VIII.

Banking Laws

A. The New Central Bank Act ( R.A. No. 7653)

1. State Policies

- Sec. 1, New Central Bank Act (NCBA)

2. Creation of the Bangko Sentral ng Pilipinas (BSP)

- Sec. 2, NCBA
- Corporate powers of BSP – Sec. 5, NCBA

3. Responsibility and Primary Objective

- Sec. 3, NCBA
- Functions as Banker and Financial Advisor of the Government – Secs.
110-115, Sec. 123, NCBA
- No Injunction Rule on Supervisory Powers of BSP – Sec 25, NCBA

4. Monetary Board - Powers and Functions

- Secs. 6-16, NCBA

5. How BSP Handles Banks in Distress

5.1. No Injunction Rule on Conservatorship, Receivership and

Liquidation - Sec. 30, NCBA

a. Conservatorship

- Sec. 29, NCBA

 b. Closure

- “Close Now-Hear Later” Scheme – Vivas v. Monetary Board of BSP

and PDIC, GR No. 191424, Aug. 7, 2013

c. Receivership

- Sec. 30, NCBA

d. Liquidation

- Sec. 30, NCBA

5.2 Effects of Receivership/Liquidation

- Lipana v. Development Bank of Rizal. GR No. 73884, Sept. 24, 1987

- Manalo v. CA, GR No. 141297, Oct. 8, 2001

5.3. Judicial Review

- Sec. 30, NCBA

6. How the BSP Handles Exchange Crisis

a. Legal Tender Power

- Sec. 52, NCBA

- Sec. 50, NCBA - “Exclusive Issue Power”

b. Rate of Exchange

- Sec. 74, NCBA

B. Secrecy of Bank Deposits (R.A. No. 1405, as amended)

1. Purpose

- Sec. 1, RA No. 1405

2. Prohibited Acts

- Secs. 2 and 3, RA No. 1405

3. Deposits Covered

- Sec. 2, RA No. 1405

4. Exceptions

4.1 Sec. 2, RA No. 1405

- Dona Adela Export International, Inc. v. Trade and Industry

Investment Dev. Corp. and BPI, GR No. 201931, Feb. 11, 2015

- Ejercito v. Sandiganbayan, GR Nos. 157294-95, Nov. 30, 2006

4.2 Other Exceptions

1. Anti-Graft and Corrupt Practices Act

- Bangko Filipino v. Purisima, No. L-56429, May 28, 1988

2. National Internal Revenue Code (NIRC)

- Sec. 6 [f], NIRC

 3. Anti-Money Laundering Act (AMLA)

- Sec. 2, AMLA

4. Unclaimed Balances Act (UBA)

- Sec. 2, UBA

5. Foreign Currency Deposits Act (FCDA)

6. New Central Bank Act (NCBA)

- Sec. 25, NCBA

7. In-Camera Inspection by Ombudsman

- Marquez v. Desierto, GR No. 135882, June 27, 2001

8. Human Security Act (R.A. No. 9372)

- Sec. 27, R.A. No. 9372

5. Garnishment of Deposits, including Foreign Deposits

- Sec. 8, R.A. No. 1405

- Salvacion v. Central bank, GR No. 94723, Aug. 21, 1997

C. General Banking Law (GBL) of 2000 (R.A. No. 8791)

1. Definition and Classification of Banks

- Sec. 3, GBL

- Universal Bank - Secs. 23-28, GBL

- Commercial Bank - Secs. 29-32, GBL

- Foreign Equity Rule – Sec. 11, GBL

2. Distinction of Banks from Quasi-Banks and Trust Entities

- Quasi-Bank – Secs. 4.6, 95, GBL

- Trust Entity – Secs. 79-80, 83, GBL

3. Bank Powers and Liabilities

a. Corporate Powers

- Secs. 23, 29, GBL

b. Banking and Incidental Powers

4. Diligence Required of Banks

Relevant Jurisprudence:

- PNB v. Santos; Aguilar v. Santos, GR Nos. 208293 and 208295, Dec. 10,
2014
- Metrobank v. Rosales and Yo Yuk To, GR No. 183204, Jan. 13, 2014
- PCB v. Balmaceda, GR No. 158143, Sept. 21, 2011

5. Nature of Bank Funds and Bank Deposits

- Consolidated Bank and Trust Corp. v. CA, GR No. 138569, Sept. 11, 2003

- Citibank, N.A. v. Sabeniano, GR No. 156132, Feb. 6, 2007

6. Stipulation on Interests

- Escalation/De-Escalation Clause – Silos v. PNB, GR No. 181045, July 2,

2014
- Sec. 43, GBL

7. Grant of Loans and Security Requirements

7.1. Loan Function of Banks – Sec. 40, GBL

a. Ratio of Net Worth to Total Risk Assets

- Sec. 34, GBL

b. Single Borrower's Limit

- Sec. 35, GBL

c. Restrictions on Bank Exposure to DOSRI (Directors, Officers,

Stockholders and their Related Interests)

- Sec. 36, GBL