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Definition:
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Sec. 2 RA 9576, amending Section 4 (f) of Act No. 3591 (PDIC Law), as
amended
branch outside the Philippines may elect to include for insurance 1 its
deposit obligations payable only at such branch. (As amended by P.D.
1940, 27 June 1984; R.A. 7400, 13 April 1992; R.A. 9302, 12 August
2004)
Alied Banking Corp. v. Lim Sio Wan 549 SCRA 504 (2007)
2
P 4.95 B Minimum Capitalization
3
P2.4 B Minimum Capitalization
Page 3 of 23 3
Observations
Secondly, foreign banks can only bid and take part in the
foreclosure of real estate mortgaged to them. It does not
authorize them to participate in the foreclosure of assets
mortgaged to other banks.
Indeed, R.A. 10641 does not expressly repeal Section 1 of R.A.
133, as amended.
Well, the question may be more academic than real, but it may
be worth clarifying the issue soonest to prevent legal
complications in the future. After all, there are strong legal
arguments supporting the view that these foreign banks should
be allowed to bid and participate in the foreclosure of real estate.
Thrift Banks6- these are savings and mortgage banks, stock savings
and loan associations, and private development bank, which are
governed by Thrift Bank Act RA 7906
A thrift bank has the power to accept savings and time deposits, act as
a correspondent with other financial institutions and as a collection
agent for government entities, issue mortgages, engage in real estate
transactions and extend credit. In addition, thrift banks may also
maintain checking accounts, act as a depository for government
entities and local government units and engage in quasi-banking and
money market operations subject to the approval of the Bangko
Sentral.
Note: Under RA 10574 (23 July 2012) IRR is outlined in BSP Circular 809
8
Sec. 95 Definition of Deposit Substitutes. The term is defined as an alternative form of obtaining funds from the
public, other than deposits, through the issuance, endorsement, or acceptance of debt instruments for borrower’s own
account, for the purpose of relending or purchasing of receivables and other obligations. These instruments may
include, but need not be limited to, bankers acceptances, promissory notes, participations, certificates of assignment
and similar instruments with recourse and purchase agreements.
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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 provisions of Rule 589 of the New Rules of Court insofar
as they are applicable and not inconsistent with the provisions of this
section shall govern the issuance and dissolution of the restraining
order or injunction contemplated in this section.
a) Corporate powers
Every director must own at least one (1) share of the capital stock of
the corporation, which share shall stand in his name on the STB.
- after due notice to the BOD of the bank, the MB may disqualify ,
suspend, remove any bank director/officer who commits or omits
an act w/c render him unfit for the position.
9
Rule 58 Preliminary Injunction
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Banks and Banking: Loans; The business of a bank is one affected with
public interest, for which reason the banks should guard against loss
due to negligence or bad faith; In approving the loan of an applicant,
the bank concerns itself with proper information regarding its debtors.-
It bears stressing that the petitioner is a banking corporation, a
financial institution
RURAL BANK OF STA. IGNACIA, INC. vs. DIMATULAC 401 SCRA G.R. No.
142015 April 29,2003
Sales: Land Titles; Banks and Banking; Judicial Notice; The rule that
persons dealing with registered lands can rely solely on the certificate
of title does not apply to banks; Judicial notice may be taken of the
common practice of banks, before approving a loan, to send a
representative to the premises of the land offered as collateral and
duly investigate who are the true owners thereof,- The rule that person
dealing with registered lands can rely solely on the certificate of title
does not apply to banks. The degree of diligence required of banks is
more than that of a good father of a family; in keeping with their
responsibility to exercise the necessary care and prudence in dealing
even with a registered or titled property. The business of a bank is
affected with public interest, holding in trust the money of the
depositors, which the bank should guard against loss to rely merely on
the protective mantle of the land registration law, which is normally
accorded only to purchasers or mortgagees for value and in good faith.
In the present case, while petitioner sent a representative to verify the
original TCT on file with the Register of Deeds, no ocular inspection of
the premise took place. Judicial notice may be taken of the common
practice of banks, before approving a loan, to send a representative to
the premises of the land offered as collateral and duly investigate who
are the true owners thereof. Failure to do so is negligence on the part
of a bank. Had petitioner taken extra steps, time and effort in dealing
with the property it purchased by conducting proper ocular inspection
of the premises, it could have discovered early the presence of settlers
therein who are land reform beneficiaries.
“ xxxx [T]the rule that persons dealing with registered lands can
rely solely on the on the certificate of title does not apply to banks.
76
People’s Aircargo and Warehousing Co., Inc. v. Court of Appeals, G.R. No. 117847,
October 7, 1998, 297 SCRA 170, 184-185, citing Francisco v. Government Service
Insurance System, Nos. L-18287 and L-18155, March 30, 1963, 7 SCRA 577, 583;
and Maharlika Publishing Corporation v. Tagle, No. L-65594, July 9, 1986, 142 SCRA 553,
566.
Banate v. Philippine Countryside Rural Bank (Liloan, Cebu), Inc., G.R. No. 163825, July 13,
77
2010, 625 SCRA 21, 34, citing Yun Kwan Byung v. Philippine Amusement and Gaming
Corporation, G.R. No. 163553, December 11, 2009, 608 SCRA 107, 132.
Held. No., when the circumstances show that all efforts were
made by Respondent Bank to avoid such mistake. In
Philippine Bank of Commerce v. CA., upholding a long
standing doctrine, it was ruled that the degree of diligence
required of banks, is more than that of a good father of a
family where the fiduciary nature of their relationship with
their depositors is concerned. In other words banks are duty
bound to treat the deposit accounts of their depositors with
the highest degree of care. But said ruling applies only to the
cases where banks are under their fiduciary capacity, that is,
as depository of the deposits of their depositors. But the
same higher degree of diligence is not expected to be
exerted by banks in commercial transactions that do not
involve their fiduciary relationship with their depositors.
6. STIPULATION ON INTERESTS
a) Fine, imprisonment
b) Suspension or removal of director or officer
Section 36. Proceedings Upon Violation of This Act and Other Banking
Laws, Rules, Regulations, Orders or Instructions. — Whenever a bank or
quasi-bank, 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 (P50,000) nor more than Two
hundred thousand pesos (P200,000) 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
(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;
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(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.
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 but shall not, with the exception of
administrative expenditures, pay or commit any act that will involve
the transfer or disposition of any asset of the institution: Provided, That
the receiver may deposit or place the funds of the institution in non-
speculative investments. The receiver shall determine as soon as
possible, but not later than ninety (90) days from take over, whether
the institution may be rehabilitated or otherwise placed in such a
condition so that it may be permitted to resume business with safety to
its depositors and creditors and the general public: Provided, That any
determination for the resumption of business of the institution shall be
subject to prior approval of the Monetary Board.
(2) convert the assets of the institutions to money, dispose of the same
to creditors and other parties, for the purpose of paying the debts of
such institution in accordance with the rules on concurrence and
preference of credit under the Civil Code of the Philippines and he may,
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c) Dissolution of bank
1. Basic policy
2. Concept of insured deposits
3. Liability to depositors
a) Deposit liabilities required to be insured with PDIC
b) Commencement of liability
c) Deposit accounts not entitled to payment
d) Extent of liability
e) Determination of insured deposits
f) Calculation of liability
(i) Per depositor, per capacity rule
(ii) Joint accounts
(iii) Mode of payment
(iv) Effect of payment of insured deposit
(v) Payments of insured deposits as preferred credit under Art. 2244,
Civil
Code
(vi) Failure to settle claim of insured depositor
(vii) Failure of depositor to claim insured deposits
(a) Examination of banks and deposit accounts
(b) Prohibition against splitting of deposits
(c) Prohibition against issuances of TROs, etc.
Could bank issue no par value stocks? (Sec.9; See also Sec. 6, Corp.
Code) NO11
Could bank acquire its own shares (Sec.10) (Sec. 9, 37 and 81 of Corp.
Code)
11
Sec. 9, Treasury Shares, Sec. 6., Classification of shares. Banks, trust companies, insurance
companies, public utilities , and building and loan associations shall not be permitted to issue no-
par value shares of stock.
Page 19 of 23 19
the laws of PH
Provided that Foreign Bank may avail itself of only one (1) mode of
entry.
No, whether part-time or full-time, except under Rural Bank Act 7353
(director/officer/consultant) save in cases where service is incident to
financial assistance provided by the government or gocc.
Microfinancing
Yes, if it is necessary for its own use in the conduct of its business.
Provided, however, that the total investment in such real estate and
improvements thereof including bank equipment, shall not exceed 50%
of combined capital accounts. Provided further that the equity
investment if a bank in another corporation engaged primarily in real
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Any real property acquired or held under the above circumstances shall
be disposed of w/n 5 years or as may be prescribed by the MB.
Can a bank acquire real property by virtue of deed of transfer from its
former employee in satisfaction of a civil liability arising from the
criminal offense of qualified theft?
No, since the debts referred to are those resulting from previously
contracted in the course of its dealings. Reg. of Deeds of Manila v.
Chinabank 4 SCRA 1145
RA 7653 BSP
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Section 58. Definition. — For purposes of this Act, the term "demand
deposits" means all those liabilities of the Bangko Sentral and of other
banks which are denominated in Philippine currency and are subject to
payment in legal tender upon demand by the presentation of checks.
Suggested Answers: