and provided in section 72 or RA 337, as
the Bureau of Customs, upon prior amended.
approval by the MB. i. With MB approval, act as trustee over
e. Act as official depository of national estate or properties of farmers or
agencies and of municipal, city or merchants.
provincial funds in the municipality, city
or province where the thrift bank is
located subject to such guidelines as
may be established by the MB.
f. Rediscount paper with the PNB, LBP
and DBP and the other GOCC’s.
h. Purchase, hold an d convey real
estate under the same conditions as
those governing commercial banks
under Section 25 of RA 337 (General
Banking Act).
i. Engage in quasi-banking and money
market operations.
j. Open domestic letters of credit.
k. Extend credit facilities to private.
 Existing Compliance Period
Requirement 12/24/98 12/31/99 12/31/2000
Expanded Commercial Banks 3,500 4,500 4,950 5,400
Commercial Bank 1,625 2,000 2,400 2,800

Thrift Banks
Within Metro Manila 200 250 325 400
Outside Metro Manila 40 40 52 64
Rural Banks
Within Metro Manila 1 20 20 26 32
Cities of Cebu and Davao 1 10 10 13 16
1st /2nd/3rd class cities & 1st 5 5 6.5 8
class Municipalities
4th/5th/6th municipalities & 3 3 3.9 4.8
2nd/3rd/4th class municipalities
5th/6th class municipalities 2 2 2.6 3.2

1/for existing banks only. No new

banks are presently allowed
a. Individual Account - Such account is held in the
name of the individual depositor and as such is subject
to his sole control. For many banks, this is the most
popular form of savings account.
b. Joint Survivorship – Accounts held in the name of
the two depositor with the right of survivorship. Either
person may deposit or withdraw funds from this
account on the individual basis. Upon the death of the
joint co-owners, the balance in the account becomes
the sole property of the surviving depositor.
c. Young Person’s Account – Many banks accept the
savings accounts of persons who have not yet reached
the age of majority. Normally, such accounts are
opened only with the parent’s consent and are
restricted to children who have “reached the age of
reason,” that is, 12 or 13 years of age.
d. Trustee Account for Adult – are commonly called
self-appointed trusteeship since no formal trust
agreement is required. The trustee controls the fund
during his lifetime and upon his death the funds are
paid to the named beneficiary. The trusteeship may be
terminated at any time by the trustee without recourse
on the part of the beneficiary.
e. Trustee Account for Minor Child – is virtually identical to the
trustee account for an adult except that the beneficiary is by definition
a person who has not attained his majority age. Upon the death of the
trustee, the funds in the account are directly to the beneficiary, if he
has then reached majority, or to a legally appointed guardian if the
beneficiary is still minor at that time. The account may be terminated
any time upon the unilateral action of the trustee.

f. Estate Accounts – Other fiduciaries, such as executors,

administrators, conservators, or guardians can establish accounts in
their fiduciary capacity. The documentation provided through the
savings account records are of particular advantage to the fiduciary in
the execution of his duties. A copy of the trustee appointment or
agreement shall be filled with the bank or at least reviewed by the
bank.
 American Express Bank
 Citibank
 GE Consumer Finance
 HSBC
 JPMorgan Chase & Co.
 United Oversease Bank