GENERAL BANKING LAW OF 2000 (Republic Act No.

8791)
Course Outline by Atty. W. Francis G. Bor a

I.

TITLE AND CLASSIFICATION OF BANKS A. B. !ection 1. Title " #$e General Ban%in& 'a( o) *+++ !ection *. Declaration of Policy " 1) ,ital role o) ban%s in pro-i.in& an en-iron/ent con.uci-e to t$e sustaine. .e-elop/ent o) t$e national econo/y0 *) Fi.uciary nature o) ban%s (base. on strict con)i.ence) t$at re1uires $i&$ stan.ar.s o) inte&rity an. per)or/ance)0 2) 3e&ree o) .ili&ence re1uire. o) ban%s Cases: PCIBank vs. CA (24+ !CRA 556 7*++18) BPI vs. CA (2*6 !CRA 651 7*+++8) Phil. Bank of Commerce vs. CA (*69 !CRA 694 719978) Simex Intl vs. CA (182 !CRA 5+8 7182 !CRA 5+88) Devt. Bank vs. CA (221 !CRA *67) 7*+++8) Canlas vs. CA (2*6 !CRA 514 7*+++8) Ibaan Rural Bank vs. CA (2*1 !CRA 88 7*+++8) Reyes vs. CA (GR No. 11859*9 Au&ust 149 *++1) C. !ection 2. Definition and Classification of Banks 1) :ni-ersal Ban%s *) Co//ercial Ban%s 2) #$ri)t Ban%s (;#$ri)t Ban%s Act< " RA No. 79+6) !a-in&s an. /ort&a&e ban%s !toc% sa-in&s an. loan associations =ri-ate .e-elop/ent ban%s

5) Rural Ban%s (Rural Ban%s Act " RA No. 7242) 4) Cooperati-e Ban%s (Cooperati-e Co.e " RA No.6928) 6) >sla/ic Ban%s (;C$arter o) Al A/ana$ >sla/ic >n-est/ent Ban% o) t$e =$ils. " RA No. 6858) II. AUTHORITY OF THE BANGKO SENTRAL A. !ection 5. Su!ervisory Po"ers " 1) *) 2) 5) >ssuance o) rules o) con.uct or t$e establis$/ent o) stan.ar.s o) operation )or ban%s0 Con.uct o) e?a/ination to .eter/ine co/pliance (it$ la(s an. re&ulations0 O-erseein& to ascertain t$at la(s an. re&ulations are co/plie. (it$0 Re&ular in-esti&ation (not o)tener t$an once a year) to c$ec% ($et$er an institution is con.uctin& business on a sa)e or

4) 6) B.

soun. basis0 >n1uirin& into t$e sol-ency an. li1ui.ity o) t$e institution0 an. @n)orcin& pro/pt correcti-e action.

!ection 4. Policy Direction# Ratios$ Ceilin%s and &imitations #$e B!= s$all pro-i.e policy .irection in t$e areas o)A Boney0 Ban%in&0 an. Cre.it

C. 3. III.

!ection 6. Authority to 'n%a%e in Bankin% and (uasi)Bankin% *unctions !ection 7. 'xamination by the Ban%ko Sentral

ORGANIZATION, MANAGEMENT AND ADMINISTRATION OF BANKS, QUASI-BANKS AND TRUST ENTITIES A. !ection 8. +r%ani,ation " =recon.itions )or t$e or&aniCation o) a ban% or 1uasiDban%A 1) @ntity /ust be a stoc% corporation0 *) >ts )un.s are obtaine. )ro/ t$e public (*+ or /ore persons)0 an. 2) Bini/u/ capital re1uire/ents prescribe. by t$e Bonetary Boar. satis)ie.. B. C. 3. !ection 9. Issuance of Stocks !ection 1+. Treasury Stocks !ection 11. *orei%n Stockholdin%sForei&n in.i-i.uals an. nonDban% corporations /ay o(n or control up to )orty percent (5+E) o) t$e -otin& stoc% o) a .o/estic ban%. @. F. G. ;Gran.)at$er Rule< =lease note liberaliCation o) entry o) )orei&n ban%s

!ection 1*. Stockholdin%s of *amily .rou!s or Related Interests !ection 12. Cor!orate Stockholdin%s !ection 15. Certificate of Authority to Re%ister #$e !@C s$all not re&ister t$e articles o) incorporation (AO>) o) any ban% unless acco/panie. by a certi)icate o) aut$ority (COA) issue. by t$e Bonetary Boar. a)ter co/plyin& (it$ certain re1uire/ents. #$e !@C s$all not re&ister t$e byDla(s o) any ban% unless acco/panie. by a certi)icate o) aut$ority (COA) )ro/ t$e Ban&%o !entral.

F.

!ection 14. Board of Directors Not less t$an )i-e (4) but not /ore t$an )i)teen (14) /e/bers9 t(o (*) o) ($o/ /ust be ;in.epen.ent .irectors.< 2

=lease note .e)inition o) ;in.epen.ent .irectors< (CB Circular)

>.

!ection 16. *it and Pro!er Rule CasesA Busue%o vs. CA (*+5 !CRA 572 719998) PCIBank vs. CA (24+ !CRA 556 7*++18) - liability o) ban%s )or torts o) o))icers

G.

!ection 17. Directors of /er%ed or Consolidated Banks DD not to e?cee. t(entyDone (*1)

H. '.

!ection 18. Com!ensation and +ther Benefits of Directors !ection 19. Prohibition on Public +fficials No appointi-e or electi-e public o))icial9 ($et$er )ullDti/e or partD ti/e s$all at t$e sa/e ti/e ser-e as o))icer o) any pri-ate ban%. EXCEPTIONA !er-ice to t$e ban% by t$e public o))icial is inci.ent to t$e )inancial assistance pro-i.e. by t$e &o-ern/ent or a GOCC to t$e ban% or unless pro-i.e. by e?istin& la(s.

B. N.

!ection *+. Bank Branches !ection *1. Bankin% Days and 0ours All (or%in& .ays (/eanin& Bon.ays to Fri.ays e?cept i) suc$ .ays are $oli.ays) )or at least si? (6) $ours a .ay Ban%s /ay open )or business on !atur.ays9 !un.ays or $oli.ays )or at least t$ree (2) $ours a .ay but t$ey /ust report to t$e B!= t$e sa/e.

O.

!ection **. Strikes and &ockouts Ban%in& in.ustry is $ereby .eclare. as in.ispensable to t$e national interest. Not(it$stan.in& t$e pro-isions o) any la( to t$e contrary9 any stri%e or loc%out in-ol-in& ban%s9 i) unsettle. a)ter se-en (7) calen.ar .ays s$all be reporte. by t$e B!= to t$e !ecretary o) 'abor ($o /ay assu/e uris.iction o-er t$e .ispute or .eci.e it or certi)y t$e sa/e to t$e N'RC )or co/pulsory arbitration. HOWE ERA #$e =resi.ent o) t$e =$ilippines /ay at any ti/e inter-ene an. assu/e uris.iction o-er suc$ labor .ispute in or.er to settle or ter/inate t$e sa/e. NOTEA 'abor Co.e =ro-ision (Article *62 7&8) W$en9 in $is opinion9 t$ere e?ists a labor .ispute causin& or li%ely to cause a stri%e or loc%out in an in.ustry in.ispensable to t$e national interest9 t$e !ecretary o) 'abor an. @/ploy/ent /ay assu/e uris.iction o-er t$e .ispute an. .eci.e it or certi)y t$e sa/e to t$e Co//ission )or co/pulsory arbitration. !uc$ assu/ption or certi)ication s$all $a-e t$e e))ect o) auto/atically 3

en oinin& t$e inten.e. or i/pen.in& stri%e or loc%out as speci)ie. in t$e assu/ption or certi)ication or.er. >) one $as alrea.y ta%en place at t$e ti/e o) assu/ption or certi)ication9 all stri%in& or loc%e. out e/ployees s$all i//e.iately return to (or% an. t$e e/ployer s$all i//e.iately resu/e operations an. rea./it all (or%ers un.er t$e sa/e ter/s an. con.itions pre-ailin& be)ore t$e stri%e or loc%out. #$e !ecretary o) 'abor an. @/ploy/ent or t$e Co//ission /ay see% t$e assistance o) la( en)orce/ent a&encies to ensure t$e co/pliance (it$ t$is pro-ision as (ell as (it$ suc$ or.ers as $e /ay issue to en)orce t$e sa/e. I . DEPOSITS, LOANS AND OTHER OPERATIONS OPERATIONS OF UNI ERSAL BANKS ! COMMERCIAL BANKS A. !ections *2D2*

PRO ISIONS APPLICABLE TO ALL BANKS, QUASI-BANKS AND TRUST ENTITIES B. !ection 22. Acce!tance of Demand De!osits " A ban% ot$er t$an a uni-ersal or co//ercial ban% cannot accept or create .e/an. .eposits e?cept upon prior appro-al o)9 an. sub ect to suc$ con.itions an. rules as /ay be prescribe. by t$e Bonetary Boar.. 1. #ypes o) 3eposits (a) T"#$ D$%&'"( " >nterest rate stipulate. .epen.in& on t$e nu/ber o) .ays ($ic$ /ay be 2+9 6+9 9+9 18+9 26+ or 45+ .ays. 3urin& t$is perio.9 t$e /oney .eposite. cannot be (it$.ra(n (&enerally). #$e ban%s use t$is /oney to len. to ot$ers. #$at is ($y in suc$ accounts9 t$e .epositors are pai. $i&$ interest rates as co/pensation )or t$e use o) t$e /oney by t$e ban%. S)*"+,' D$%&'"( " >nterest at9 say9 8E. :n.er t$e )ine prints9 i) you .eposit to.ay9 you cannot (it$.ra( t$e a/ount not until 6+ .ays later. #$e ban% can len. out suc$ )un.s0 t$at is ($y it pays interest on suc$ .eposits. D$#)+- D$%&'"(' &. C/..$+( A00&/+(' " No interest is pai. by t$e ban% because t$e .epositor can ta%e out $is )un.s anyti/e. >t is calle. .e/an. .eposit because t$e .epositor can (it$.ra( t$e /oney $e .eposite. on t$e -ery sa/e .ay ($en $e .eposite. it.

(b)

(c)

*.

Relations$ip Bet(een Ban% an. 3epositor DD t$e relations$ip bet(een t$e ban% an. t$e .epositor is t$at o) a .ebtor (ban%) an. cre.itor (.epositor)A !>B='@ 'OAN CasesA /oran vs. CA (*2+ !CRA 799 719958) Serrano vs. Central Bank (96 !CRA 96 7198+8) Peo!le vs. +n% (*+5 !CRA 95* 719918)

2.

Obli&ation o) Ban%s to 3epositors CasesA /etroBank vs. CA (*27 !CRA 7*6 719958) 4

PCIBank vs. CA (*69 !CRA 694 719978) 5. Ri&$t o) !etDO)) on 3eposit )or Outstan.in& 'oan CasesA BPI vs. CA (*2* !CRA 2+* 719958)

C. 3.

!ection 25. Risk)Based Ca!ital !ection 24. &imit on &oans$ Credit Accommodations and .uarantees 1. Concept o) !in&le Borro(erIs 'i/it (!B') " *+E o) net (ort$ o) t$e ban% PRO IDEDA Bay be increase. by an a..itional 1+E i) t$e a..itional liabilities o) any borro(er are a.e1uately secure. by trust receipts9 s$ippin& .ocu/ents9 (are$ouse receipts or ot$er si/ilar .ocu/ents trans)errin& or securin& title co-erin& rea.ily /ar%etable9 nonDperis$able &oo.s ($ic$ /ust be )ully co-ere. by insurance. *. =lease c$ec% B!= Banual o) Re&ulations For !B' purposes9 loans9 ot$er cre.it acco//o.ations an. &uarantees s$all e?clu.e t$e )ollo(in&A !ecure. by obli&ations o) t$e B!= or o) t$e =$ilippine Go-ern/ent0 Fully &uarantee. by t$e &o-ern/ent as to t$e pay/ent o) principal an. interest0 Co-ere. by assi&n/ent o) .eposits /aintaine. in t$e len.in& ban% an. $el. in t$e =$ilippines0 :n.er letters o) cre.it to t$e e?tent co-ere. by /ar&in .eposits0 an. #$ose ($ic$ t$e Bonetary Boar. /ay9 )ro/ ti/e to ti/e9 speci)y as nonDris% ite/s (!ec. 24.49 GB')

@.

!ection 26. Restriction on Bank 'x!osure to Directors$ +fficers$ Stockholders and Their Related Interests (3O!R>). #o be .iscusse. separately

F. 'state

!ection 27. &oans and +ther Credit Accommodations A%ainst Real !$all not e?cee. 74E o) t$e appraise. -alue o) t$e respecti-e real estate security9 plus 6+E o) t$e appraise. -alue o) t$e insure. i/pro-e/ents.

G.

!ection 28. &oans and +ther Credit Accommodations on Security of Chattels and Intan%ible Pro!erties !$all not e?cee. 74E o) t$e appraise. -alue o) t$e security

F.

!ection 29. .rant Accommodations

and

Pur!ose

of

&oans

and

+ther

Credit

#$e purpose o) t$e loanJcre.it acco//o.ation s$all be state. in t$e application an. in t$e contract bet(een t$e ban% an. t$e borro(er. >) procee.s applie. to ot$er purposes (it$out ban%Is consent9 ban% s$all $a-e t$e ri&$t to ter/inate t$e loanJcre.it acco//o.ation an. .e/an. i//e.iate repay/ent o) t$e obli&ation.

>.

!ection 5+. Re1uirements for .rant of &oans or +ther Credit AccommodationsK Ban% /ay .e/an. )ro/ clientA 1) state/ent o) assets an. liabilities0 *) inco/e state/ent an. e?pen.itures0 2) )inancial state/ents sub/itte. to t$e B>R )or ta?ation purposes. Note HLC =rinciple an. AB'A

G. H.

!ection 51. 2nsecured &oans or +ther Credit Accommodations !ection 5*. +ther Security Re1uirements for Bank Credits CasesA *++1) Security Bank vs. Cuenca (251 !CRA 781 7*+++8) " G!! =ractice State Investment 0ouse vs. CA (G.R. No. 11*49+9 Guly 1*9 D:nconscionable =enalty C$ar&es P3B vs. CA (*28 !CRA *+ 719958) " @scalation Clause Almeda vs. CA (*46 !CRA *9* 719968) P3B vs CA (*49 !CRA 175 719968) *lorendo vs. CA (*64 !CRA 678 719968) Security Bank vs. RTC (*62 !CRA 582 719968)

'. B. N.

!ection 52. Authority to Prescribe Terms and Conditions of &oans and +ther Credit Accommodations !ection 55. Amorti,ation on &oans and +ther Credit Accommodations !ection 54. Pre!ayment of &oans and +ther Credit Accommodations " A borro(er /ay preDter/inate anyti/e t$e unpai. balance o) any loanJcre.it acco//o.ation sub ect to ter/s an. con.itions a&ree. upon (it$ t$e ban%.

O. =.

!ection 56. Develo!ment Assistance Incentives !ecton 57. *oreclosure of Real 'state /ort%a%e >n t$e e-ent o) )oreclosure9 ($et$er u.icially or e?traD u.icially9 o) any /ort&a&e on real estate ($ic$ is security )or any loan or ot$er cre.it acco//o.ation &rante.9 t$e /ort&a&or or .ebtor ($ose real property $as been sol. )or t$e )ull or partial pay/ent o) $is obli&ation s$all $a-e t$e ri&$t (it$in &+$ 123 4$). ()or in.i-i.ual /ort&a&or) a)ter t$e sale o) t$e real estate9 to re.ee/ t$e property by payin& t$e a/ount .ue un.er t$e /ort&a&e .ee.9 (it$ interest t$ereon at t$e rate speci)ie. in t$e /ort&a&e9 an. all t$e costs an. e?penses incurre. by t$e ban% or institution )ro/ t$e sale an. custo.y o) sai. property less t$e inco/e .eri-e. t$ere)ro/. HOWE ERA #$e purc$aser at t$e auction sale concerne. ($et$er in a u.icial or e?traD u.icial )oreclosure s$all $a-e t$e ri&$t to enter upon an. ta%e 6

possession o) suc$ property i//e.iately a)ter t$e .ate o) t$e con)ir/ation o) t$e auction sale an. a./inister t$e sa/e in accor.ance (it$ la(. Any petition in court to en oin or restrain t$e con.uct o) )oreclosure procee.in&s institute. pursuant to t$is pro-ision s$all be &i-en .ue course only upon t$e )ilin& by t$e petitioner o) a bond in an a/ount )i?e. by t$e court con.itione. t$at $e (ill pay all t$e .a/a&es ($ic$ t$e ban% /ay su))er by t$e en oinin& or t$e restraint o) t$e )oreclosure procee.in&. SPECIAL RULE ON 5URIDICAL MORTGAGORA Not(it$stan.in& Act 21249 uri.ical persons ($ose property is bein& sol. pursuant to an e?tra u.icial )oreclosure9 s$all $a-e t$e ri&$t to re.ee/ t$e property in accor.ance (it$ t$is pro-ision until9 but not a)ter9 t$e re&istration o) t$e certi)icate o) )oreclosure sale (it$ t$e applicable Re&ister o) 3ee.s ($ic$ in no case s$all be /ore t$an t$ree (2) /ont$s a)ter )oreclosure9 ($ic$e-er is earlier. O(ners o) property t$at $as been sol. in a )oreclosure sale prior to t$e e))ecti-ity o) t$is Act s$all retain t$eir re.e/ption ri&$ts until t$eir e?piration. prior to re&istration o) CO! or t$ree (2) /ont$s )ro/ auction sale9 ($ic$e-er co/es )irst CaseA 2nion Bank vs. CA (G.R. No. 125+689 Gune *49 *++1) M. !ection 58. Rene(al or @?tension o) 'oans an. Ot$er Cre.it Acco//o.ations !ection 59. Provisions for &osses and 4rite)+ffs All .ebts .ue to any ban% on ($ic$ interest is past .ue an. unpai. )or suc$ perio. as /ay be .eter/ine. by t$e Bonetary Boar.9 unless t$e sa/e are (ellDsecure. an. in t$e process o) collection s$all be consi.ere. ba. .ebts (it$in t$e /eanin& o) t$is !ection. #$e Bonetary Boar. /ay )i?9 by re&ulation or by or.er in a speci)ic case9 t$e a/ount o) reser-es )or ba. .ebts or .oubt)ul accounts or ot$er contin&encies. Writin& o)) o) loans9 ot$er cre.it acco//o.ations9 a.-ances an. ot$er assets s$all be sub ect to re&ulations issue. by t$e Bonetary Boar.. !. #. :. Claims A ban% /ay ac1uire9 $ol. or con-ey real property un.er t$e )ollo(in& circu/stancesA 1) !uc$ as s$all be /ort&a&e. to it in &oo. )ait$ by (ay o) security 7 =lease note !ection N2+6.4 o) t$e B!= Banual o) Re&ulations

R.

!ection 4+. /a5or Investments !ection 41. Ceilin% on Investments in Certain Assets !ection 4*. Ac1uisition of Real 'state by 4ay of Satisfaction of

)or .ebts0 *) !uc$ as s$all be con-eye. to it in satis)action o) .ebts pre-iously contracte. in t$e course o) its .ealin&s0 or 2) !uc$ as it s$all purc$ase at sales un.er u.&/ents9 .ecrees9 /ort&a&es9 or trust .ee.s $el. by it an. suc$ as it s$all purc$ase to secure .ebts .ue it. ,. W. N. !ection 42. +ther bankin% services !ection 45. Prohibition to Act as Insurer !ection 44. Prohibited Transactions 1) =ro$ibite. #ransactions by Ban% 3irectors an. O))icers (!ec. 44.19 GB')A No .irector9 o))icer9 e/ployee9 or a&ent o) any ban% s$allA

Ba%e )alse entries in any ban% report or state/ent or participate in any )rau.ulent transaction9 t$ereby a))ectin& t$e )inancial interest o)9 or causin& .a/a&e to9 t$e ban% or any person0 Wit$out or.er o) a court o) co/petent uris.iction9 .isclose to any unaut$oriCe. person any in)or/ation relati-e to t$e )un.s or properties in t$e custo.y o) t$e ban% belon&in& to pri-ate in.i-i.uals9 corporations9 or any ot$er entity. PRO IDEDA Wit$ respect to ban% .eposits9 t$e pro-isions o) e?istin& la(s s$all pre-ail

Accept &i)ts9 )ees or co//issions or any ot$er )or/ o) re/uneration in connection (it$ t$e appro-al o) a loan or ot$er cre.it acco//o.ation )ro/ sai. ban%0 O-er-alue or ai. in o-er-aluin& any security )or t$e purpose o) in)luencin& in any (ay t$e actions o) t$e ban% or any ban%0 or Outsource in$erent ban%in& )unctions. CB Circular *68 (3ece/ber 49 *+++)

*)

:p$ol.in& !ecrecy o) Ban% 3eposit Act (!ec. 44.59 GB') Consistent (it$ t$e pro-isions o) Republic Act No. 15+49 ot$er(ise %no(n as t$e Ban% !ecrecy 'a(9 no ban% s$all e/ploy casual or nonDre&ular personnel or too len&t$y probationary personnel in t$e con.uct o) its business in-ol-in& ban% .eposits.

L. O. AA. BB. CC. 33.

!ection 46. Conductin% Business in an 2nsafe or 2nsound /anner !ection 47. Prohibition on Dividend Declaration !ection 48. Inde!endent Auditor !ection 49. Authority to Re%ulate 'lectronic Transactions !ection 6+. *inancial Statements !ection 61. Publication of *inancial Statements 8

@@.

!ection 6*. Publication of Ca!ital Stock Bust state t$e a/ount o) its capital actually pai.Dup For branc$es o) )orei&n ban%s .oin& business in t$e =$ils.9 /ust state also t$e a/ount o) capital assi&ne. to suc$ branc$ by t$e $ea. o))ice

FF. GG. FF. >>.

!ection 62. Settlement of Dis!utes !ection 65. 2nauthori,ed Advertisement or Business Re!resentation !ection 64. Service *ees !ection 66. Penalty for 6iolation of this Act !$all be sub ect to !ections 259 249 26 an. 27 o) t$e Ne( Central Ban% Act

PLACEMENT UNDER CONSER ATORSHIP A. !ection 67. Conservatorshi! Go-erne. by !ection *9 an. t$e last t(o para&rap$s o) !ection 2+ o) t$e Ne( Central Ban% Act

I.

CESSATION OF BANKING BUSINESS A. !ection 68. 6oluntary &i1uidation >n case o) -oluntary li1ui.ation9 (ritten notice o) suc$ li1ui.ation s$all be sent to t$e Bonetary Boar. ($o /ay inter-ene an. ta%e t$e necessary steps to protect t$e interests o) cre.itors

B.

!ection 69. Receivershi! and Involuntary &i1uidation Go-erne. by !ections 2+9 219 2* an. 22 o) t$e Ne( Central Ban% Act =etitionerJ=lainti)) /ust )ile (it$ t$e court in ($ic$ t$e action is pen.in& a BON3 e?ecute. in )a-or o) t$e B!= in an a/ount to be )i?e. by t$e court.

C.

!ection 7+. Penalty for Transactions After a Bank Becomes Insolvent =unis$able acts o) any .irectorJo))icer o) any ban% .eclare. insol-ent or place. un.er recei-ers$ipA (1) (*) (2) (5) (4) (6) Re)uses to turn o-er t$e ban%Is recor.s an. assets to t$e .esi&nate. recei-ers0 #a/pers (it$ ban% recor.s0 Appropriates )or $i/sel) or )or anot$er party or .estroys or causes t$e /isappropriation an. .estruction o) t$e ban%Is assets0 Recei-es or per/its or causes to be recei-e. in sai. ban% any .eposit9 collection o) loans an.Jor recei-ables0 =ays out or per/its or causes to be pai. out any )un.s o) sai. ban%0 #rans)ers or per/its or causes to be trans)erre. any 9

securities or property o) sai. ban%. II. =enal pro-isions o) t$e Ne( Central Ban% Act s$all apply.

LAWS GO ERNING OTHER TYPES OF BANKS A. !ection 71. +ther Bankin% &a"s 1) #$ri)t Ban%s " #$ri)t Ban%s Act *) Rural Ban%s " Rural Ban%s Act 2) Cooperati-e Ban%s " Cooperati-e Co.e But GB' applies (suppletorily) inso)ar as not inconsistent (it$ t$ese special la(s

III.

FOREIGN BANKS A. !ection 7*. Transactin% Business in the Phili!!ines @ntry o) )orei&n ban%s in t$e =$ils. is &o-erne. by t$e Forei&n Ban%s 'iberaliCation Act but GB' still applies in a suppletory /anner.

B.

!ection 72. Ac1uisition of 6otin% Stock in a Domestic Bank Bonetary Boar. s$all a.opt /easures to ensure t$at at all ti/es t$e control o) se-enty percent (7+E) o) t$e resources or assets o) t$e entire ban%in& syste/ is $el. by ban%s /a orityDo(ne. by Filipinos Any ri&$t9 pri-ile&e or incenti-e &rante. to a )orei&n ban% un.er t$is !ection s$all be e1ually en oye. by ban%s or&aniCe. un.er =$il. la(s

C. 3.

!ection 75. &ocal Branches of *orei%n Banks !ection 74. 0ead +ffice .uarantee #$e $ea. o))ice ()orei&n ban%) s$all )ully &uarantee t$e pay/ent o) all liabilities o) its =$ilippine branc$es

@.

!ection 76. Summons and &e%al Process !u//ons an. le&al process s$all be ser-e. upon t$e =$ilippine a&ent or $ea. o) any )orei&n ban% .esi&nate. to accept suc$ ser-ice.

F. G.

!ection 77. &a"s A!!licable !ection 78. Revocation of &icense of a *orei%n Bank Groun.s )or re-ocation o) licenseA (1) (*) (2) >nsol-ency0 >//inent .an&er o) insol-ency0 an. Continuance in business (ill in-ol-e probable loss to t$ose transactin& business (it$ t$e )orei&n ban%

IX.

TRUST OPERATIONS (!ections 79D92) S$%).)("&+ &6 T./'( B/'"+$'' 6.&# G$+$.)7 B/'"+$''

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#$e trust business an. all )un.s9 properties or securities recei-e. by any trust entity as e?ecutor9 a./inistrator or &uar.ian9 trustee9 recei-er or .epositary s$all be %ept separate an. .istinct )ro/ t$e &eneral business inclu.in& all ot$er )un.s9 properties an. assets o) suc$ trust entity. #$e account o) all suc$ )un.s9 properties or securities s$all li%e(ise be %ept separate an. .istinct )ro/ t$e accounts o) t$e &eneral business o) t$e trust entity (!ection 879 GB').

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