DEVELOPMENT BANKING

Development Finance Corporation

World Bank known as development bank Development Finance Corporation conceived to several needs 1. To make the long term loans or equity investment required by a vacant industrial sector. 2. To strengthen National Development Strategies by investing in rural areas or by improving project appraisal method.

DEVELOPMENT BANKING IN THE PHILIPPINES

-Like that of Rural Banking, Development banking has an important part of the countrys banking system. Its significant can be appreciated from the declared policy of congress to wit: - It shall be the declared policy of congress to promote and expand the economy of the country pursuant to the socio economic program of the government to expand the industrial and agricultural growth; to encourage the establishments of more private developments banks in order to meet the needs for capital and to meet the demand for adequate investments credit or medium and long term loans for the Filipino entrepreneurs. - Development Bank of the Philippines, Philippine National Bank, Government Insurance System, Social Security System, National Economic and Development Authority certain ministries and other appropriate agency, corporation or instrumentalities of the Philippine Government in corporation with the private development bank provide adequate assistance in the form of saving deposit and technical knowhow in agricultural and industry.

ORGANIZATION
Private Development Bank shall be organized in the form of a stock corporation and its paid up capital shall not be less than th A. For class A 4.00O.000.00 B. For class B 2M C. For class C 1M

Revolution No.1205
Monetary board, July 3,1980 beginning April 1, 1980 the development banks of the Phil. may no longer provide counterpart capital to private development banks.

Proffered Stocks of Private Development Banks

-Hold by DBP and sold their after to private persons may at the options of the purchasers be retained with the same right as when such shares of stocks were held by DBP or converted at not less than par to common share or the ordinary prefaced shares of the class issued to private share holders. -issue preferred share of stick to private persons. 1 .Projected statement of condition at the of the 12months operation of the propose banks. 2. Statement of estimated earnings and expenses for the first 12 months operation of the propose banks.

Economic justification
-factors affecting the stability and issues of private development banks:

A. Present population labor force and annual income for the lost 5 fiscal year B. Estimated number of families in the area C. Estimated average earnings per family D. Land area and its certifications E. Transportation of marketing facilities F. Natural resources quarries and mineral deposits G. Banking & financial institution located around the locality H. Business and commercial establishment in the area

Certificates of Authority
-Securities exchange commissioners shall not register the articles of incorporation of any bank unless accompanied by a certificate of authority issued by the monetary bank

Process and Functions

-Any private developments banking with the approval of the monetary board a) Accept savings and time deposit b) Acts as correspondents for other financial institutions and as collection agent c) Rediscount paper with the central bank .PNB and then branches or ages sues

Investment in Equities
Any development bank was invest in equities of such allied under taking as my, be approved by the central bank of their category as provided in section of the general banking activities.