2004 UPDATES
2729
ATENEO de Manila LAW SCHOOLBANKING LAW I Outline
I. GENERAL CONCEPTS
A. Concept of Banking
1.Definition Sec. 3.1, GBL
2. Elements Republic v. Security Credit and Acceptance
Corporation, 19 SCRA 58 (1967); Central Bank v. Morfe, 20 SCRA 507
(1967); Baas v. Asia Pacific Finance Corporation, 343 SCRA 527
(2000)
a. Engaged in lending of funds
b. Obtained in the form of deposits
c. From the public, which shall mean 20 or more persons Sec.
8.2, GBLB. Banking Distinguished from Quasi-Banking
1.Elements of Quasi-Banking Sec. 4, par. 3, GBL; xSec. X234,
MRB
a. Borrowing of funds for borrowers own account
b. From 20 or more lenders at any one time
c. Through issuance, endorsement or assignment with recourse or
acceptance of deposit substitutes Sec. 95, NCBA
d. For purposes of relending or purchasing of receivables and
other obligations
2.Requirement of Separate License Sec. 6, par. 1, GBLC. Banks
Distinguished From Other Financial Institutions 1.Investment Houses
xSecs. 2 and 3, Investment Houses Law 2.Financing Companies xSec.
3(a), Financing Company Act
3.Investment Companies xSec. 4, Investment Company Act
4.Non-Stock Savings and Loans Associations xSec. 3, Revised
Non-Stock Savings and Loans Association Act of 1997
5.Cooperatives xArt. 3, Cooperative Code; But See xArt. 100,
Cooperative Code6.Insurance Companies xSec. 2, Insurance Code
D. Nature of Banking Business Sec. 2, GBL1.Vital Role in Economy
Simex International (Manila) Inc. v. Court of Appeals, 183 SCRA 360
(1990) a. Subject to reasonable regulation by the State Central
Bank of the Philippines v. Court of Appeals, 208 SCRA 652
(1992)
b. Strikes and Lockouts Sec. 22, GBL; xBSP Circular No. 299
(Series of 2001); Article 263(g), Labor Code2. Fiduciary Nature of
Banking Business
a. Degree of diligence required Simex International (Manila)
Inc. v. Court of Appeals, 183 SCRA 360 (1990); Bank of the
Philippine Islands v. Intermediate Appellate Court, 206 SCRA 408
(1992) b. When utmost diligence required(i) In dealing with
accounts of depositors Philippine Banking Corporation v. Court of
Appeals, 419 SCRA 487 (2004); Bank of the Philippine Islands v.
Casa Montessori Internationale, 430 SCRA 261 (2004)
(ii) In selection and supervision of employees Philippine
Commercial and International Bank v. Court of Appeals, 350 SCRA 446
(2001); Philippine National Bank v. Pike, 470 SCRA 328 (2005)(iii)
To be mortgagees in good faith Cruz v. Bancom Finance Corporation,
379 SCRA 490 (2002)
(iv) In the custody of documents; integrity of records Heirs of
Eduardo Manlapat v. Court of Appeals, 459 SCRA 412 (2005) (v)
Exception: does not cover transactions outside bank deposits Reyes
v. Court of Appeals, 363 SCRA 51 (2001)
c. Applicability to government financial institutions
xGovernment Service Insurance System v. Santiago, 414 SCRA 563
(2003) d. Liability for negligence
(i) Rules on determination of negligence Philippine Bank of
Commerce v. Court of Appeals, 269 SCRA 695 (1997); Consolidated
Bank and Trust Corporation v. Court of Appeals, 410 SCRA 562 (2003)
(ii) Award of actual, moral, compensatory or temperate damages
Araneta v. Bank of America, 40 SCRA 144 (1970); Prudential Bank v.
Court of Appeals, 328 SCRA 264 (2000); Citytrust Banking
Corporation v. Villanueva, 361 SCRA 446 (2001)
(iii) Right to recover against erring employee xPacific Banking
Corporation v. Court of Appeals, 173 SCRA 102 (1989)
E. Authority to Operate 1.Incorporation Secs. 17 and 46,
Corporation Code; Sec. 14, GBL2. Operation Sec. 6, GBLa. Authority
required Sec. 6, par. 1, GBLb. MB determination Sec. 6, par. 2,
GBLc. Unauthorized advertisement/ business representation Sec. 64,
GBL d. Change in name xP.C. Javier & Sons, Inc. v. Court of
Appeals, 462 SCRA 36 (2005)e. Sanctions for operating without
authority Sec. 6, par. 4, in rel. to Sec. 66, GBL; Republic v.
Security Credit and Acceptance Corporation, 19 SCRA 58 (1967);
Central Bank v. Morfe, 20 SCRA 507 (1967); xPerez v. Monetary
Board, 20 SCRA 502 (1957)
II. CLASSIFICATION OF BANKS
A. Universal Banks (UB) Sec. 3.2(a), GBL 1.Governing Law
xGBL2.Powers Sec. 23, GBL; xSec. X101(b)(1), MRBa.Commercial Bank
(KB) powers xSec. 29, GBL; xSec. X101(b)(2), MRB b.Investment House
powers xSec. 7, Investment Houses Law; xSEC Omnibus Rules and
Regulations for Investment Houses and Universal Banks Registered as
Underwriter of Securities(i)Definition/function of investment house
any enterprise which engages or purports to engage, whether
regularly or on an isolated basis, in the underwriting (i.e.,
guaranteeing distribution and sale) of securities of any kind
issued by another corporation xSec. 3, Investment Houses Law; xSec.
2(a), IRR of Investment Houses Law
(iI)Limitations on UBs exercise of investment house powers xSec.
101(b)(1), MRB:
(a) subject to pertinent laws and SEC regulations
(b) if investment house functions performed directly by UB, such
functions shall be undertaken by separate department/unit
(c) UB cannot perform functions of investment house both
directly (i.e., through a separate department/unit) and indirectly
(i.e., through a subsidiary)
c.To invest in equity of non-allied enterprises xSec. 27, GBL;
xSec. 1381, MRB B. Commercial Banks (KB) Sec. 3.2(b),
GBL1.Governing Law xGBL2.Powers xSec. X101(b)(2), MRBa.KB powers
Sec. 29, GBL(i)Accepting drafts
(ii) Issuing letters of credit (L/Cs)
(iii)Discounting and negotiating promissory notes (PNs), drafts,
bills of exchange, and other evidences of debt
(iv)Accepting or creating demand deposits
(i) Receiving other types of deposits and deposit
substitutes
(ii) Buying and selling foreign exchange and gold or silver
bullion
(iii) Acquiring marketable bonds and other debt securities
(iv) Extending credit
b.Engage in quasi-banking functions xSec. 6, par. 1, GBLc.To
invest in equity of allied enterprises xSecs. 31 and 32, GBL
d.To purchase, hold and convey real estate xSecs. 51 and 52,
GBL
e.Other services xSec. 53, GBL
(i)Receive in custody funds, documents and valuable objects
(ii) Act as financial agent and buy and sell, by order of and
for the account of customers, shares, evidences of indebtedness and
all types of securities
(iii) Make collections and payments for the account of others
and perform such other services for their customers as are not
incompatible with banking business
(iv) Upon prior MB approval, act as managing agent, adviser,
consultant or administrator of investment management/advisory/
consultancy accounts
(v) Rent out safety deposit boxes
f.To issue guarantees See xSec. 74, General Banking ActC. Thrift
Banks (TB) Secs. 3.2(c), GBL1.Governing Law Sec. 71, pars. 1 and 3,
GBL
a. Organization, ownership, capital requirements, powers,
supervision, and general conduct of business xThrift Banks Act
b. Net worth to risk assets ratio xSec. 71, par. 3, in rel. to
Sec. 33, GBLc. Other matters: GBL of suppletory application
2.Declaration of Policy Sec. 2, Thrift Banks
Act3.Definition/Purpose Sec. 3.2(c), GBL; Sec. 3(a), Thrift Banks
Acta.Composed of:
(i) Savings and mortgage banks
(ii) Stock savings and loans associations; and
(iii) Private development banks
b.For purposes of:
(i)Accumulating savings of depositors and investing them in
marketable bonds and other debt securities, commercial papers and
accounts receivable, drafts, bills of exchange, acceptances, or
notes arising out of commercial transactions
(ii)Providing short-term working capital, medium- and long-term
financing, to businesses engaged in agriculture, services, industry
and housing
(iii)Providing diversified financial and allied services for its
chosen market and constituencies specially for small and medium
enterprises and individuals
4.Powers Sec. 10, Thrift Banks Act; xSec. X101(b)(3), MRB D.
Rural Banks (RB) Sec. 3.2(d), GBL1.Governing Law Sec. 71, pars. 1
and 3, GBL;
a. Organization, ownership, capital requirements, powers,
supervision, and general conduct of business xRural Banks Act
b. Other matters: GBL of suppletory application
2.Declaration of Policy Sec. 2, Rural Banks Act3.Powers Sec. 12,
Rural Banks Act; xSec. X101(b)(4), MRBE. Cooperative Banks (Coop
Banks) Sec. 3.2(e), GBL1.Governing Law Sec. 71, pars. 1 and 3, GBL;
Art. 99, Cooperative Code
a. Organization, ownership, capital requirements, powers,
supervision, and general conduct of business xArts. 99 to 109,
Cooperative Codeb. Other matters: GBL of suppletory application
2.Declaration of Policy Art. 2, Cooperative
Code3.Definition/Functions Art. 100, Cooperative Code a.Definition:
Organized by, the majority shares of which is owned and controlled
by, cooperatives primarily to provide financial and credit services
to cooperatives
b.Functions xArt. 100 Cooperative Code4.Powers: Same as RB xSec.
X101(b)(5), MRB
F. Islamic Banks (IB) Sec. 3.2(f), GBL1.Governing Law Sec. 71,
par. 2, GBLa. Organization, ownership, capital requirements,
powers, supervision, and general conduct of business xIslamic Bank
Charter 2.Purpose Sec. 3, Islamic Bank Charter3.Powers Sec. 6,
Islamic Bank Charter; xSec. X101(b)(6), MRBG. Other Classifications
of Banks Sec. 3.2(g), GBL1.Land Bank of the Philippines (Land Bank)
xSecs. 74 to 100-A, Code of Agrarian Reform of the Philippines
2.Development Bank of the Philippines (DBP) xRevised Charter of
Development Bank of the Philippines
3.Philippine Veterans Bank (PVB) xPhilippine Veterans Bank Act;
xAn Act to Rehabilitate the PVB
4. Philippine National Bank (PNB) but now privatized xRevised
Charter of Philippine National Bank; xPhilippine National Bank v.
Velasco, 564 SCRA 512 (2008) 5.Pawnshops? First Planters Pawnshop,
Inc. v. Commissioner of Internal Revenue, 560 SCRA 606 (2008)
H. Foreign Banks 1.Entry of Foreign Banks a.Modes of entry Sec.
2, Foreign Banks Liberalization Act
(i)By acquiring, purchasing or owning up to 60% of the voting
stock of an existing domestic bank (ii)By investing in up to 60% of
a new banking subsidiary incorporated under the laws of the
Philippines
(iii)By establishing branches with full banking authority
b.Subject to MB approval, guidelines Secs. 2 and 3, Foreign
Banks Liberalization Actc.Foreign bank may avail of only 1 mode of
entry Sec. 2, Foreign Banks Liberalization Act; But may change from
one mode of entry to another xSubsec. 121.10, MRBd.Control of 70%
of resources or assets of entire banking system must be held by
banks which are at least majority-owned by Filipinos Sec. 73, par.
3, GBL; Sec. 3, par. 3, Foreign Banks Liberalization Acte.Equal
treatment of local banks Sec. 73, par. 4, GBL; Sec. 8, Foreign
Banks Liberalization Act2.Rules on Acquisition of Voting Stock in
Existing Domestic Bank
a.May own up to 60% voting stock of only 1 domestic bank Sec. 2,
Foreign Banks Liberalization Act
b.Within 7 years from GBL effectivity, MB may authorize foreign
bank:
(i)To acquire up to 100% of voting stock of only 1 domestic bank
Sec. 73, par. 1, GBL(ii)Which acquired up to 60% of voting stock
under the Foreign Banks Liberalization Act and Thrift Banks Act, to
further acquire up to 100% voting stock thereof Sec. 73, par. 2,
GBLc.MB shall secure the listing in the PSE of shares of stocks of
banks established under this mode of entry Sec. 3, par. 3, Foreign
Banks Liberalization Act
d.License to do business not required: Equity investment is not
deemed doing business Sec. 3(d), Foreign Investments Act of
1991
3.Rules on Acquisition of Voting Stock in New Domestic Bank
a.May own up to 60% of the voting stock of only 1 new banking
subsidiary Sec. 2, Foreign Banks Liberalization Act
b.Must be among top 150 foreign banks in the world or top 5 in
their country of origin as of application date Sec. 3, par. 2,
Foreign Banks Liberalization Act
c.MB shall secure the listing in the PSE of shares of stocks of
banks established under this mode of entry Sec. 3, par. 3, Foreign
Banks Liberalization Actd.Must be widely-owned and publicly-listed
in its country of origin, unless applicant is owned by government
thereof Sec. 3, par. 4, Foreign Banks Liberalization
Acte.Capitalization Sec. 4(i), Foreign Banks Liberalization
Actf.License to do business not required: Equity investment is not
deemed doing business Sec. 3(d), Foreign Investments Act of
1991
4.Rules on Establishing Branchesa.Governing Laws
(i)Creation, formation, organization or dissolution of
corporations; fixing of relations, liabilities, responsibilities,
or duties of stockholders, members, directors or officers of
corporations to each other and the corporation: Law of place where
foreign bank established Sec. 77, GBL
(ii)Entry into the Philippines through establishment of
branches: xForeign Banks Liberalization Act Sec. 72, par. 1,
GBL
(iii)Conduct of offshore banking business: xOffshore Banking
System Decree; xChapter 1, Part Three, BSP Circular No. 1389 Sec.
72, par. 2, GBL(iv)All other matters: GBL Sec. 77, GBLb.Must be
among top 150 foreign banks in the world or top 5 in country of
origin Sec. 3, par. 2, Foreign Banks Liberalization Act
c.Must be widely-owned and publicly-listed in country of origin,
unless government-owned Sec. 3, par. 4, Foreign Banks
Liberalization Actd.Time limitation on entry Sec. 6, Foreign Banks
Liberalization Act
e.Capitalization Sec. 4(ii), Foreign Banks Liberalization
Actf.Treatment of multiple branches Sec. 74, GBL; Citibank, N.A. v.
Sabeniano, 514 SCRA 441 (2007)g.Head office guarantee Sec. 75, GBL;
Sec. 5, Foreign Banks Liberalization Acth.Must be licensed to
transact business Sec. 133, Corporation Code; Hang Lung Bank, Ltd.
v. Saulog, 201 SCRA 137 (1991)
i.Summons and legal processes Sec. 76, GBL; Sec. 12, Rule 14,
1997 Rules of Civil Procedure
j.Revocation of license Sec. 78, GBL5.Offshore Banking Units
(OBU) Secs. 1(a) and 1(b), Offshore Banking System
Decreea.Qualification Sec. 2, Offshore Banking System Decree
b.Certificate of authority to operate Sec. 3, Offshore Banking
System Decree
c.Head office guarantee Sec. 4, Offshore Banking System
Decreed.Effects of certain laws Sec. 8, Offshore Banking System
Decree
III. DEPOSIT FUNCTION
A. Nature of Deposit
1.Deposits as Simple Loans Arts. 1953 and 1980, Civil Code;
Serrano v. Central Bank, 96 SCRA 96 (1980)
2.Bank as Debtor
a. Deposit is voluntary agreement; Know Your Customer standards
xMemorandum dated 1 October 2002; xSec. X262.1, MRBb. Bank acquires
ownership of money deposited; obligation to pay amount, but no
obligation to return the same money Guingona, Jr. v. City Fiscal of
Manila, 128 SCRA 577 (1984); BPI Family Bank v. Franco, 538 SCRA
184 (2007)c. Payment to proper party-depositor Fulton Iron Works
Co. v. China Banking Corp., 58 Phil. 206 (1930); Bank of the
Philippine Islands v. Court of Appeals, 232 SCRA 302 (1994)
d. Deposits are not preferred credits Central Bank v. Morfe, 63
SCRA 114 (1975)
e. Bank has right to compensation Gullas v. Philippine National
Bank, 62 Phil. 519 (1935); Republic v. Court of Appeals, 65 SCRA
186 (1975); Bank of the Philippine Islands v. Court of Appeals, 512
SCRA 620 (2007)
f. No breach of trust; Mandamus not a remedy xLucman v. Malawi,
511 SCRA 268 (2006)3.Banks Duty of Utmost Care Sec. 2, GBL
B. Kinds of Deposit
1.Demand Deposits Secs. 58-60, NCBA; xSecs. X201 to X204,
MRB
a.For UB and KB Sec. 33, GBL
b.For TB Sec. 10(b), Thrift Banks Actc.For RB/Coop Bank Sec.
12(b), Rural Banks Act; xSubsec. X201.1, MRBd.For Islamic Banks
Sec. 6, par. (7)(a), Islamic Bank Charter2.Savings Deposits xSec.
X213 and X214, MRB; International Exchange Bank v. Commissioner of
Internal Revenue, 520 SCRA 688 (2007)3.Negotiable Order of
Withdrawal (NOW) Accounts xSecs. X223 to X226, MRB; People v.
Reyes, 454 SCRA 635 (2005)4.Time Deposits xSecs. X231, MRB; BPI
Family Savings Bank v. First Metro Investment Corporation, 429 SCRA
30 (2004)
5.Foreign Currency Deposits Secs. 2 and 3, FCDA
6.Money Market Placements? Allied Banking Corporation v. Lim Sio
Wan, 549 SCRA 504 (2008)
C. Capacity of Depositors
1.Minors Sec. 1, Presidential Decree No. 734; Sec. 22, Thrift
Banks Act2.Married Women Sec. 5, Republic Act No.
71923.Corporations: Through signatories designated by Board of
Directors Sec. 23, Corporation Code4.Bank Officers and Employees:
Prohibited from maintaining demand deposits or current accounts in
banking office where they are assigned xSec. X204, MRB
D. Opening of Deposit Accounts
1.Know Your Customer Standards: At least 3 specimen signatures
updated every 5 years, ID optional xSubsec. X262.1,
MRB2.Prohibitions:
a.Anonymous Accounts/Fictitious Names Sec. 9(a), AMLA
b.Pseudonyms xArt. 178, Revised Penal Code; xCommonwealth Act No.
142, as amended; xArts. 379-380, Civil Code
c.Exception: Numbered accounts Sec. 9(a), AMLA; Sec. 3(1),
FCDA3.Joint Accounts Arts. 485, 1207 and 1208, Civil CodeE.
Administration of Deposit Accounts1.Deposit of Fundsa. Delivery
required Art. 1934, Civil Codeb. Acceptability of withdrawal slips
as deposits Firestone Tire & Rubber Co. of the Phil. v. Court
of Appeals, 353 SCRA 601 (2001)
2.Withdrawal of Funds
a. From current accounts: Allowing withdrawal of value of check
drawn:
(i)In case of insufficiency of funds Moran v. Court of Appeals,
230 SCRA 799 (1994); Villanueva v. Nite, 496 SCRA 459
(2006)(ii)Prior to clearing Associated Bank v. Tan, 446 SCRA 282
(2004)
(iii)In favor of other persons when check crossed Traders Royal
Bank v. Radio Philippines Network, Inc., 390 SCRA 608 (2002)
(iv)By issuing a managers check Equitable PCI Bank v. Ong, 502
SCRA 119 (2006)
b. From savings accounts: Presentation of passbook and
withdrawal slip Bank of the Philippine Islands v. Court of Appeals,
326 SCRA 641 (2000)
c. From time deposits: Surrender of certificate of deposit Far
East Bank and Trust Company v. Querimit, 373 SCRA 665 (2002)
d. From foreign currency deposit accounts: Based on contract
Sec. 5, FCDAe. If deceased depositor:
(i)Tax clearance required Sec. 97, NIRC; But See: xSec.
28(A)(1)(a) and (6), NIRC(ii)Survivorship Agreements Vitug v. Court
of Appeals, 183 SCRA 755 (1990)
3.Booking of Deposits xSec. X261, MRB
4.Interest on Deposits Citibank, N.A. v. Cabamongan, 488 SCRA
517 (2006)a.Not subject to interest ceilings xSec. X242, MRBb.Time
of payment of interest on time deposits xSubsec. X242.1,
MRBc.Matured time deposits xSubsec. X242.2, MRBd.Disclosure
requirements xSec. X243, MRB
5.Closing of Account Far East Bank and Trust Company v. Pacilan,
Jr., 465 SCRA 372 (2005)
F. Secrecy of Bank Deposits
1.General Rules
a.Rationale: right to privacy Art. III, Secs. 2, 3, and 7 and
Art. II, Sec. 28, 1987 Constitution; Republic v. Eugenio, 545 SCRA
384 (2008)b.Applicable law Intengan v. Court of Appeals, 377 SCRA
63 (2002)
c.Applicability of exclusionary rule Art. III, Secs. 2 and 3,
1987 Constitution; Ejercito v. Sandiganbayan (Special Division),
509 SCRA190 (2006)2.Rules for Peso Deposits a.Coverage Sec. 2, Law
on Secrecy of Bank Deposits; Ejercito v. Sandiganbayan (Special
Division), 509 SCRA190 (2006)b.Prohibitions Secs. 2 and 3, Law on
Secrecy of Bank Deposits; Secs. 55.1(b) and 55.4, GBL
c.Exceptions(i)Under the Law on Secrecy of Bank Deposits Sec. 2,
Law on Secrecy of Bank Deposits(a)Upon written permission of the
depositor or investor:(1)DOSRI loans Sec. 26, NCBA; xSec. X337,
MRB(2)For loans secured by hold-out or assignment of CTDs xSec.
X315(f), MRB(b)In cases of impeachment
(c)Upon the order of a competent court in cases of bribery or
dereliction of duty of public officials
(d)In cases where the money deposited or invested is the subject
of litigation (ii)Under the Anti-Graft and Corrupt Practices Act:
In cases involving unexplained wealth Sec. 8, Anti-Graft and
Corrupt Practices Act; Philippine National Bank v. Gancayco, 15
SCRA 91 (1965); Banco Filipino Savings and Mortgage Bank v.
Purisima, 161 SCRA 576 (1988)
(iii)Under the Ombudsman Act Sec. 15(8), Ombudsman Act; Marquez
v. Disierto, 359 SCRA 772 (2001); Ejercito v. Sandiganbayan
(Special Division), 509 SCRA190 (2006)(iv)Under the Plunder Law
Secs. 1(d) and 4, Plunder Law; Ejercito v. Sandiganbayan (Special
Division), 509 SCRA190 (2006)(v)Under the AMLA Sec. 11, AMLA;
Republic v. Eugenio, 545 SCRA 384 (2008)
(a)Upon order of a competent court in cases of violation of the
AMLA where there is probable cause of money laundering, except that
no court order is required in cases of:
(1)kidnapping for ransom
(2)drug trafficking
(3)hijacking, destructive arson and murder, including those
perpetrated by terrorists against non-combatants and similar
targets
(b)BSP inquiry into or examination of deposits or investments
with any bank, when the inquiry or examination is made in the
course of the BSPs periodic or special examination
(vi)Independent auditor hired by the bank to conduct its regular
audit, provided that the examination is for audit purposes only and
the results thereof shall be for the exclusive use of the bank xDOJ
Opinion No. 243 (Series of 1957); xMarquez v. Disierto, 359 SCRA
772 (2001)(vii)Under the PDIC Charter Sec. 8, par. Eighth, PDIC
Charter(vii)Under the Human Security Act Secs. 27-43, Human
Security Act(viii)Under the NIRC Sec. 6(F), NIRC(a)Upon inquiry by
the Commissioner of Internal Revenue for the purpose of determining
the net estate of a deceased depositor (b)In case a taxpayer files
and application to compromise his tax liabilities on the ground of
financial incapacity (waiver required)(ix)Under the Unclaimed
Balances Law Disclosure to the Treasurer of the Philippines for
dormant deposits for at least ten (10) years Sec. 2, Unclaimed
Balances Law; xDOJ Opinion No. 104 (Series of 1975)(x)Under the
Rules of Court (a)Garnishment Sec. 9(c), Rule 39, 1997 Revised
Rules of Civil Procedure; China Banking Corporation v. Ortega, 49
SCRA 356 (1973); xPhilippine Commercial and Industrial Bank v.
Court of Appeals, 193 SCRA 452 (1991)(b)Preliminary attachment Sec.
10, Rule 57, 1997 Revised Rules of Civil Procedure;d.Penalty for
Violation Sec. 5, Law on Secrecy of Bank Deposits3.Rules for
Foreign Currency Deposits
a.Coverage Sec. 8, FCDA; Estrada v. Disierto, 445 SCRA 655
(2004); Salvacion v. Central Bank of the Philippines, 278 SCRA 27
(1997) b.Prohibition Sec. 8, FCDAc.Exceptions(i)Upon written
consent of the depositor Sec. 8, FCDA; China Banking Corporation v.
Court of Appeals, 511 SCRA 110 (2006)
(ii)Upon order of a competent court in cases of violation of the
AMLA where there is probable cause of money laundering, except that
no court order is required in specified cases Sec. 11, AMLA
(iii)BSP inquiry into or examination of deposits or investments
with any bank, when the inquiry or examination is made in the
course of the BSPs periodic of special examination of said bank
Sec. 11, AMLA
(iv)Under the PDIC Charter Sec. 8, par. Eighth, PDIC
Charterd.Penalty for Violation Sec. 10, FCDA4.Rules for Deposits in
Specific Banks and Financial Institutions
a.Under the GBL Sec. 55.1(b), GBLa.Islamic Banks Secs. 33 and
45, Islamic Bank Charterb.Rural Banks Sec. 26(a)(2), Rural Banks
Act
c.Thrift Banks Sec. 21(a)(2), Thrift Banks Act
d.Non-Stock Savings and Loans Association xSec. 6, Revised
Non-Stock Savings and Loans Association Act of 1997G.
Garnishment
1.Procedure Sec. 9(c), Rule 39, 1997 Rules of Civil Procedure2.
Exempt Deposits
a.Foreign currency deposits Sec. 8, FCDA; But See xSalvacion v.
Central Bank of the Philippines, 278 SCRA 27 (1997)
b.Under the Rules of Court Sec. 13, Rule 39, 1997 Rules of Civil
Procedure3.No violation of Law on Secrecy of Bank Deposits xChina
Bank v. Ortega, 49 SCRA 356 (1973); xPhilippine Commercial and
Industrial Bank v. Court of Appeals, 193 SCRA 452 (1991)
4.Liability for Release Rizal Commercial Banking Corporation v.
De Castro, 168 SCRA 49 (1988); xPhilippine Commercial and
Industrial Bank v. Court of Appeals, 193 SCRA 452 (1991)
H. Deposit Insurance
1.Coverage Sec. 4, PDIC Charter; Sec. 9, FCDA2.Amount Insured:
Maximum of P500,000.00 Sec. 4(g), PDIC Charter 3. Rules on Payment
Secs. 10(b) to (d), PDIC Charter
4.Liability of PDIC Philippine Deposit Insurance Corp. v. Court
of Appeals, 283 SCRA 462 (1997)I. Unclaimed Balances 1.Definition
Sec. 1, Unclaimed Balances Law
2.Report to Treasurer; Notice, Posting, Publication Sec. 2,
Unclaimed Balances Law; Republic v. Court of Appeals, 345 SCRA 63
(2000)
3. Escheat Proceedings Sec. 3, Unclaimed Balances Law4.Effects
of Compliance/Non-Compliance Secs. 4 and 5, Unclaimed Balances
Law
J. Anti-Money Laundering Act 1.Declared Policy Sec. 2,
AMLA2.Covered Transactions: Transaction, in cash or other
equivalent monetary instrument in excess of P500,000 within 1
banking day Sec. 3(b), AMLA3.Suspicious Transactions: Transaction
with Covered Institution, regardless of amount involved, where any
of the enumerated suspicious circumstances exist Sec. 3(b-1),
AMLA4.Covered Institutions Sec. 3(a), AMLAa.Banks and other
entities, their subsidiaries and affiliates, supervised/regulated
by BSP
b.Insurance companies and other entities supervised/regulated by
Insurance Commission
c.SEC supervised/regulated entities
5.Obligations of Covered Institutions Sec. 9, AMLAa.Customer
Identification: Establish and record, and maintain a system of
verifying true identities of clients, including legal existence and
organizational structure of corporate clients, and their
representatives, based on official documents
b.Record Keeping: Keep records for 5 years
c.Reporting of Covered and Suspicious Transactions: Report
Covered Transactions and Suspicious Transactions to AMLC, within 5
working days from occurrence, which shall not violate the Law on
Secrecy of Bank Deposits, FCDA, and GBL
6.Money-Laundering Crime: Committed when the proceeds of an
Unlawful Activity are transacted to make them appear to have
originated from legitimate sources, by the following acts: Sec. 4,
AMLA
a.Transacting or attempting to transact, with monetary
instrument or property, knowing it represents, involves, or relates
to proceeds of any Unlawful Activity
b.Facilitating money-laundering referred to in Item (a) above,
by failing to perform an act
c.Failing to disclose and file report with AMLC of any monetary
instrument or property as required under AMLA
7.Unlawful Activities: Act or omission or series or combination
thereof, involving or having relation to the crimes enumerated Sec.
3(i), AMLA8.Jurisdiction: Regional Trial Court/Sandiganbayan Sec.
5, AMLA9.Prosecution Sec. 6, AMLA
10.Prohibition against Political Harassment Sec. 16,
AMLA11.Penalties and Other Consequences
a.Penalties Sec. 14, AMLA
(i)Money laundering
(ii)Failure to keep records
(iii)Malicious reporting
(iv)Breach of confidentiality
b.Forfeiture Sec. 12, AMLA; xRules on Civil Forfeiture; Republic
v. Glasgow Credit and Collection Services, Inc., 542 SCRA 95 (2008)
12.Freezing of Accounts: Issued by Court of Appeals upon ex-parte
application of AMLC after determination of probable cause that
monetary instrument or property is in any way related to Unlawful
Activity, for 20 days unless extended Sec. 10, AMLA; Republic v.
Eugenio, 545 SCRA 384 (2008) 13.Examination of Accounts Sec. 11,
AMLA; xRepublic v. Eugenio, 545 SCRA 384 (2008)a.Upon order of a
competent court in cases of violation of the AMLA where there is
probable cause of money laundering, except that no court order is
required in cases of kidnapping for ransom, drug trafficking,
hijacking, destructive arson and murder, including those
perpetrated by terrorists against non-combatants and similar
targets.
b.BSP inquiry into or examination of deposits or investments
with any bank, when the inquiry or examination is made in the
course of the BSPs periodic of special examination of said bank to
ensure compliance with AMLA 14.AMLC; Composition and Powers Sec. 7,
AMLA15.Mutual Assistance among States Sec. 13, AMLA
IV. LOAN FUNCTION
A.Basic Concepts
1.Grant, Purpose, and Requirement of Loans Secs. 39 and 40, GBL;
xSecs. X301, X302 and 304, MRB; United Coconut Planters Bank v.
Ramos, 415 SCRA 596 (2003); Banco de Oro-EPCI, Inc. v. JAPRL
Development Corporation, 551 SCRA342 (2008)2.Prohibited
Transactions Secs. 55.1(c), 55.1(d), and 55.2, GBL3.MB
Regulation
a.Unsecured loans Sec. 41, GBLb.Other security requirements Sec.
42, GBL; Sec. 106, NCBAc.Terms and conditions Sec. 43, GBLd.Renewal
or extension Sec. 48 GBL; xSec. X332, MRBe.Provisions for losses
and write-offs Sec. 49 GBL; xSecs X302 and X306 MRB, xRepublic Act
No. 9182 (Special Purpose Vehicle Act of 2002)
4.Development Assistance Incentives Sec. 46, GBL
5.Disclosure Requirements Secs. 2, 4 and 6, Truth in Lending
Act; xSec. X307, MRB; New Sampaguita Builders Construction, Inc.
(NSBCI) v. Philippine National Bank, 435 SCRA 565 (2004)B.Terms and
Conditions
1.Amortization Sec. 44, GBL2.Pre-Payment Sec. 45, GBL3.Interest
Art. 1956, Civil Codea.No ceiling xSec. 1-a, 4-a, 45 of Usury Law;
xSec. X305, MRB; Bulos, Jr. v. Yasuma, 527 SCRA 727 (2007); Bacolor
v. Bango Filipino Savings and Mortgage Bank, Dagupan City Branch,
515 SCRA 79 (2007) b.In the absence of stipulation xSec. X305,
MRBc.Escalation clause; when allowable Art. 1308, Civil Code; xSec.
X305, MRB; Philippine National Bank v. Court of Appeals, 196 SCRA
536 (1991); New Sampaguita Builders Construction, Inc. (NSBCI) v.
Philippine National Bank, 435 SCRA 565 (2004); But See xLlorin, Jr.
v. Court of Appeals, 218 SCRA 426 (1993)d.Floating rates of
interest xSec. X305, MRB; Consolidated Bank and Trust Corporation
(Solid Bank) v. Court of Appeals, 356 SCRA 671
(2001)4.Extraordinary Inflation/Deflation Art. 1250, Civil Code;
Equitable PCI Bank v. Ng Sheung Ngor, 541 SCRA 223 (2007)
5.Restructuring xSec. X322, MRBC.Single Borrowers Limit Sec. 35,
GBL1.Ceilings Sec. 35.1 and 35.2, in rel. to Sec. 24, GBL; xSec.
X303, MRB 2.What is Included in Ceiling Secs. 35.3 to 35.7, GBL;
xSubsec X303.1 to 303.4, MRB
3.Exceptionsa.As MB may otherwise prescribe for reasons of
national interest Sec. 35.1, GBLb.Deposits of RB with government
financial institutions Sec. 17, Rural Banks Act4.Sanctions xSubsec.
303.5, MRB
D.DOSRI Accounts Sec. 36, GBL; Sec. 26, NCBA
1.Coverage: Persons and Transactions Covered xSecs. X326 to
X329, MRB2.Ceilings: Individual and Aggregate Ceilings and
Exclusions xSecs. X330 to X332, MRB 3.Requirements: Procedural and
Reportorial xSecs. X334 and X335, MRB4.Sanctions xSec. X336,
MRBE.Collateral/Security
1.Unsecured Loans xSec. X319, MRB2.Joint and Solidary Signature
(JSS) Art. 2047, Civil Code; xArts. 1207 to 1225, Civil Code;
Security Bank and Trust Company, Inc. v. Cuenca, 341 SCRA 781
(2000); Philippine National Bank v. Court of Appeals, 198 SCRA 767
(1991); xOng v. Philippine Commercial Industrial Bank, 448 SCRA 705
(2005)3.Loans Secured by Chattels or Intangible Property
a.Limits Sec. 38, GBL; xSec. X313, MRBb.Types of
security(i)Chattel Mortgage xChattel Mortgage Law
(ii)Pledge xArts. 2085-2123, Civil Code(iii)Hold-out and/or
Assignment xArts. 1624-1635, Civil Code 4.Loans Secured by Real
Estate Mortgages (REMs)
a.Limits Sec. 37, GBL; xSec. X311, MRBb.Mortgagee in good faith
vs. mortgagee in bad faith Philippine National Cooperative Bank v.
Carandang-Villalon, 139 SCRA 570 (1985) Development Bank of the
Philippines v. Court of Appeals, 331 SCRA 267 (2000); Canlas v.
Court of Appeals, 326 SCRA 425 (2000); xMetropolitan Bank and Trust
Co. v. Pascual, 547 SCRA 246 (2009)c.Acquisition of property by way
of satisfaction of claims Sec. 52, GBL
d.Dragnet Clause Union Bank of the Philippines v. Court of
Appeals, 471 SCRA 751 (2005) 5.Foreclosure of REMs Sec. 47,
GBLa.Types of foreclosure(i)Judicial Rule 68, Rules of
Court(ii)Extra-judicial Act No. 3135, as amended(iii)Specific rules
for TB/RB/Coop Banks Sec. 6, Rural Banks Act; xSubsecs.2311.4 and
3311.4, MRBb.Right and period of redemption Sec. 47, par. 1, GBL;
xSC Circular AM No. 99-10-05 (as further amended on 7 August
2001)(i) Natural persons vs. juridical persons Sec. 47, par. 2,
GBL(ii) Exercise of right of redemption Metropolitan Bank and Trust
Company v. Tan, 569 SCRA 814 (2009)
(iii) Extension of redemption period Lazo v. Republic Surety and
Insurance Co., 31 SCRA 329 (1970); Ibaan Rural Bank, Inc. v. Court
of Appeals, 321 SCRA 88 (1999)
(iv) Tolling of redemption period Sumerariz v. Development Bank
of the Philippines, 21 SCRA 1374 (1967); Peoples Financing
Corporation v. Court of Appeals, 192 SCRA 34 (1990); But see
Consolidated Bank and Trust Corporation (Solidbank) v. Intermediate
Appellate Court, 150 SCRA 591 (1987); See also CMS Stock Brokerage,
Inc. v. Court of Appeals, 275 SCRA 790 (1997)
(v) Payment of CGT and DST xBIR Ruling 0046-2001; Letter dated
26 September 2001 addressed to Ayala Life.c.Redemption Price Sec.
47, par. 1, GBL; Sec. 6, Act No. 3135, as amended; Sec. 28, Rule
39, 1997 Rules of Civil Procedure; Union Bank of the Philippines v.
Court of Appeals, 359 SCRA 480 (2001); Development Bank of the
Philippines v. West Negros College, Inc., 391 SCRA 330 (2002)
d.Possession Sec. 47, par. 1, GBL; Samson v. Rivera, 428 SCRA
759 (2004)e.Injunction and Bond Sec. 47, par. 1, GBL
V. INVESTMENTS AND OTHER FUNCTIONS OF BANKSA.Equity
Investments1.Limits on Equity Investments of UBa. In general Sec.
24, par. 1, GBL; xSec. X376, MRB; xAgan, Jr. v. Philippine
International Air Terminals Co., Inc., 402 SCRA 612 (2003) (i)Must
be with prior approval of MB Sec. 24, par. 4, GBL
(ii)Total investment in equities of allied and non-allied
enterprises Sec. 24.1, GBL; xSec. X383(b), MRB
(iii)Investment in equity of any one enterprise Sec. 24.2, GBL;
xSec. X383(a), MRB(iv)Definition of net worth Sec. 24, par. 3,
GBL
(v)Do the foregoing limits apply to debt-to-equity conversions?
No. xSubsec. X116.3(i)., MRB; xSec. 52, GBL (by analogy)
(vi)Sanctions if without prior MB approval xSec. 385, MRBb. In
specific areas (i)In financial allied enterprises Sec. 25, GBL;
xSec. 378, MRB
(ii)In Venture Capital Corporations (VCCs) xSec. X379,
MRB(iii)In non-financial allied enterprises Sec. 26, GBL; xSec.
X380, MRB(iv)In non-allied enterprises Sec. 27, GBL; xSec. 1381,
MRB(v)In quasi-banks Sec. 28, GBL(vi)In subsidiaries and affiliates
abroad - xSec. X382, MRB2. Limits on Equity Investments of KBa. In
general Sec. 30, par. 1, GBL(i) Must be with prior approval of MB
Sec. 30, par. 3, GBL
(ii)Total investment in equities of allied (financial or
non-financial) enterprises Sec. 30.1, GBL
(iii)Investment in equity of any one enterprise Sec. 30.2,
GBL
(iv)Definition of net worth Sec. 24, par. 3, GBL(v)Sanctions if
without prior MB approval xSec. 385, MRBb. In specific areas (i)In
financial allied enterprises Sec. 31, GBL(ii)In VCCs xSec. X379,
MRB(iii)In non-financial allied enterprises Sec. 32, GBL
(iv)In quasi-banks Sec. 28, GBL
(v)In subsidiaries and affiliates abroad - xSec. X382,
MRB3.Limits on Equity Investments of TB Sec. 12, Thrift Banks
Act4.Limits on Equity Investments of RB Sec. 13, Rural Banks
Act;
5.Limits on Equity Investments of Islamic Bank Sec. 6(11),
Islamic Bank CharterB. Other KB Functions Sec. 29, GBL; xBSP
Circular No. 271 (Series of 2001)1.Non-Core/Quasi-Banking Functions
Sec. 4, GBL; Sec. 95, NCBA2.Issuing L/Cs Sec. 105, NCBA; Bank of
America, NT & SA v. Court of Appeals, 228 SCRA 357 (1993);
Transfield Philippines, Inc. v. Luzon Hydro Corporation, 443 SCRA
307 (2004); Vintola v. Insular Bank of Asia and America, 150 SCRA
578 (1987)
3.Foreign Exchange Operations: Buying and selling foreign
exchange and gold or silver bullion Secs. 76-80, NCBA
C.Other Services Sec. 53, pars. 1-3, GBL
1.Custodian of Funds, Documents, Valuable Objects Sec. 53.1,
GBL2.Financial Agent Sec. 53.2, GBL; Panlilio v. Citibank, N.A.,
539 SCRA 69 (2007)3.Collection/Payment Agent Sec. 53.3,
GBL4.Financial Adviser Sec. 53.4, GBL5.Renting Out Safety Deposit
Boxes Sec. 53.5, GBL; CA Agro-Industrial Development Corporation v.
Court of Appeals, 219 SCRA (1993); Sia v. Court of Appeals, 222
SCRA 24 (1993)
D.Other Functions/Operations1.Issue Guarantees See Sec. 74,
General Banking Act
2.Act as Correspondent Bank Feati Bank & Trust Company v.
Court of Appeals, 196 SCRA 576 (1991); Philippine National Bank v.
Court of Appeals, 259 SCRA 174 (1996)
3.Credit Card Operations xSec. X320, MRBE.Trust Operations Secs.
79 to 93, GBLF.Prohibited Acts
1.Insurance business Sec. 54, GBL; Sec. 2, Insurance Code
2.Outsourcing of bank functions Sec. 55(1)(e), GBL
VI. BANK REGULATIONS
A. Ownership/Capitalization of Banks
1.Organization Sec. 8, GBL; xBasic Guidelines for Establishment
of Banks (BSP Circular-Letter dated 13 July 1998)a.Stock
corporation Sec. 8.1, GBL(i)Issuance of stocks Sec. 9,
GBL(ii)Treasury stocks Sec. 10, GBL; Fua Cun v. Summers, 44 Phil.
705 (1923); Filipinas Mils, Inc. v. Dayrit, 192 SCRA 177 (1990)
b.Funds obtained from the public (20 or more persons) Sec. 8.2,
GBLc.Minimum capital requirements (amount in million Pesos) Sec.
8.3, GBL; xBSP Circular No. 257 (Series of 2000)
d.Capability and other requirements Sec. 8, par. 2,
GBL2.Stockholdings
a. Foreign stockholdings
(i) Individuals and non-banks Sec. 11, GBL; xBSP Circular No.
256 (Series of 2000)(ii) Foreign banks Secs. 11 and 73, GBL;
Foreign Banks Liberalization Actb. Filipino stockholdings Sec. 11,
par. 1, GBL; xBSP Circular No. 256 (Series of 2000); xBSP Circular
No. 332 (Series of 2002)c. Stockholdings of family groups or
related interests Secs. 12 and 13, GBL; xBSP Circular No. 332
(Series of 2002)d. Required public offering: At least 10% of
capital stock of UB xSec. 2.2, BSP Circular No. 271 (Series of
2001)
B. Directors and Officers
1.Composition of Board Secs. 15 and 17, GBL; Sec. 7, Foreign
Banks Liberalization Act; Sec. 23, Corporation
Code2.Qualifications
a.Own at least one share Sec. 23, Corporation Codeb.Fit and
proper rule Sec. 16, GBL; Busuego v. Court of Appeals, 304 SCRA 473
(1999); xSubsec. X141.1, MRBc.Other minimum qualifications
xGuidelines for the Establishment of Banks; xSubsec. X141.2,
MRB
3.Disqualifications xGuidelines for the Establishment of Banks;
xSubsec. X141.2, MRBa.Criminal conviction Sec. 27, Corporation
Code; Sec. 17, PDIC Charterb.Public officials Sec. 19, GBL; Sec. 5,
Rural Banks Act; xSec. 10, Appendix 38, MRB (Guidelines For The
Organization Of Cooperative Banks)c.MB member/BSP personnel Secs. 9
and 27, NCBA4.Compensation and Other Benefits Sec. 18, GBL; Sec.
30, Corporation Code5.Meetings Sec. 15, par. 3, GBL; Sec. 25,
Corporation Code; xSEC Memorandum Circular No. 15 dated 20 November
20016.Powers of Directors
a. General Powers xBSP Circular No. 283 (Series of 2001);
xSubsec. X141.3, MRBb. Specific Duties/ Responsibilities xSubsec.
X141.5 and 4141Q5, MRBc. Certification of Directors xBSP Circular
No. 283 (Series of 2001)7.Doctrine of Apparent Authority Prudential
Bank v. Court of Appeals, 223 SCRA 350 (1993); First Philippine
International Bank v. Court of Appeals, 252 SCRA 259 (1996); BPI
Family Savings Bank, Inc. v. First Metro Investment Corporation,
429 SCRA 30 (2004)8.Prohibited Acts Sec. 55.1, GBL
C. Bank Operations
1.Branches Secs. 20, 74 to 75, GBL2.Banking Days and Hours Sec.
21, GBL; xSec. X156, MRB; xCircular No. 500, Series of
20053.Independent Auditor Sec. 58, GBL
4.Financial Statements Secs. 60 to 62, GBL5.Electronic
Transactions Sec. 59, GBL
6.Unsound Banking Practice Sec. 56, GBL; xBSP Circular No. 341
(Series of 2002)
7.Settlement of Disputes Sec. 63, GBL; Home Bankers Savings and
Trust Co. v. Court of Appeals, 318 SCRA 558 (1999); Allied Banking
Corporation v. Court of Appeals, 294 SCRA 803 (1998); Insular
Savings Bank v. Far East Bank and Trust Company, 492 SCRA 145
(2006)D. Other Regulations
1.Risk Based Capital Sec. 34, GBL
2.Major Investments/Ownership of Real Property Secs. 50 to 52,
GBL
3.Declaration of Dividends Sec. 57, GBL
E. Penalty for Violations Sec. 66, GBL; Sec. 34-37, NCBA; Perez
v. Monetary Board, 20 SCRA 592 (1967)VII. BANKS IN DISTRESS;
CESSATION OF BANKING BUSINESSA. Loans to Banks
1.Loans without collateral Sec. 83, NCBA2.Emergency loans Sec.
84, NCBAB. Conservatorship Sec. 67, GBL; Secs. 29 and 30,
NCBA1.Grounds Sec. 29, par. 1, NCBA2.Appointment of Conservator
Sec. 29, par. 1 and Sec. 30, last par. NCBA3.Powers of Conservator
Sec. 29, par. 1, NCBA; First Philippine International Bank v. Court
of Appeals, 252 SCRA 259 (1996)
4.Qualifications and Remuneration Sec. 29, pars. 2 and 3,
NCBA5.Termination of Conservatorship Sec. 29, last par., NCBA
6.Effect: Bank cannot be compelled to pay same bonuses to
employees xProducers Bank of the Philippines v. NLRC, 355 SCRA 489
(2001)
7.Judicial Review Sec. 30, 2nd to last par., NCBA
C. Voluntary Liquidation Sec. 68, GBL
D. Receivership and Involuntary Liquidation Sec. 69, GBL; Sec.
30, NCBA1.Governing Law In Re: Petition for Assistance in the
Liquidation of the Rural Bank of Bokod (Benguet), Inc., PDIC v.
Bureau of Internal Revenue, 511 SCRA 123 (2006)2.Grounds Secs. 30
and 36, 2nd par., NCBA; Sec. 53, last par., GBL; Banco Filipino
Savings and Mortgage Bank v. Monetary Board, 204 SCRA 767 (1991);
Rural Bank of San Miguel, Inc. v. Monetary Board, Bangko Sentral ng
Pilipinas, 516 SCRA 154 (2007)2.Who May Be Receiver Sec. 30, 1st
and 2nd pars., NCBA
3.Duties of Receiver Larrobis, Jr. v. Philippine Veterans Bank,
440 SCRA 34 (2004)
4.Close Now-Hear Later Doctrine Central Bank of the Philippines
v. Court of Appeals, 220 SCRA 536 (1993)
5.Liquidation
a. As opposed to rehabilitation Philippine Veterans Bank
Employees Union-N.U.B.E. v. Hon. Benjamin Vega, 360 SCRA 33
(2001)
b. Actions to take Sec. 30, NCBAc. How assets are distributed
Secs. 31 and 32, NCBAd. All claims filed in liquidation court Ong
v. Court of Appeals, 253 SCRA 105 (1996); Manalo v. Court of
Appeals, 366 SCRA 752 (2001)
e. Disposition of banking franchise Sec. 33, NCBA6.Effects of
Receivership and Liquidation
a. Restriction on capacity to act Villanueva v. Court of
Appeals, 244 SCRA 395 (1995); Abacus Real Estate Development
Center, Inc. v. The Manila Banking Corporation, 455 SCRA 97
(2005)b. Penalties for transaction after Bank becomes insolvent
Sec. 70, GBLc. Effect on garnishment, levy on attachment or
execution Sec. 30, NCBA; Lipana v. Development Bank of Rizal, 154
SCRA 257 (1987)
d. Stoppage of business Provident Savings Bank v. Court of
Appeals, 222 SCRA 125 (1993)
e. Interest on deposits Fidelity Savings and Mortgage Bank v.
Cenzon, 184 SCRA 141 (1990); But See Rural Bank of Sta. Catalina,
Inc. v. Land Bank of the Philippines, 435 SCRA 183 (2004)
7.Judicial Review
a. Availability of remedy Sec. 30, NCBAb. Ground: grave abuse of
discretion Central Bank v. Court of Appeals, 106 SCRA 143 (1981);
Banco Filipino Savings and Mortgage Bank v. Monetary Board, 204
SCRA 767 (1991)
c. Jurisdiction Sec. 4, Rule 65, Rules of Courtd. Who may
question Central Bank of the Philippines v. Court of Appeals, 220
SCRA 537 (1993); xCentral Bank of the Philippines v. Court of
Appeals, 208 SCRA 652 (1992)
e. Actions of the MB final and executory; Injunction Central
Bank of the Philippines v. Dela Cruz, 191 SCRA 346 (1990); Sec. 22,
PDIC Charterf. Effect of Filing Petition for Review Banco Filipino
Savings and Mortgage Bank v. Ybaez, SCRA (2004)
g. Liability of the MB and PDIC Miranda v. Philippine Deposit
Insurance Corporation, 501 SCRA 288 (2006)
E. PDIC Financial Assistance Sec. 12(c), PDIC Charter The
Outline presents the manner by which Banking Law I will be taken up
in class. The x's and those footnoted in the Outline represent
cases or topics which need no extended discussions, either because
the essence of the rulings are already summarized in the Outline or
they contain similar rulings or doctrines as other cases to be
discussed.
Republic Act No. 8791 (General Banking Law of 2000), which
repealed Republic Act No. 337 (General Banking Act)
Manual for Regulation of Banks
Republic Act No. 7653 (New Central Bank Act), which repealed
Republic Act No. 265 (Central Bank Act)
Presidential Decree No. 129, as amended
Republic Act No. 59080, as amended by Republic Act No. 8556
Republic Act No. 2629
Republic Act No. 8367
Republic Act No. 6938
Presidential Decree No. 612, as amended
Prudential Bank v. Lim, 474 SCRA 485 (2005)
Bangko Sentral ng Pilipinas
Solidbank Corporation/Metropolitan Bank and Trust Company v.
Tan, 520 SCRA123 (2007)
Simex International (Manila) Incorporated v. Court of Appeals,
183 SCRA 360 (1990); Bank of the Philippine Islands v. Court of
Appeals, 326 SCRA 641 (2000); Philippine Commercial International
Bank v. Court of Appeals, 350 SCRA 446 (2001); Firestone Tire &
Rubber Company of the Philippines v. Court of Appeals, 353 SCRA 601
(2001); Westmont Bank v. Ong, 375 SCRA 212 (2002); Traders Royal
Bank v. Radio Philippines Network, Inc., 390 SCRA 608 (2002);
Consolidated Bank and Trust Corporation v. Court of Appeals, 410
SCRA 562 (2003)
Metropolitan Bank and Trust Company v. Cabilzo, 510 SCRA 259
(2006); But See Go v. Intermediate Appellate Court, 197 SCRA 22
(1991)
Development Bank of the Philippines v. Court of Appeals, 331
SCRA 267 (2000); Canlas v. Court of Appeals, 326 SCRA 425 (2000);
Premiere Development Bank v. Court of Appeals, 453 SCRA 630 (2005);
Private Development Corporation of the Philippines v. Court of
Appeals, 475 SCRA 591 (2005); Citibank, N.A. v. Cabamongan, 488
SCRA 517 (2006); Metropolitan Bank and Trust Company, Inc. v. SLGT
Holdings, Inc., 536 SCRA 517 (2007); Omengan v. Philippine National
Bank, 512 SCRA 305 (2007)
See Also United Coconut Planters Bank v. Basco, 437 SCRA 325
(2004)
Monetary Board
Rules and Regulations to Implement the Provisions of
Presidential Decree No. 129
Republic Act No. 7906
Republic Act No. 7353
Republic Act No. 6848 (Charter of Al Amanah Islamic Development
Bank of the Philippines)
Republic Act No. 3844
Executive Order No. 81, Series of 1986
Republic Act No. 3518
Republic Act No. 7169
Executive Order No. 80 Series of 1986
Republic Act No. 7221
Philippine Stock Exchange
Republic Act No. 7042
Presidential Decree No. 1034, as amended
San Carlos Milling Co., Ltd. v. Bank of the Philippine Islands,
59 Phil. 59 (1933); Hilado v. De la Costa, 83 Phil. 471 (1949);
People v. Ong, 204 SCRA 942 (1991); Moran v. Court of Appeals, 230
SCRA 799 (1994); Consolidated Bank and Trust Corporation v. Court
of Appeals, 410 SCRA 562 (2003)
Serrano v. Central Bank, 96 SCRA 96 (1980); People v. Puig, 563
SCRA 564 (2008).
Simex International (Manila), Inc. v. Court of Appeals, 183 SCRA
360 (1990); Go v. Intermediate Appellate Court, 197 SCRA 22 (1991);
Bank of the Philippine Islands v. Intermediate Appellate Court, 206
SCRA 408 (1992); Philippine Bank of Commerce v. Court of Appeals,
269 SCRA 695 (1997); Bank of the Philippine Islands v. Court of
Appeals, 326 SCRA 641 (2000); Firestone Tire & Rubber Company
of the Philippines v. Court of Appeals, 353 SCRA 601 (2001)
Republic Act No. 6426, as amended (Foreign Currency Deposit
Act)
Republic Act No. 9160, as amended by Republic Act No. 9194
(Anti-Money Laundering Act of 2001)
Republic Act No. 1405, as amended
Directors, Officers, Stockholders, Related Interests
Republic Act No. 3019, as amended
Republic Act No. 6770
Republic Act No. 7080, as amended
Philippine Deposit Insurance Corporation
Republic Act No. 3591, as amended by Republic Act No. 7400 and
Republic Act No. 9576
Republic Act No. 9732
Act No. 3936, as amended by Presidential Decree No. 679
Intengan v. Court of Appeals, 377 SCRA 63 (2002); Estrada v.
Desierto, 445 SCRA 655 (2004)
Philippine Deposit Insurance Corporation
Republic Act No. 3591, as amended by Republic Act No. 7400 and
Republic Act No. 9576
Philippine Deposit Insurance Corporation
Republic Act No. 3591, as amended by Republic Act No. 7400 and
Republic Act No. 9576
As further amended by Secs. 3 and 4, Republic Act No. 9576
(a) Securities dealers, brokers, salesmen, investment houses,
and other entities managing securities or rendering services as
investment agents, advisor, or consultants; (b) Mutual funds,
closed-end investment companies, common trust funds, pre-need
companies, and other similar entities; (c) Foreign exchange
corporations, money changers, money payment, remittance, and
transfer companies, and other similar entities; (d) Other entities
administering or dealing in currency, commodities or financial
derivatives based thereon, valuable objects, cash substitutes and
other similar monetary instruments or property
Anti-Money Laundering Council
SC Circular A.M. No. 05-11-04-SC
Republic Act No. 3765
Act No. 2655 as amended
Government of the Philippine Islands v. Judge of First Instance
of Iloilo, 34 Phil. 157 (1916); Tolentino v. Carlos, 66 Phil. 140
(1938); Gutierrez v. Camus, 96 Phil. 144 (1954); Araneta v. Hon.
Gatmaitan., 101 Phil. 323 (1957)
Act No. 1508
Abad v. Court of Appeals, 181 SCRA 191 (1990); Reliance
Commodities, Inc. v. Daewoo Industrial Co., Ltd., 228 SCRA 545
(1993);Metropolitan Waterworks and Sewerage System v. Daway, 432
SCRA 559 (2004);
Philippine National Bank v. Pineda, 197 SCRA 1 (1991); People v.
Nitafan, 207 SCRA 726 (1991); Allied Banking Corporation v. Ordoez,
192 SCRA 246 (1990)
Limketkai Sons Milling, Inc. v. Court of Appeals, 1 December
1995; Rural Bank of Milaor (Camarines Sur) v. Ocfemia, 325 SCRA 99
(2000); Philippine Commercial and International Bank v. Court of
Appeals, 350 SCRA 446 (2001)
Rural Bank of Buhi v. Court of Appeals, 162 SCRA 288 (1988);
Rural Bank of Lucena, Inc. v. Arca, 15 SCRA 66 (1965); Banco
Filipino Savings and Mortgage Bank v. Monetary Board, 204 SCRA 767
(1991); Central Bank of the Philippines v. Court of Appeals, 220
SCRA 536 (1993)
Integrated Realty Corporation v. Philippine National Bank, 174
SCRA 295 (1989); The Overseas Bank of Manila v. Court of Appeals,
105 SCRA 49 (1981) and 113 SCRA 778 (1982)