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REPUBLIC ACT NO.

8791
• An Act providing for the
regulation of the organization
and operations of Banks, Trust
Entities and for other purposes.
THE GENERAL BANKING
LAW OF 2000

Republic Act No. 8791


SECTION 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 fiduciary nature of banking that
requires high standards of integrity and
performance.
PURPOSE

• 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.
SCOPE (SECTION 71)

• Primarily governs UNIVERSAL BANKS and


COMMERCIAL BANKS

• Suppletorily governs THRIFT BANKS and


other banking institution
GENERAL CONCEPTS
• BANKS – are entities engage of lending of funds
obtained in the form of deposits from the public.
(Sec. 3)

• QUASI-BANKS – are entities engaged in the


borrowing of funds through the issuance,
endorsement or assignment with recourse or
acceptance of deposit substitute for purposes of
relending or purchasing receivables and other
obligation (Sec. 4)
CLASSIFICATION OF BANKS
• 1. Commercial Banks;
• 2. Universal Banks
• 3. Thrift Banks, composed of:
• A. Stock Savings and Loan Associations
• B. Private Development Banks
• C. Savings and Mortgage banks
(RA 7906)
• 4. Rural Banks (RA 733)
• 5. Islamic Banks (RA 6848)
• 6. Cooperative Banks (RA 6938)
• 7. Other classification of banks as
determined by the Monetary Board
(MB) of the Bangko Sentral.
CHARACTERISTICS OF BANK DEPOSITS
• 1. Current and Savings deposits are LOANS TO
A BANK

• 2. Bank deposits are in the nature of


IRREGULAR DEPOSITS

• 3. Money deposited is commingled with other


money, constituting a COMMON FUND
PROBLEM
• A deposited his money in B Bank
• B Bank used the money
• A would like to withdraw, but B Bank cannot pay
• Is B Bank liable for Estafa?
NO
• Teofisto Guingona Jr. vs. City Fiscal of Manila
(128 SCRA 577)
AUTHORITY OF THE BANGKO SENTRAL
Supervisory Powers (Section 4)

Policy Direction: Ratios, Ceilings and Limitations

Authority to engage in Banking and Quasi-Banking


Function/Authority to Operate

Examination by the Bangko Sentral


ORGANIZATION, MANAGEMENT AND
ADMINISTRATION
CERTIFICATE OF AUTHORITY TO REGISTER (SEC. 14)
The Securities and Exchange Commission shall not
register the Articles of Incorporation of any bank, or any
amendment thereto, unless accompanied by a certificate
of authority issued by the Monetary Board, under its seal.

The Securities and Exchange Commission shall not


register the by-laws, or any amendment thereto, unless
accompanied by a certificate of authority from the Bangko
Sentral
CERTIFICATE OF AUTHORITY TO REGISTER
• Section 14.1 – That all requirement of existing laws and
regulations to engage in the business for which the applicant is
proposed to be incorporated have been complied with;
• Section 14.2 – That the public interest and economic conditions,
both general and local, justify the authorization; and
• Section 14.3 – That the amount of capital, the financing,
organization, direction, administration, as well as the integrity
and responsibility of the organizers and administrators
reasonably assure the safety of deposits and the public interest.
ORGANIZATION
• The Monetary Board may authorize the organization of
a bank or quasi-bank subject to the following
conditions:
• 1. that the entity is a stock corporation
• 2. that its funds are obtained from the public, which
shall mean 20 or more persons; and
• 3. that the minimum capital requirements prescribed by
the Monetary Board for each category of banks are
satisfied.
ISSUANCE OF STOCKS

Banks shall issue par value stocks only


(section 9)
TREASURY STOCKS
• No bank shall purchase/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. ( Section 9)
OWNERSHIP OF BANKS
• Foreign ownership

• Filipino stockholdings

• Stockholdings of Family Groups and Related


Interests
FOREIGN OWNERSHIP
• Foreign stockholdings
• Up to 40% of the voting stock of domestic
banks
• Foreigners - total equity participation
• Corporate stockholder – citizenship is
determined by citizenship of controlling
stockholders
FILIPINO OWNERSHIP

• Filipino stockholdings
• Section 11 applies to Filipinos and
domestic non-bank corporations.
• individual equity participation should not
exceed 40% of the voting shares
FAMILY GROUPS AND RELATED INTERESTS

• No prohibition

• Full disclosure
DIRECTORS AND OFFICERS

• A. Composition of Board
• B. Meetings
• C. Qualifications
COMPOSITION OF BOARD OF DIRECTORS (BOD)

• At least five (5), and a maximum of fifteen


(15) members of the BOD of bank, two (2)
of whom shall be independent directors.
• Non-Filipino (restriction, equity
participation)
• Public Officials (prohibition)
MEETINGS

• conducted through modern


technologies
• E.g. teleconferencing and video-
conferencing.
QUALIFICATIONS
• Fit and Proper Rule
• integrity,
• experience,
• education,
• training, and
• competence
ORDINARY CORPORATION BANKING CORPORATION
RESTRICTIONS