REPUBLIC ACT NO.

3779
AN ACT TO PROVIDE FOR THE REGULATION OF THE ORGANIZATION AND
OPERATIONS OF SAVINGS AND LOAN ASSOCIATIONS (AS AMENDED BY RA 4378, PD
113, PD 450, PD 1318 AND PD 1539)
Section 1. Title. – The short title of this Act shall be the “Savings and Loan Association Act.”
Section 2. Declaration of Policy. – It is hereby declared to be the policy of the State:
(a) To regulate and supervise the activities of savings and loan associations in order to place
their operations on a sound, stable, and efficient basis to the end that they may be able to better
provide for the establishment of additional credit and savings facilities in a fair manner to the
consuming public and to industry, commerce, and agriculture and to curtail or prevent acts or
practices of these savings and loan associations which are prejudicial to the public interest;
(b) To lay down the minimum requirements and the standards under which savings and loan
associations may be established and do business;
(c) To maximize the protection of the public, and of members and stockholders of savings and
loan associations against misfeasance and malfeasance of the directors and officers thereof;
and
(d) To encourage industry, frugality and the accumulation of savings among the public, and the
members and stockholders of savings and loans associations.
Section 3. Definition of terms. – For the purpose relative to the implementation of this Act, the
following definitions shall apply.
(a) “Savings and loan association” hereinafter called the association shall include any
corporation engaged in the business for accumulating the savings of its members or
stockholders, and using such accumulations, together with its capital in the case of a stock
corporation, for loans and/or for investment in the securities of productive enterprises or in
securities of the Government, or any of its political subdivisions, instrumentalities or
corporations: Provided, That they shall be primarily engaged in servicing the needs of
households by providing personal finance and long-term financing for home building and
development.
(b) “Monetary Board” shall mean Central Bank of the Philippines.
(c) “Central Bank” shall mean Central Bank of the Philippines.
Section 4. Organization of savings and loan association. – (a) A savings and loan association
shall be organized either as a stock or non-stock corporation:
(b) The Monetary Board shall fix the minimum paid-up capital of a savings and loan association
organized as a stock corporation in such amount as said Board may consider necessary for the
safe and sound operation of such association: Provided, however, That in no case shall such
paid-up capital be less than one hundred thousand pesos: Provided, further, That at least
seventy per centum of the voting stock of a savings and loan association which may be
established after the approval of this Act shall be owned by citizens of the Philippines, except
where a new association is established as a result of the consolidation of existing associations
in which there are foreign-owned voting stocks at the time of consolidation: Provided,
furthermore, That the percentage of foreign-owned voting stocks in stock savings and loan
associations existing upon the effectivity of this Act, if such percentage is in excess of thirty per
cent (30%) of the voting stock of the savings and loan association, shall not be increased, but
may be reduced, and once, reduced, shall not be increased thereafter beyond thirty per cent
(30%) of the voting stock of the savings and loan association. The percentage of foreign-owned
voting stocks in an association shall be determined by the citizenship of the individual
stockholders in that association. In the case of corporations owning shares in the association,
the of each stockholder in that corporation shall be the basis of the computing the percentage.
Such association is authorized to receive deposits from, and extend loans to, the general public.
(c) A savings and loan association organized as a non-stock corporation shall confine its
membership to a well-defined group of persons and shall not transact business with the general
public. It shall accept deposits from, and grant loans to, only its member-depositors; and
(d) No entrance fees of any kind may be charged by any association without first securing the
approval of the Monetary Board. In no case shall the total amount of fees exceed one percent of
the amount deposited, contributed, or otherwise paid in by the particular shareholder,
stockholder, or member.
Section 4-(a) Prohibition against inquiry into, or disclosure of deposits. – All deposits of
whatever nature with savings and loan associations in the Philippines are hereby considered as
of an absolutely confidential nature and may not be examined, inquired or looked into by any
person, government official, bureau or office, except when the examination is conducted by the
Monetary Board or the official of the Central Bank in charge of savings and loan associations or
his deputies pursuant to the provisions of this Act, or upon written permission of the depositor,
or in cases of impeachment, or upon order of a competent court in cases of bribery or
dereliction of duty of public officials, or in cases where the money deposited or invested is the
subject matter of the litigation.
It shall be unlawful for any official or employee of savings and loan association to disclose to
any person any information concerning said deposits, except in the cases mentioned in the
preceding paragraph of this section.
(b) Deposit insurance. – Deposits in savings and loan associations shall be eligible for
insurance coverage under Republic Act Numbered Three thousand five hundred and ninety-
one, otherwise known as an Act Establishing the Philippine Deposit Insurance Corporation.
Section 5. Powers of savings and loan association. – A savings and loan association shall be
incorporated under the Corporation Law, and in addition to the powers therein granted
whenever applicable, it shall exercise the following:
(a) To grant loans not exceeding the borrower‟s savings and time deposits in the association,
plus his four months‟ salary or regular income whether from employment or from his own
business, or seventy per cent (70%) of the fair market value of any property acceptable as
collateral on first mortgage that he may offer as security: Provided, That no loan shall have a
maturity of more than five years, except loans on the security of unencumbered real estate for
the purpose of home building and home development which may be granted with maturities not
exceeding twenty years and medium-or long-term loans to finance agricultural projects, subject
to regulations, prescribed by the Monetary Board: Provided, further, That in case of a borrower
who is a permanent employee or wage earner, the treasurer, cashier or paymaster of the office
employing him is authorized, notwithstanding the provisions of any existing law, rule and
regulation to the contrary, to make deductions from his salary, wage, or income pursuant to the
terms of his loan, to remit deductions to the savings and loan association concerned, and collect
such reasonable fee for his services as may be authorized by rules promulgated by the
Monetary Board.
(b) To charge interest within the limits allowed by law, and collect such necessary fees
incidental to the grant of loans as may, by regulation, be authorized by the Monetary Board;
(c) Subject to such rules as the Monetary Board may approve, to discount with recourse
commercial papers and accounts receivables;
(d) To invest its funds in any sound non-speculative enterprise, as well as in bonds, securities,
and other obligations issued by the Government of the Philippines, or any of its political
subdivisions, instrumentalities or corporations including government-owned or controlled
corporations subject to the rules and regulations of the Monetary Board: Provided, That stock
savings and loan associations may invest in equities only of such allied undertakings as may be
approved by the Central Bank for banks of their category as provided for in Section 6-A of
Republic Act No. 337, as amended: Provided, further, That (a) the total investment in equities
shall not exceed twenty-five per cent (25%) of the net worth of the association;
(b) the equity investment in any single enterprise shall be limited to fifteen per cent (15%) of the
net worth of the association (c) the total equity investment of the association in any single
enterprise shall remain a minority holding in that enterprise, except where the enterprise is not a
financial intermediary; and
(d) the equity investment in other banks, if allowed by the Monetary Board, shall be subject to
the same limitations imposed on similar investments of commercial banks and shall be
deducted form the investing stock savings and loan association‟s net worth for purposes of
computing the prescribed ratio of net worth to risk assets. Equity investments shall not be
permitted in non-related activities. Where the allied undertaking is a wholly or majority owner
subsidiary of the investing association, it may be subject to examination by the Central Bank.
(e) To allow member-depositors to participate in the profits of the savings and loan association
on the basis of their deposits on the date dividends are declared; and
(f) To borrow money or incur such obligations not exceeding twenty per centum of the total
assets of the association, from any public lending institutions, such as the Development Bank of
the Philippines, the Philippine National Bank, the Government Service Insurance System, the
Social Security System, and from such private lending institutions as may be approved by the
Monetary Board, including other stock savings and loan associations. The Monetary Board may,
in meritorious cases, raise the ceiling on the borrowing capacity of a savings and loan
association to an amount not exceeding thirty per centum of its total assets.
(f-1) To maintain deposits with banks and other stock savings and loan associations: Provided,
That the amount of such deposits shall be subject to the loan limit to a single borrower as
prescribed herein or by other special laws or regulations. A savings and loan associations may,
subject to such rules as the Monetary Board may promulgate, also borrow from, or rediscount
notes, bills of exchange and other commercial papers with the Central Bank. The rate of interest
on such obligations or borrowings to be charged such associations shall not be more than that
charged rural banks.
Section 6. Restriction on savings and loan associations. – (a) No non-stock association shall
have or carry upon its books for any person any demand, commercial or checking account, or
any credit to be withdrawn upon the presentation of any negotiable check or draft.
(b) No non-stock savings and loan associations shall advertise or represent itself to the public
as a bank. A stock savings and loan association may use the word „bank‟ in connection with its
business name only upon compliance with such requirements as may be imposed by, and prior
approval of the Monetary Board.
(c) No association shall issue, publish or cause or permit to be issued, or published, any
advertisement that it is doing or permitted to do any business which is prohibited by law to an
association, or which misrepresents its shares, stocks, investment certificates, or the rights of
investors or depositors in respect thereto.
Section 7. Prerequisite approval of articles of incorporation and by-laws. – The articles of
incorporation and by-laws of a proposed savings and loan association shall not be filed in the
Office of the Securities and Exchange Commissioner unless there is attached thereto a
certificate of the Monetary Board approving such articles and by-laws: Provided, however, That
this requirement shall not apply to savings and loan associations duly incorporated or registered
prior to the approval of this Act and which are actually existing and operating as such: Provided,
further, That such existing savings and loan associations shall file an information sheet within
sixty days after the approval of this Act with the Central Bank in a form prescribed by the
Monetary Board.
No person, association, partnership or corporation shall do business, or hold itself out as doing
business, as a savings and loan association, or shall use the term “savings and loan
association” or any other title or name tending to give the public the impression that it is
engaged in the operations and activities of a savings and loan association unless so authorized
under this Act.
Section 8. Application for approval; contents. – The articles of incorporation of a proposed
association shall be submitted to the Monetary Board together with a copy of the proposed by-
laws and an application, signed by a majority and verified by one of the directors, requesting
approval. The application shall set forth:
(a) the names and addresses of the incorporators, directors, and officers, with a statement of
their character, experience, and general fitness to engage in the savings and loan business;
(b) an itemized statement of the estimated receipts and expenditures of the proposed
association for the first year;
(c) a showing that the public convenience and advantage will be promoted by the formation of
the proposed association;
(d) any other matters the Monetary Board may require.
A filing fee of two hundred pesos shall be paid to the official of the Central Bank in charge of
savings and loan associations with each application for approval of proposed article of
incorporation and by-laws, but in the case of non-stock savings and loan associations, the filing
fee shall be five pesos.
Section 9. Hearing on Application. – Upon the receipt of an application to form a proposed
savings and loan association, the Monetary Board shall give written notice to each existing
association that an application has been made. The notice shall state the name of the proposed
association, and the time and place that a hearing will be held. The hearing shall be conducted
not less than ten days after the mailing of the notice. Any person may appear at such hearing in
person or by agent or attorney, and orally or in writing show cause why such application should
not be approved.
If after public hearing, the Monetary Board believes that the requirements of this Act have been
complied with and that no valid reasons exist for the disapproval of the application, it shall
favorably endorse such application to the Securities and Exchange Commissioner who shall
issue articles of incorporation to the association.
Section 10. Ground for refusal to execute certificate of approval. – The Monetary Board may
refuse to approve the application, if upon examination and investigation, it finds that:
(a) the corporation is to be formed for any business other than the legitimate savings and loan
business, or
(b) the association‟s financial program is unsound, or
(c) the area where the association is to be located is adequately served by one or more existing
associations.
Section 11. Prior licensing. – All associations, prior to transacting any business, shall procure a
license to transact business from the Monetary Board. After due notice and hearing, the
Monetary Board may revoke, or suspend for such period as it determines, the license of any
association, the solvency of which is imperiled by losses or irregularities or of any association
which wilfully violates any provisions of this Act or any regulation issued thereunder.
Section 12. Branch offices and agencies. – (a) No association shall open, maintain or operate a
branch without first applying for and obtaining from the Monetary Board a license for such
branch.
(b) The application for a branch license shall be in such form as the Monetary Board shall
require, including an itemized statement of the estimated receipts and expenditures of the
association in connection with such branch for the first year or such longer periods as the
Monetary Board requires, and a showing that the public convenience and advantage will be
promoted by the operation of such branch. A filing fee of fifty pesos shall be paid to the
Monetary Board with each application for a branch license.
(c) . . .
Section 13. Agents and salesmen. – No person shall act as an agent salesman of an
association or operate an agency without obtaining a license from the Monetary Board. No
license is required for a collector of an association but no person shall hold himself out or act as
a collector unless he is authorized as a collector in writing by such association.
Section 14. Qualification of directors. – No person shall be eligible as directors of an
associations unless he is a member, in case of non-stock associations, or an owner is his own
right of stocks in the association with an aggregate par value of at least five thousand pesos, in
case of stock associations: Provided, That at least two-thirds of the members of the board of
directors of any stock savings and loan association which may be established after the approval
of this Act shall be citizens of the Philippines: Provided, however, That no full-time appointive or
elective public official shall at the same time serve as officer, director, legal counsel or
consultant of any stock savings and loan association, except in cases where such service is
incident to financial assistance provided by the government or a government-owned or
controlled corporation to such association: Provided, further, That in the case of a merger or
consolidation of savings and loan associations duly approved by the Monetary Board, the
limitation on the maximum number of directors in a corporation, as provided for in Section 28 for
the Corporation Law (Act No. 1459), shall not be applied so that membership in the new board
may include up to the total number of directors provided for in the respective articles of
incorporation of the merging or consolidating savings and loan associations.
Section 15. Bond of officers and employees. – All officers and employees of an association, who
have access to money, or negotiable securities of the association, or who issue stock or shares
of the association in the regular discharge of their duties shall, before entering upon the duties,
furnish to the employing association a good an sufficient bond, the form and amount of which
shall be prescribed by the Monetary Board, indemnifying the association against loss of money
or securities by reason of their dishonesty and against any loss arising from their dishonest
issue to stock or shares.
Section 16. Compensation of directors, officers and employees. – No director, officer, or
employee of an association shall receive from such association, and no association shall pay to
any director, officer, or employee of such association, any commission, emolument, gratuity or
reward based on the volume or number of loans made, or based on the interest or fees
collected thereon. Nothing in this section prohibits or limits any of the following:
(a) Receipt or payment of salaries of directors, officers, and employees.
(b) Receipt or payment of commissions to agents whether or not based on the volume of
number of loans or on the interest or fees collected thereon.
(c) Receipt or payment of bonuses to directors, officers or employees if such bonuses are based
on the profits and not on the volume or number of loans made or on the interest or fees
collected thereon.
Section 17. Shares of stock of officers, directors, or employees. – No officer, director, or
employee of any association shall acquire any certificate or shares issued by the association
with which he is connected by a method other than by investing his funds directly with the
association, or by gift, bequest, or descent, or purchase in any amount not exceeding at any
one time three thousand pesos, unless such other mode of acquisition has the prior approval of
the Monetary Board, and the Auditor of the Central Bank.
Section 18. Limitations on lending authority. – (a) An association shall not commit itself to make
any loans for amounts in excess of the total of the following amounts:
(1) amount of cash available for loan purposes;
(2) amount of cash which can be readily realized upon the sale or redemption of permissible
investments made by the association;
(3) amount of credit available for loan purposes from government or private financing
institutions.
(b) No association shall directly or indirectly make any loans to any director or officer of such
association, either for himself or as agent or as partner of another, except with the written
approval of the majority of the directors of the association, excluding the director concerned:
Provided, That in the case of non-stock association, the aggregate loans, direct or indirect,
granted at any one time to such directors and officers shall not exceed twenty per centum of the
total paid-up capital of the association: Provided, further, That in the case of stock association,
the Monetary Board may regulate the amount of credit that the association may extend, directly
or indirectly, to its directors, officers or stockholders. In any case, however, the outstanding
credit accommodations which a stock association may extend to each of its stockholders
owning two percent (2%) or more of the subscribed capital stock, its directors or its officers,
shall be limited to an amount equivalent to the respective outstanding deposits and book value
of the paid-in capital contribution in the association. In all cases of credit accommodations
granted to directors and officers under this subsection, the written approval of the majority of the
directors of the association, excluding the director concerned, shall be entered upon the records
of the association and a copy of such entry shall be transmitted forthwith to the appropriate
supervising department of the Central Bank. The office of any director or officer of an
association who violates the provisions of this subsection shall immediately become vacant and
the director or officer shall be punished by imprisonment of not less than one year nor more
than ten years and by a fine of not less than one thousand nor more than ten thousand pesos.
(c) No association shall make any loan to any corporation of which a majority of the stock is
owned or controlled directly or indirectly, by any one or more of the directors or officers of such
association collectively except with the written approval of the majority of the directors of the
association excluding the director or directors concerned. Any such approval shall be entered
upon the records of the association and a copy of such entry shall be transmitted forthwith to the
appropriate supervising department of the Central Bank. The Monetary Board may regulate the
amount of credit that an association may extend to a corporation referred to in this subsection in
the same manner as it may regulate credit accommodations to directors and officers of the
association under the preceding subsection.
(d) No association shall loan any of its funds upon the security of its own stock.
Section 19. Execution of loan agreement. – For each loan made by an association, a written
note or other obligation expressing a rate of interest must be executed by the borrower.
Section 20. Liability of officers for loans contrary law. – No association shall make or purchase
any loan or investment not authorized or permitted under this Act, and any director, officer or
employee who, on behalf of any such association, knowingly makes or purchases any such loan
or investment or who knowingly consents thereto shall be personally liable to the association for
the full amount of any such loan or investment.
Section 21. Limitations on investment. – (a) No association at any one time shall have invested
in bonds and securities an aggregate amount in excess of ten per centum of the total assets of
such association;
(b) No non-stock savings and loan association at any one time shall have invested in real
property an aggregate amount in excess of five per centum of the total assets of such
association;
(c) No non-stock savings and loan association at any one time shall invest in furniture, fixture,
furnishings and equipment and leasehold improvements for its offices, more than ten per
centum of its aggregate paid-up capital;
(d) No stock savings and loan association, at any one time, shall have an investment in real
estate and improvements thereon, including equipment, in an aggregate amount in excess of
fifty per cent of its net worth: Provided, That real estate used for the stock savings and loan
association‟s purposes owned by another corporation in which that association owns equity
shall be considered as part of the association‟s total investment in real estate.
Section 22. Reserves. – Every non-stock savings and loan association shall create a
withdrawable share reserve which shall consists of three per centum of the aggregate capital
contributions of the members.
Five per centum of the net earnings of a stock savings and loan association shall credited to a
reserve account until the reserve equals five per centum of the total assets of the association
and shall be available for meeting losses incurred by the association.
Section 23. When dividends not distributable. – The withdrawable share reserve shall be set up
from the profits of the non-stock association, and no association shall pay any dividends or
distribute any profits to its members if its withdrawable share reserve is less than, of if by such
payment or distribution would be reduced below, the amount specified in Section twenty-two
hereof.
Section 24. Annual reports. – Every association shall, within sixty days after the close of its
fiscal year furnish the Monetary Board and mail to each of its investors, a copy of its financial
statement showing, in such form and detail as the Monetary Board shall require, the amount
and character of the assets and liabilities of the association at the end of the preceding fiscal
year. Any association may, in lieu of mailing, publish such financial statement in any newspaper
of general circulation in the city or town in which its principal and branch offices are located. The
Monetary Board may, in addition to the foregoing, require the publication of such other
information as it shall deem necessary for the protection of the investors in these associations.
Section 25. Monetary Board‟s authority to order discontinuance of unlawful or unsafe or
injurious practices of associations. – If the Monetary Board finds at the result of any examination
from any report made to it or to any of its investors, that the association is violating the
provisions of its articles of incorporation, charter, by-laws, or any law, or is conducting its
business in an unsafe or injurious manner, or is insolvent, it may by an order addressed to such
association direct a discontinuance of such violations or unsafe or injurious practices and a
conformity with all the requirements of law.
Section 26. When Monetary Board authorized to demand and take possession of association. –
The Monetary Board may demand and take possession of the property, business and assets of
an association if any of the following occur:
(a) The association does not comply with the order given pursuant to Section twenty-five, within
the time specified therein;
(b) It appears to the Monetary Board that the association is in an unsafe condition or is
conducting its business in an unsafe or injurious manner such as to render its further operations
hazardous to the public or to any or all of its investors;
(c) The Monetary Board finds that the association‟s assets, after deducting all liabilities, do not
equal or exceed the sum of par value of its outstanding shares of stock or the amount
contributed to the capital of the association.
(d) The association refuses to submit its books, papers, and accounts to the inspection of the
Monetary Board or any of its examiners, deputies, or assistants;
(e) Any officer of the association refuses to be examined upon oath concerning the affairs of the
association.
Section 27. Time Monetary Board authorized to retain possession of association; liquidation. –
The Monetary Board may retain possession of the property, business and assets of an
association until the association resumes business with the consent of and subject to the
conditions imposed by the Monetary Board, or until its affairs are liquidated; in case of
liquidation, the Monetary Board shall be governed by the provisions of the Central Bank Act for
liquidation of banks.
Section 28. Supervisory powers over savings and loan association. – In addition to whatever
powers have been conferred by the foregoing provisions, the Monetary Board shall have the
power to exercise the following:
(a) To see to it that the capital, financing, direction and administration, as well as the integrity,
responsibility, and ability of the organizers, administrators, directors and officers of every
savings and loan association being organized under this Act, shall reasonably assure the safety
of the interests which the public and/or its members and stock holders shall entrust to them;
(b) To supervise the operations and activities of savings and loan associations, which shall
consist, among others (1) in placing limits to the maximum credit allowed any individual
borrower; (2) in determining the loan period and loan procedures; (3) in prescribing in higher
rate of the interest which associations may pay on deposits received by them, which shall not be
more than one per centum over and above the rate which banking institutions are authorized or
shall be authorized to pay; (4) in imposing a uniform accounting system, and manner of keeping
the accounts and records of savings and loan associations; (5) in instituting periodic surveys of
loan and lending procedures, audits, test check of each and other transaction of savings and
loan associations; and (6) whenever necessary in conducting training courses for personnel of
savings and loan associations;
(c) To conduct at least once a year, and whenever necessary, any inspection, examination or
investigation of the books and records, business affairs, administration, and financial condition
of any savings and loan association with or without prior notice but always with fairness and
reasonable opportunity for the association or any of its officials to give their side of the case.
Whenever an inspection, examination or investigation is conducted under this grant of power,
the person authorized to do so may seized books and records and keep them under his custody
after giving proper receipts therefor; may make any marking or notation on any paper, record,
document or book to show that it has been examined and verified; and may padlock or seal
shelves, vaults, safes, receptacles or similar containers and prohibit the opening thereof without
first securing authority therefor, for as long as may be necessary in connection with the
investigation or examination being conducted. The official of the Central Bank in charge of
savings and loan associations and his deputies are hereby authorized to administer oaths to
any director, officer or employee of any association under the supervision of the Monetary
Board.
Stock savings and loan associations which are subject to examination by the Monetary Board,
shall, after having been in operation for five years, reimburse the Central Bank for the cost of
maintaining the department of savings and loan associations, and for this purpose, shall pay to
the Central Bank, within the first thirty days of each year after the fifth year of their existence, an
annual fee in an amount to be determined by the Monetary Board in the manner provided in the
next paragraph of this subsection. The fee to be paid by each stock savings and loan
association shall be an amount equal to a prescribed percentage of its average total assets
during the preceding years, as shown on its end-of-month balance sheets, after deducting its
cash on hand and amounts due from banks, including the Central Bank: Provided, however,
That said percentage may not exceed one twentieth of one per cent. If the total of maximum
fees authorized under this paragraph should be insufficient to defray the entire costs of the
department, the difference shall be borne by the Central Bank.
(d) After proper notice and hearing, to suspend a savings and loan association for violation of
law, for unsafe and unsound practices or for reason of insolvency. The Monetary Board may
likewise, upon proof that a savings and loan association or its board of directors or officers are
conducting and managing its affairs in a manner contrary to laws, orders, instructions, rules and
regulations promulgated by the Monetary Board or in a manner substantially prejudicial to the
interest of the government, depositors or creditors, take over the management of the savings
and loan association after due hearing, until a new board of directors and officers are elected
and qualified without prejudice to the prosecution of the persons responsible for such violations.
The management by the Monetary Board shall be without expense to the savings and loan
association, except such as is actually necessary for its operation, pending the election and
qualifications of a new board of directors and officers to take the place of those responsible for
the violation or acts contrary to the interest of the government, depositors and creditors;
(e) To require all accountable officers and employees of every savings and loan association to
post bonds for the faithful performance of their duties in such reasonable sums and with such
sureties as the Monetary Board may approve;
(f) To decide, after appropriate notice and hearings any controversy as to the rights or
obligations of the savings and loan association, its directors, officers, stockholders and
members under its character, and, by order, to enforce the same;
(g) To fix rules or by order, in specific cases, after notice and hearing, the limits of loanable
funds, amount for investment and for discounting, and reserves for withdrawals and other
contingencies;
(h) To issue rules and regulations for the proper implementation of this Act, effective
administration of savings and loan associations, and to render advisory assistance to all
interested parties in order to carry out the intents and purposes of this Act;
(i) To conduct such investigations, take such remedial measures, impose such disciplinary
action and exercise all powers which are now or may hereafter be conferred upon it by Republic
Act Numbered Two hundred sixty-five, otherwise known as the Central Bank Act, in the
enforcement of this legislation.
Section 29. Penalties. – (a) Any owner, agent, manager, or other officer in charge of any
savings and loan association who, being thereunto required in writing by the Monetary Board or
by the official of the Central Bank in charge of savings and loan associations to comply with the
requirements of this Act, shall wilfully refuse any lawful examination into the affairs of such
institution shall be punished by a fine of not more than ten thousand pesos or by imprisonment
of not more than two years, or both, in the discretion of the court.
(b) The willful making of a false statement to the Monetary Board or to the official of the Central
Bank in charge of savings and loan associations or to his examiners shall be punished by a fine
not to exceed fifteen thousand pesos or by imprisonment of not more than three years, or both,
in the discretion of the court.
(c) Whenever any person or entity wilfully violates this Act or any order, instruction, rule or
regulation legally issued by the Monetary Board, the person or persons responsible for such
violation shall be punished by a fine of not more than five thousand pesos or by imprisonment of
not more than one year, or both, in the discretion of the court.
(c-1). Whenever any officer, employee, or agent of a savings and loan association makes false
entries in any association report or statement thereby affecting the financial interest of, or
causing damage to, the association or to any person, or without order of a court of competent
jurisdiction, discloses to any unauthorized person any information relative to the funds or
properties in the custody of the association belonging to private individuals, corporations, or any
other entity. Provided, That with respect to bank deposits, Section 4(a) of this Act shall prevail;
or accepts gifts, fees or commissions or any other form of remuneration in connection with the
approval of a loan from said association; or overvalues or aids in overvaluing any security for
the purpose of influencing in any way the action of the association on any loan, such officer,
employee or agent shall be punished by a fine of not more than two thousand pesos or
imprisonment for not more than one year, or both, at the discretion of the court.
(c-2). Whenever any applicant for a loan from, or borrower of, a savings and loan association
fraudulently overvalues property offered as security for a loan from the said association; or
furnishes false, or makes wilful misrepresentation of, material facts for the purpose of obtaining,
renewing, or increasing a loan or extending the period thereof; or attempts to defraud the said
association in the event of a court action to recover a loan; or offers any officer, employee or
agent of a savings and loan association any gift, fee, commission, or other form of
compensation in order to influence such association personnel into approving a loan application,
such applicant or borrower shall be punished by a fine of not more than two thousand pesos or
imprisonment for not more than one year, or both, at the discretion of the court.
(c-3). Whenever any examiner, officer or employee of the Central Bank of the Philippines, who
is assigned to examine, supervise, assist or render technical service to a savings and loan
associations, commits any of the acts enumerated in subsection c-1 of this section or connives
or aids in the commission of the same, he shall be punished by a fine of not more than one year
or both, at the discretion of the court.
(d) Whenever a savings and loan association persists in violating its charter or by-laws or any
law, or orders, instructions, rules or regulations legally issued by the Monetary Board or
whenever a savings and loan association persists in carrying on its business in an unlawful or
unsafe manner, the Board shall, by the Solicitor General, and without prejudice to the penalties
provided in the preceding paragraph of this section, file a petition in the Court of First Instance
praying the assistance of the court to compel the savings and loan association to discontinue
the violations or practices objected to in the petition of the Board. The Monetary Board may,
with the approval of the Court, take such action as the court may deem necessary to compel the
savings and loan association complained against to discontinue the violations or practices set
forth in the Board‟s petition, and, if necessary, the Board may, under order of the court, direct
the official of the Central Bank in charge of savings and loan associations to liquidate the
business of the institution.
Section 29-A. The provisions of Republic Acts Numbered Two hundred and sixty-five, as
amended, and Three hundred thirty-seven, as amended, insofar as they are applicable and not
in conflict with any provision of this Act, shall apply to savings and loan associations organized
hereunder.
Section 30. Effectivity. – This Act shall take effect upon its approval.
Approved, June 22, 1963.