New Central Bank Act

RA 7653
As amended by RA 11211
March 1, 2019

Primary Objective (RA 11211)

The primary objective of the BSP is to maintain
price stability conducive to a balanced and
sustainable growth of the economy.

Salient Amendments
The BSP now wields regulatory and examination
powers not only over quasi-banking operations
of non-bank financial institutions but also over
money service businesses, credit granting
businesses, and payment system operators.

In connection with this, the BSP is empowered

in
to authorize entities or persons to engage
money service businesses.

Salient Amendments
BSP's capitalization was increased from 50
Billion to P200 Billion.
BSP is also exempt from taxes on income
derived from its governmental functions.

I t restores the authority of BSP to issue debt

papers as aprt of its regular operations.

2017 Table of Specifications(TOS)
1. Legal Tender Power of Coins and Notes

2. Conservatorship
3. Receivership and Closures

Legal Tender Power

of Coins and Notes

Sections 49
Section 49. Definition of Currency. The word
word

"Currency" is for purposes of this

hereby defined,
Act, as meaning all Philippine notes and coins issued
or circulating in accordance with the provisions of this
Act.

Sec. 50. Exclusive Issue Power.

The Bangko Sentral shall have the sole power and
authority to issue currency, within the territory of the
Philippines. Xxx xxxx xxx
The Monetary Board may issue such regulations as it may
deem advisable in order to prevent the circulation of foreign
well as to prevent the
currency or of currency substitutes as
reproduction of facsimiles of Bangko Sentral notes.

The Bangko Sentral shall have the authority to investigate,

accordance
make arrests, conduct searches and seizures in
of the
with law, for the purpose of maintaining the integrity
Currency.
 Sec. 51. Liability for Notes and Coins
Notes and coins issued by the Bangko Sentral shall be
liabilities of the Bangko Sentral and may be issued only
against, and in amounts not exceeding, the assets of the
Bangko Sentral.

Said notes and coins shall be a first and paramount lien on

all assets of the Bangko Sentral.

The Bangko Sentral's holdings of its own notes and

coins
shall not be considered as part of its currency issue and,
or liabilities
accordingly, shall not form part of the assets
of the Bangko Sentral.
Sec. 52. Legal Tender Power cPALE
All notes and coins issued by the Bangko Sentral
shall be fully guaranteed by the Government
of the Republic of the Philippines and shall be
legal tender in the Philippines for all debts,
both public and private.

Legal Tender Power means that when currency

is offered in payment of debt, public or private
the same must be accepted.
Legal Tender Power

For coins, Bangko Sentral ng Pilipinas issued BSP Circular No.

537, series of 2006
Coins denominating P1, P5 and P10

Legal tender in amounts not exceeding P1,000.00

Coins denominating c10,c5 and c1

P100.00
Legal tender in amounts not exceeding
Sec. 55. Interconvertibility of Currency
The Bangko Sentral shall exchange, on demand and
without charge, Philippine currency of any
denomination for Philippine notes and coins of any
other denomination requested. If for any reason the
Bangko Sentral is temporarily unable to provide notes
and coins of the denominations requested, it shall
meet its obligations by delivering notes and coins
of
the denominations which most nearly approximate
those requested.

Sec. 56. Replacement of Currency Unfit for Circulation

The Bangko Sentral shall withdraw from
circulation and shall demonetize all notes and
coins which for any reason whatsoever are unfit
for circulation and shall replace them by adequate
notes and coins. Provided, however, That the Bangko
Sentral shall not replace notes and coins the identification of
which is impossible, coins which show signs of filing, clipping or
two-fifths of
perforation, and notes which have lost more than
their surface or all of the signatures inscribed thereon.
Notes
and coins in such mutilated condition shall be
withdrawn from circulation and demonetized
without compensation to the bearer.

Replacement of Currency Unfit for Circulation

However, the Bangko Sentral will not replace the

following
1. Notes and coins the identification is impossible
2. Coins which shows signs of filing, clipping and
perforation
3. Notes which have lost more than two-fifths (2/5) of
their surface or all of the signatures inscribed.
(NCBA,Sec. 56)
Sec. 57. Retirement of Old Notes and Coins

The Bangko Sentral may call in for replacement

notes of any series or denomination which are

more than five (5) years old and coins which are

more than ten (10)years old.

Notes and coins called in for replacement in
accordance with this provision shall remain legal
tender for a period of one (1) year from the date
of call.

Retirement of Old Notes and Coins

Notes of any series or denomination which are
more than five (5)years old may be called in for
replacement.
For coins, it will be called in for replacement if
the coin is more than ten (10) years old already.

Retirement of Old Notes and Coins

Notes and Coins called in for replacement will

remain legal tender for a period of one (1)
year from the date of call.

After this period, the notes and coins will cease

to be legal tender but during the following
year or longer period determined by the
any
Monetary Board, they may be exchanged at
in the Bangko Sentral
par and without charge
and to any authorized agents.
 Writing/ Putting Marks in Bank Notes

Any person who habitually writes or puts marks in bank

notes may be penalize under Anti-Mutilation Law or PD
247.

This law prohibits and penalizes the act of

1 Currency defacement (writing/putting marks)
2. Mutilation
3 Burning
4. Tearing or
intentional
5. Any manner showing act of willful and
mutilation

REMEDIES OF TROUBLED BANKS

Conservatorship
Receivership
Closure
The BSP may help banks having liquidity
problems by:
a. Granting emergency loans in an amount
not exceeding 50% of its total loan deposits and
deposit substitutes;
b. Appointing a conservator;

C.
Appointing a receiver and order liquidation
of the bank.
Sec. 29. Appointment of Conservator
Whenever, on the basis of a report submitted by the
appropriate supervising or examining department, the
Monetary Board finds that a bank or a quasi-bank is in a (1)
state of continuing inability or (2) unwillingness to
maintain a condition of liquidity deemed adequate to
the
protect the interest of depositors and creditors,
Monetary Board may appoint a conservator with such powers
as the Monetary Board shall deem necessary
to take charge of
the assets, liabilities and the management thereof, reorganize
due to said
the management, collect all monies and debts
to restore its
institutions, and exercise all powers necessary
and be responsible to
viability. The conservator shall report to overrule or
the Monetary Board and shall have the power
board of
revoke the actions of the previous management and
directors of the bank or quasi-bank.
 Who is a Conservator?

A conservator is
A person appointed by the Monetary Board to
take charge of the management of the bank or
quasi-bank and to exercise all other powers as
Board in
may be authorized by the Monetary
order to bring the bank or quasi-bank into
viable condition.
He must be competent and knowledgeable in
bank operations and management (NCBA
Sec.29)
What are the powers of Conservator?
The conservator may exercise the following
powers and functions:
1 To take charge of the assets, liabilities and
the management of the bank
2. To reorganize the management of the bank
3. To collect all monies and debts due to the
bank
4 To exercise all powers necessary to restobre
the viability of the bank
Sec. 29. Appointment of Conservator, confd.
Conservatorship of banks is an attempt to save
the bank from bankruptcy and ultimate
liquidation. It is a step short of liquidation.

The conservator should be competent and

knowledgeable in bank operations and
management. The conservatorship shall not
exceed one (1)year
The expenses attendant to the conservatorship
shall be borne by the bank or quasi-bank
Concerned.
 Sec. 29. Appointment of Conservator,
cont'd.
The Monetary Board shall
terminate the
Conservatorship when it is satisfied that the
institution can continue to operate on its own
and the conservatorship is
no longer
likewise
necessary. The conservatorship shall
be terminated should the Monetary Board, on
the basis of the report of the conservator or of
its own findings, determine that the
continuance in business of the institution
would involve probable loss to its depositors
or creditors.

Sec. 29, explained

What are the powers of the conservator?
a ) takes charge ofthe assets, liabilities and management,
b) reorganizes the management;
c) collects all monies/debts due;
d ) exercises all powers to restore its viability.

long shall conservatorship last?

How
Not exceeding one year
What are the qualifications of the conservator?

He must be knowledgeable in bank operations and

management.

OWhat are the instances when the conservatorship is

terminated or changed to Receivership?
a When the Monetary Board is satisfied that the
bank can operate on its own. In short, the bank is
already rehabilitated.

b) When the continued operation would involve a

probable loss to its depositors and creditors. It would
be best to close the bank rather than operate at a
loss.
Who pays the expenses of the conservator?
The bank or quasi-bank under conservatorship.
 What is Receivership

Receivership is the summary closure of a

bank by the Monetary Board without prior
notice and hearing after a finding that the
continuance in business would involve

probable loss to its depositors and creditors.

(Central Bank vs Court of Appeals, 220 SCRA 536)

Sec. 30. Proceedings in Receivership and Liquidation

(a) Is unable to pay its liabilities as they become due in the
ordinary course of business; Provided, That this _hall not
include inability to pay caused by, extraordinary demands
induced by financial panic in the banking community;
(b) Has insufficient realizable assets, as determined by the
Bangko Sentral, to meet its liabilities; or

c) Can not continue in business without involving

(c)
probable losses to its depositors or creditors; or
Has willfully violated a cease and desist order under
(d) Section 37 that has become final, involving acts or
to fraud or a dissipation of
transactions which amount
the assets of the institution; in which cases, the Monetary
Board may summar y and without need forprior hearing
forbid the institution from doing business in the Philippines
and designate the Philippine Deposit Insurance Corporation
as receiver of the banking institution.

For a quasi-bank, any person of recognized competence in

banking or finance may be designated as receiver.
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 of
disposition of any asset
the institution; Provided, That the receiver may deposit or place
The
the funds of the institution in non-speculative investments.
later than
receiver shall determine as soon as possible, but not
days from take-over, whether the institution may be
ninety (90)
rehabilitated or otherwise placed in such a condition so that it may
and
be permitted to resume business with safety to its depositors
That any determination
creditors and the general public; Provided,
for the resumption of business of the institution shall be subject to
Board.
prior approval of the Monetary
Receiver of Bank and QuasI-Bank
The Philippine Deposit Insurance Corporation (PDIC) is
the statutory receiver of the banking institution.

For a quasi-bank, any person or recognized competence

in banking or finance may be designated by the
Monetary Board as receiver. (NCBA, Sec. 30)

Close Now-Hear Later

No prior hearing is necessary in appointing

a receiver and in closing a bank.

It is enough that subsequent judicial

review is provided for.

Bank Holiday

Bank Holiday is a
situation where a bank
or quasi-bank suspends
the payment of its
deposit liabilities
continuously for more
than thirty (30) days.

What is the period of Receivership?

Receivership shall not exceed to a period of

ninety (90) days.
 Sec. 30, explained
Instances when a bank or quasi-bank shall be placed under
receivership:
Cannot continue business without involving probable loss
a)
to its depositors/creditors.
b) Insufficient realizable assets to meet its liabilities.
c)Violates willfully the cease and desist order
Unable to pay its liabilities when they become due in the
d)
ordinary course of business.

Inability to pay bank's liabilities induced by financial panic

constitutes Bank Run.

Liquidation
Liquidation is the is
proceeding that is
instituted by the Monetary Board upon
notice in writing to the board of directors
finding that the institutioon cannot be
rehabilitated and permitted to resume
business. (NCBA, Sec.30)
Sec. 30. Proceedings in Receivership and Liquidation

If the receiver determines that the institution cannot be

rehabilitated or permitted to resume business in accordance
with the next preceding paragraph, the Monetary Board shall
notify in writing the board of directors of its findings and direct
the receiver to proceed with the liquidation of the institution.
The receiver shall:
(1) File ex parte with the proper Regional Trial Court, and without
for
requirement of prior notice or any other action, a petition
assistance in the liquidation of the institution pursuant to a
Insurance
liquidation plan adopted by the Philippine Deposit
Corporation for general application to all closed banks. In
case
the
of quasi-banks, the liquidation plan shall be adopted by
Monetary Board.
(2) Upon acquiring jurisdiction, RTC shall, upon
motion by the institution, assist in the
enforcement of the individual liabilities of the
stockholders, directors and officers, and decide
on
other issues as may be material to
implement the liquidation plan adopted

Sec. 30. Proceedings in Receivership and Liquidation, contd.

(3) Convert the assets of the institution 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;
Institute such actions as may be necessary to collect and
(4) recover accounts and assets of, or defend any action against,
the institution.

an institution under receivership or liquidation

shall be
The assets of
deemed in custodia legis in the hands of the receiver and shall,
from the moment the institution was placed under such
be exempt from any order of
receivership or liquidation,
execution.
garnishment, levy, attachment, or

Sec. 31, explained.

OWhat is liquidation?
Liquidation of a bank or quasi-bank means closing
or winding the affairs of the business.
OWho designates the liquidator?
The Monetary Board designates an official of the
BSP as liquidator.
OThe actions of the Monetary Board in liquidating
a bank is final and executory unless set aside by
the court when such actions are arbitrary and
made in bad faith.
 Liquidation v. Rehabilitation

Rehabilitation
Liquidation
Liquidation connotes Rehabilitation contemplates
winding up and distribution continuance of corporate life
of assets to creditors. It is and activities in an effort to
the process of reducing the restore and reinstate the
assets to cash, discharging corporation to its former
dividing position of successful
liabilities and
surplus or loss. operation and solvency.

R.A. 8791
An Act Providing For The Regulation Of The Organization
And Operations Of Banks, Quasi-banks, Trust Entities
And For Other Purposes
Short Title: General Banking Law of 2000

2017 Table of Specifications (TOS)

Definition of Banks
Loans
Single Borrower'sLimit
Directors, Officers, Stockholders and
Related Interests (DOSRI) Accounts

Policy (Sec. 2, GBL)

"The State recognizes the vital role of banks in
providing an environment conducive to the
sustained development of the national
economy and the fiduciary nature of banking
that regquires high standards of integrity and
performance."
 Consequences of the nature of the business

.It is subject to heavy and close supervision

and/or regulation by the BSP.
I t is required to exercise utmost (highest)
diligence in the handling of deposits.
There are special rules on strikes and lockouts.
What is a BANK*?

Banks are entities

engaged in:
the lending of funds
obtained in the form of
deposits from the public.
(Sec. 3.1, GBL for short)

Requirements: (Sec. 8, GBL)

Stock corporation
- Funds obtained from
public
What are Quasi-Banks*?

Quasi-banks" (QB) refer to entities engaged in

the borrowing of funds through the issuance,
endorsement or assignment with recourse or
acceptance of deposit substitutes for
purposes of purchasing of
relending or
receivables and other obligations. (Sec. 4,
GBL)
Quasi-banking function is an inherent power
of Universal Banks and Commercial Banks.
 Incorporation and Operation
TO INCORPORATE:
Articles of Incorporation filed in the SEC
must be accompanied by the favorable
recommendation of the BSP.

TO OPERATE:
Certificate of Authority from the BSP

Organization of Banks
Banks maybe organized
subject to the following
conditions:

1. The entity is a stock

corporation.
2. Its funds are obtained from
the public.
Public means twenty (20) or more persons.

3. The minimum capital

requirements prescribed by the
Monetary Board for each
category of banks are satisfied
Board of Directors of Banks
A t least five (5), and a maximum
of fifteen (15) members of the
board of directors of bank
Two (2) of whom shall be Independent directors.

I n the case of a bank merger or

consolidation, the number of
directors shall not exceed twenty-
one.
(GBL Sec. 17)
INDEPENDENTDIRECTOR
A person other than an officer or
its
employee of the bank,
subsidiaries or affiliates or related
interests. (GBL, Sec. 15)
 The Fit and Proper Rule
The Fit and Proper Rule provides that
the Monetary Board has the power
pass upon and review the
qualifications and disqualifications
of individuals elected or appointed
bank directors or officers and
Disqualify those found unfit.

Purpose
To maintain the qualify of bank
management and afford better
protection to depositors and the
public in general.

Classifications of Banks*
1. Universal banks
2. Commercial banks
3. Thrift banks
i. Savings and mortgage banks
ii. Stocks savings and loan
associations
ii. Private development bank

4. Rural banks
5. Cooperative banks
6. Islamic banks
7. Other classifications of banks as
determined by the Monetary Board
of the Bangko Sentral ng Pilipinas.
(GBL Sec 3.2)
Universal Bank
Universal bank is a bank that have the
authority to exercise, in addition to the
powers authorized for a commercial bank,
(1) the powers of an investment house and
invest in non-allied
(2) the power to
enterprises. (Sec. 23)
BDO Unibank, Inc., BPI, RCBC, SBC, Union
E.g.
Bank, UCPB, Al-Amanah, DBP, LBP, ANZ Banking,
HSBC
 Commercial Bank
A
A Commercial bank is a bank that has, in
addition to the general powers incident to
corporations, all such powers as may be
necessary to carry on the business of commercial
banking. (Sec. 29, GBL)

E.g. Bank of Commerce, Citibank, Maybank

-

Phil., PBC, Veterans, BDO Private Bank

Rural Bank
Rural bank is a bank created to make needed
credit available and readily accessible in the
rural areas for the purpose of promoting
comprehensive rural development. (RA 7353,
Secs.2 and 3)
Eg. -
Providence Rural Bank, Rural Bank of Gattaran, Claveria Rural
Golden Rural
Bank, Rural Bank of Sanchez Mira, Rural Bank of Cauayan,
Bank of the Philippines, Banco Agricula

Rural Bank
Public officers can be directors of Rural banks.
While such officers are prohibited from being
directors or officers of other types of banks.
It can be organized or established by
cooperatives and corporations primarily
organized to hold equities in rural banks.
A Rural bank must be wholly owned by
by
Filipinos.
 Thrift Bank

Thrift banks shall include savings and

mortgage banks, private development banks,
and stock savings and loans associations
organized under existing laws, and any
banking corporation. (RA 7906, Sec. 3a)
E.g. Allied Savings Bank, Bank
of Makati, BPI Direct Savings
Bank, Century Savings Bank,
Express Savings Bank, Malayan
Bank, Win Bank

Cooperative Bank*
A cooperative bank is one organized by the
majority shares _of which is owned and controlled
coperatives_primarily to providee financial,
by
banking, and credit services to cooperatives
orgnizations and their members
The term "cooperative bank" shall include
cooperative rural bankS. {RA 6938, Sec. 100, as amended
by RA 9520)
E.g. Cooperative Bank of Cagayan, Coop of Bulacan, Coop
of La Union, Coop of Bohol

Islamic Bank
Al-Amanah Islamic Investment Bank of the
Philippines or Islamic Bank is created by RA
6848.
The Islamic Bank has its principal domicile and
place of business in Zamboanga City. (RA 6848.
Sec.2)
 Islamic Bank
The primary purposes of the Islamic Bank:
1. To promote and accelerate the socio-economic
development of the Autonomous Region by by
performing
i. Banking
i. Financing and
ii. Investment operations

commercial
2. To establish and participate in agricultural,
and industrial ventures based on the Islamic conceptof
banking. (RA 6848, Sec.3)

Capital Requirements of Banks

(BSP Circular No. 854, s.2004)

Bank Category Minimum Capitalization

P 3-20 billion
Universal banks
Commercial banks P 2-15 billion
Thrift banks P 200 million- P 1 billion

Rural and Cooperative P 10 million- P 200 million

banks

Powers and Functions

Only Universal banks and Commercial banks

can create and accept demand deposits
without separate authority from the
Monetary Board.
Only Universal banks may act as an

investment house.

Generally, universal
only banks and
commercial banks may be involved in quasi-
banking functions.
 Powers of Commercial Bank
1. Accepting drafts and issuing letters of credit
2. Discounting and negotiating promissory notes, drafts, bills of
exchange, and other evidences of debt
3. Accepting or creating demand deposits
4. Receiving other types of deposits and deposit substitutes
silver bullion
5. Buying and selling foreign exchange and gold or

Acquiring marketable bonds and other debt

securities
6.
such rules as the Monetary Board
7. Extending credit, subject to

may promulgate (GBL, Sec. 29)

Commercial bank may invest only in the equities of allied enterprises
which may either be financial or non-financial. (GBL, Sec. 30)

Powers of Universal Bank

A universal bank can exercise the powers and

function of a commercial bank.

In addition, universal bank can perform:

t h e powers of an investment house
t h e power to invest in non-allied
enterprises.

Top 10 Banks in the Philippines

(based on Total Assets, December 2015)
Rank Name of Bank Total Assets

1 BDO Unibank Inc. (BDO) 1.94trillion

Metrobank 1.46trillion

3 Bank of the Philippine Islands (BPI) 1.24trillion

4 Land Bank of the Philippines 1.20trillion

Philippines National Bank (PNB) 628.97billion
5
Security Bank Corporation 532.98billion
6
508.46billion
7 Development Bank of the Philippines (DBP)
8 China Banking Corporation (ChinaBank) |454.85billion
Rizal Commercial Banking Corporation (RCBC) 432.02billion
9
10 Union Bank of the Philippines (Unionbank) 375.94 billion
 Prudential Measures
Reserve Requirements
Single Borrower's Limit
Lending Restrictions to Bank Insiders
(DOSRI)
Loan-Loss Provisions
Deposit Insurance
Equity Investment Limits

.Capital Adequacy
BSP Lender of last resort

Functions of Banks

Basic Functions
1. Deposit function
2. Loan function
3. Other functions

Single Borrower's Limit* (SBL)

The CEILING or limit of the total amount of loans, credit
accommodations and guarantees that may be extended by
a
bank to any person, partnership, association, corporation or
other entity.

Limit:Not exceeding 25% of the net worth of the bank. (BSP

Circular No. 425)

Basis of Compliance: Total credit commitment of the bank

to the borrower

Increase: Total amount of loans, etc. may be increased by an

additional 10% of the net worth of such bank provided
- The additional liabilities of any borrower are adequately secured
Increase in Single Borrower's Limit
The total amount of loans, credit accommodations and
guarantees extended by the bank to any person, partnership,
association, corporation and other entity
MAY BE INCREASED BY AN ADDITIONAL TEN PERCENT (10%) OFTHE NET
WORTH OFSUCH BANK
Provided the additional liabilities of any borrower are
adequately secured by

Trust receipts
Shipping documents
Warehouse receipts
Other similar documents transferring or securing title
which
cOvering readily marketable, non-perishable goods
must be fully covered by insurance (GBL, Sec. 35.2)

Exclusions from other Limits

Loans and other credit accommodations secured by
obligations of the Bangko Sentral or the Philippine
Government;
Loans and other credit accommodations fully guaranteed
by the government as to the payment of principal and
interest
Loans and other credit accommodations covered by
bank
assignment of deposits maintained in the lending
and held in the Philippines;
under
Loans, credit accommodations and acceptances
letters of credit to the extent covered by margin deposits;
and
Other loans or credit accommodations which the Monetary
Board may specify as non-risk items (Sec. 35.5)

Directors, Officers, Stockholders and their

Related Interests (DOSRI) Accounts
DOSRI* account refers to the
1. Contracts of loans
2. Financial accommodations borrowing or

3. Security arrangement (guarantor, indorser or surety)

related
By directors, officers, stockholders and their
relative within the fourth
interests (may be the spouse,
degree whether of affinity or consanguinity, legitimate
or
illegitimate; general partner, co-owner, or any corporation
in which they
borrowing from bank in which he an officer or from
control more than 20% of the subscribed capital stock)
his bank or subsidiary of his bank.
DOSRI accounts are not prohibited but only subject to
restrictions and limitations.
Restrictions under Sec. 36 of the GBL

Procedural Requirement
Arms Length Rule

Reportorial Requirement
Aggregate Ceilings
Individual Ceilings
.Waiver of the Secrecy of his deposits

General Banking Law (GBL)

Restrictions on DOSRI Accounts

PROCEDURAL REQUIREMENT
Written approval of the majority of all
directors of the bank, excluding the director
concerned: Provided, that such written

approval shall not be required for loans, other

credit accommodations and advances granted
to officers under a fringe benefit plan
approved by the Bangko Sentral

ARMS LENGTH RULE

Dealings of a bank with any of its

directors, officers or stockholders and their
related interests shall be upon terms not

less favorable to the bank than those

offered to others.
 General Banking Law (GBL)
Restrictions on DOSRI Accounts

REPORTORIAL REQUIREMENT
The required approval shall be entered upon
the records of the bank and a copy of such
entry shall be transmitted forthwith to the
appropriate Supervising and Examining
Department of the Bangko Sentral.

AGGREGRATE CEILING RULE

Fifteen percent (15%)" of the total loan

portfolio of the bank OR one hundred
percent (100%) of the combined capital
accounts, whichever is lower.

INDIVIDUAL CEILING RULE

The outstanding loans, etc. is limited to an amount

equivalent to their respective unencumbered deposits

and book value of their paid-in capital contribution in
the bank.
The limitation or ceiling to loans, credit
will not apply
accommodations and guarantees (1) secured by assets
considered as non-risk by the Monetary Board and (2)
to loans, credit accommodations and advances to
officers in the form of fringe benefits approved by the
Monetary Board. (Sec.36)
 General Banking Law (GBL)
Restrictions on DOSRI Accounts

Waiver of the Secrecy of his Deposits

The borrower shall be required by the lending
bank to waive the secrecy of his deposits of
whateveer nature in all banks in the

Philippines.

Collaterals
Foreclosure of Mortgage

Redemption Period for Natural Persons

within one year after the sale of the real estate counted from
certificate of sale with the
thedate ofthe registration_of the
register of deeds.

Redemption for Juridical Persons

- pursuant to an extrajudicial foreclosure, shall have the right to
the
redeem the property but NOT after the registration of
which in no
certificate of foreclosure with the register of deeds
case shall be more than three (3)
months after foreclosure,
whichever is earlier.

Prohibited Acts of Banks

Banks are prohibited from engagin in

insurance business.
Outsourcing of functions are generally
prohibited. Example: A bank cannot hire
Company to accept deposits.
business in unsafe or unsound
Conducting
manner