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  • San Beda 2009 Commercial Law (Banking Laws)

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    136 vues30 pages

    San Beda 2009 Commercial Law (Banking Laws)

    Transféré par

    maizcorn
    Commercial Law

    Droits d'auteur :

    © All Rights Reserved
    Téléchargez comme PDF ou lisez en ligne sur Scribd
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    sur 30
    220 |2099 SENTRALZED BAR OPERATIONS San Bera College of Laws ‘A. GUNERAL BANICING LAWS 4. Gonerat Sanking Law (iA. No, 8704) 2. Now Central Bank Act (R.A. No. 7853) 8. SPECIAL GANKING LAWS 4. Now Rural Uanks Act (Rl, No, 7959) 2. Private Ouvulopmant Banke Act (RA. No, 4033) 3, Savings und’ ‘Loan Assocation Act (RA Mo, 3779) 4. Thi Banky Act (RA. No, 2906) ©. OTHER LAWS AFFECTING BANKS 1, Sucracy of Bank Ouposits Law IRA Ho, 146) 2% Uneioindd Oalances Law (Act No, 3936) 3, Phillopma Deposit —_ Insurance Corporation Act (F&A, No, 3599, THREE | KiNDS OF ENTITIES THAT INTRODUCE FUNDS INTO THE ECONOMY: 1. Ganks : onilies (nat obtalns fends from the public !n the form of duposits and rex {no form of deposit substitutes and re-lend tho same; and 4, Finance companios and othor finenclal Intormodiarios: ios that lend funds + fromthalrovin assets, FIVE PERSONS PRIMARILY INTERESTED IN THE BUSINESS OF BANKING (BIG-Cb) 1 Government 2 Qepositors 3, nvustors 4. Sreditorn 5. Borrowers An lavest lend to tho public ney of 2 Quasi-banks 1 those that obtain turds In YW harge Si Gr txrcumn commtrces Heard PURPOSE Te promote and maltain @ stable and etticiant benking and finunclal.ayster thal ie glovatly comoetiive, dynamia end responsive to tid emande of a develeping sconomy (Suc, ! HL), SCOPE OF APPLICATION ‘The GD’ primary governs universal banks ‘and cornmercial banks, It wuppiatorlly governs rift banke, rural banks “ant, other banking fastiutions, CENERAL CONCERTS: Ranks Entins engageo In the lending of funds ovlaingd In the form of dopotile from the aul ($00 3.4, GAL). loans out tho ar Ia ert ‘HERELRT CaN ADUGAN vee che ne cl acasentc opens, 4.640 AOE SMATOS cate 1 GRALON Wu43149 we sh for aden MAL ANGLE TANG Wee ON ‘earl Mary IAN AINA ACO. DOM Tred ACE AO COMGEPCICN eho he ‘Convencia Law: FATSER SIERO whee chaa M>- KATRINAIGUXE CCAATACTO isl #6 Cl, :ALb MANUELA REYES dp, IAY AGAAGCAY ws on ecu ape NEN TOUAN pa an, JOTI SLO agit, MOAR HUM Cea atm Mele UnOIS ere Insianens io BOE MARQUEK nse ls, SEAN AUENS CESO vaca eat, MARGOR FalloOeonverion ce ensues . 1 Goptel andvak J Soquonen te Sonos, Kr chy mk Mate, Any Manna Sank Mlle Puede, Money WE0, ey hte gr ier, a Ase. Ae Ge 2s Mande, Shara be sn, My aha ai GAMA Pare RegeBaee, ‘ary dane Sexe, ved Togs, Gal Fal Oa Tres, Stepan teset aes. As : foam Heda Col otherwise cduratd through then, althar fer their own ORGANIZATION AND OPERATION A. Authority From The Bangko Sontiat Tre SEC shell nol tagistar thu by-laws of any bank, OF Bny Ame vhinent thereto, Unless accompanicd by 9 ceviltoato of authority Pron. the BSP, (Sec, 1, GOL) The cartficate of muttorty shall riot bo Iequed unions the Monetary Board ie satifiad: (RPC) 4. That all cequiremensta of existing Iams and raguimions fo Angage nv tha business. for which the apricant ts proposed to bo Incorporated have ‘ween compiled wt 2 That the yublie interest ane economia conditions, bath generat ‘and feenl, uatly tha a.tthorzntion; and 9. That the emount of the enplint, the Ainencing, organtzation dirsstion’ und administration, an well a8 tha Intonrty a4 reoponstity of the organizers and aoministratora, rencon ably assure thus sniety ef derocits and the publ: interest (S00. 14, GAL). B. Orgarization of A Bank Or Quasi-fank Consittons: ($PC) 1, The enktyis a stock corvoratlon; 2. Ie funds ata obtulnes from the public, Le, 20 oF more porsons, and +3, Tho vninimum geptal requirements prescribed by the Monetary Boaru o” ‘ulated (See, 0, OL). C. Authority To Engage tn Banking oF (CurehBanking Functions ‘a certifenta of authority from tre BSP (Ste. ¢, GAL), ‘Tne détermination of whethne # person at ‘ently in prrforming, oanklng. or quae’ Parting” funstions without BSP. einer shall be decided by the Moriary Boar, v $EMONY AID IN COMMERCIAL LAW) 2.21 Stecknoldlig Genorat Rute: NO bank shal ourchase ¢r acquire aharos fof I's own enpltal stock or accopt Ils cin shares ng securky for @ loan, Excophon: ‘When aub\erlead by the Monetary Doned, BUT the slock 80 purchased or acquirad, vyathin G months from the time of ts purchaae of sequiaition, shall bo sald 9° aisposed of et a public cr private sole (See. 10, GOL). NATURE OF BANKING BUSINESS. 4 Dobtor-arediter rolationatiip ‘Tho relnonstrip betwoea,a deposltor and a hank is that of creditor and debtor in Felmian 0 tho benk’s deposit functions (Guin vo PNB, GR No, 1-43191, Novanibor 18, 1938). Charnetertaton: 2. Inthe Blue of Itogular deposts <(Gartana vs, Contry) Bank, GR No, Le 30814, Fobruary 14, 1980). b, Contract of loan 'mttuum with the: . Savings Dayosite ‘Tho most common type nf deposit and “8 Ustially ev.danend! by @ passbook. ‘The requirement of prosentation of panabocka fe usuolly ‘neluded In the terms and conditions printed In the passbooks, .A bank 13 negigent if it allows the witht wal without tequtcing tha presentation of a passbook (BPI y, Count of Appeals, G2 No, 112962, February 29, 20¢¢), © Nagotiable Order of, Wwithdrawat Accounts (NOW) Interost-booring deposit accounts thot eombina the payshia “on demand featura of chock ond Investment Feature of savings a=counts, Time Dopesit "An nocotint with fiyed tarm; oayment ol whieh cannot ho legally required. ‘within such 8 specified umbar of days, Note: Demeny, savings, NOW accounts, tine oposite and denesit substitutes shell nel bo sublect (2 interest zellines ;Soe, X242, Manval of Regulations for Banks), 2. Ballor = Baliee (Safety Daporit Function} Reposit stletly for asfeKeaping end for ‘specie purposes, san enifEMONY AION COMMERCIAL LAW 279 Satety danosit boxes Tho gelation batween a bank centing nut ‘alaly Japon! boxes and tls eustamer with reapact to tha contonts of the bey Is (hat of «bailar and bailea -: the ballment for hiro nit tvtunl Hone ‘as boar adopted iin "his pcsdiction. I cannot be considernd ne, 9 contract of lense because the full possession and control of thé safely depesl: box Is nol giver to tha ¢enters (Ia ¥.CA, GR No, 102970, Kay 43, 1293), 3, An Truntoo-Trustor 4. Trust account = ¢ savings acvouet, ostabiished undor a trust agroorent, containing funds administered! by the tank tor the benefit of the terslor oF another porson of persons. 4, Ae Agont-Prinetpat 8, Deposit of check for collection b. Deposit for specine purpose © Coposit for safekeeping TYPES OF DEPOSIT ACCOUNTS (lianateok on Bank Deposits. A, Viray, 188200) 1. Individual 0 2. Joint a. "And" account © Co-ownership * The signatures a} both ca: dopositors are’ requiked for withdeawale, b. "And/or" account + Elthar one of the ca-tonasitors moy deposit and. withenw tin tha account without the kn geen and sige ies Shia setapigcange oF tenet CAPA ind 86 tice 1 2 agree Sheny in of them to we 730, 12009 C:NTRALIZED LAR OPERALIONS | withdrave the whyia depysit during thelr lifetime and transfering tne alange 10 thy survivor spon the deuth of one of them (Vilug vs, Goud of Agpeais, GR.No 82027, March 29, 1990), ANONYMOUS ACCOUNTS #8 agcounis-oF Yiowe under fethlous protibited (RA 9760 3s ancondog by RA 9194; BSP Chevlar No. 251, July 27, +2060}. Excoptiont I cose whore numberud accounts ig allowed Ich as In foreign curranzy deposits, ''>vover, Dankainon-bank financial inuutullone should fencura tnat thy een is Ideniites In an official Gr thor Idantiying documents, (Soe 8 RA 6428 us Lmondad OLA, BCPOSIT SUBSTITUTES (QUASI-BANKING FUNGTIONS) ‘An alurrintive form of obtaining funds Fon ‘ne puis, other hun deporls, through the Isauaricn endorsuinignt, oF ac 2eptance cI cebt ingtumunts for the borrower's own account, for the pu-posy of re-lending 2 purchasing o” Fucelvables und other vbligations (Suc, 94, RA 7653). 1 given uarente a repaytnart, | yiuicving aud $ No sacur a by I yuarantvo thor ' tha depostior refiea on 1 instruments, “(renders Yo eiabity ard eputaton of tie bunk NATURE OF BAR DEPOSIT Al kinds 61 bank dupouity vie LOANS, Thus Ine felationship bying conwclual in natuse, fandamus is tneietary NOT Bn asaiioble fenady since mandames does not lie to tie portyrmance of contractual chiigutions (Maciarng Luemun vy, Alimotir Matyi, OF No. 169794, Oucumbur 19, 2000). uae) 1 uch Doposis, A [Mew J Tre. fduciay nature of a bank-depositer Tolationship Gaur aot convert the contract Dolwoen the bank anu Me depository trom a sunple foun t@ a Yuet agreement whether ‘oxpreyg oF impliad, Failure by ie bank to pay tha deposits is fallura tv pay a slnple toan, ond not a breach of wus. Tue law slingiy imposes on Uva baak @ higher standard of ligeguly and performance in gomplyiing wath its obligations undur the eoriract of sinipla koa, beyond those ruquied of newbark cubes, 70 an Weds Collene of Kaw under a similar contract of simple foan (2aTC ¥. GA, GR No, 136559, Saptambar 11, 2003), The bank can make use as its owe. tno monay deposited. Said amour Is not telng held in least for the depasitur nor la it being kept for eafeleeping (Tang Tong Tick v. American Avatnecaries, GR No, 43682, March 31, 1998), Third persons who may have o right t2 tno Toney depualiad vancet hold the benk iosponsible unlee2 thera 's.8 cour oider oF gain'shmant, The duty of the bank w to lie Erudilor-dnposiior and ned lo wind persons (cslton tron V/orks va. Shlaabank, No, 32876, Aavombur 5, 1990). ‘Tho bonk hay the right to cempensation, It ean setoff the depoalia in “ts hands for the Payinant of any outstancing Indebtedness of the depositor ta Uthat ure due ant cumandzbie (Gulas v. 1/NB, GR No. 43191, ovuniwer 13, 1999, PND vs. CA, GR No, 119357, Moy €, 1997), + In the: case of Cliybunk WA. y, tAodusia” R. Sabenivro, (GR N. 186192, Fobmuery 6, 2007), the SC scid ‘thay thy offsetting or compansation of wspondent’s loans with Chibank-Mania using her dollar ‘accouns with Citibunk-Genoya cannot ‘ee elfectad, The parties cannot bo considered princal craditor of tne viner. As for the dollar accounts, fwspondent was the creditor and Citoank-G nova was tha dobior; and eng So ea semen ato 29 x Jy tds lias iste ahidvovr 3, ntivank® y tt andhiag avings or lime 734), * Bran Ted Goilege af Tay + Paconts may feverinalnse stoposil for thuit minor chidran and guardians for their wards (See. 4, PO 734), ‘+ Wh raapect to theih tants, tony qustdian shalt glva netic In Aang to any thr. bars not to rake. puyments of asposite, dividends, oF interest to th> minor ‘of whom Fe Is the guerdlan, then . auch payment shall be made only to tho guardian (See, 22, Thrin Banks Act of 1995). 2, tered Womon + allowed to open bonk seounts without the ssdlatence of their uubanda (RA 742) 3,° Corporations = judicial persons ave eepaeiinled to open bunk accounts. With Feupect to corporations, the anening uf on aseount in its Behalf loin fact a requhement ‘oven belore ts fife commences. Sueponsion of Payment on ks Deposit Liaciitios fa case 0 berk of quosebenk notifies the Bangro Sentral or public announces a bank hot dey, of In any monner dusnands tho peymant of ft cepos! lables ccn.nvouly for snore thon 30 days, the Monetary Bca:d ney summarily and without need for prior hearing close auch broking Insttlon “and place it under reselvarship of the Philppine Doposit Insurance Corporation (See, 63, GAL). OTHER FUNCTIONS (See. 59, GEL) MRRM) 4, Bocalva In custody funds, decuinents and Wulvablo objects (nt bale oF trustees: 2, het os fineneial agent and bey nd sel, by ‘order ot and for the accouat of their customer, shorec, —avdence of indeblodrings ard lyon uf eecur.ias Maka collection and payments fur the account of uthers and perfor'y such ether Services for thale Gusiome” a4 aca rot Incompatiate with binking business (03 agont 4; Cipen pilot approval of tha Monetary Bourd, acl an qpanaging want, advises, consultent of edininistrater of lnvasinient menagemsAl adviser? senevtancy ozounts; and 5, Bont out satoly duposlt suxes. 6 Ary. alipuletion — aeetapting «the doporhury trom any Kablily “arising from, iota orf arcouns of fraud, en en et ane nepligensn would bo vold: fer being contrary 19 plublie. poh cy (GA-AagN: Devt vy CA, C4, GR No, 90027, Morch 3.1993), Note: The banik shall act as depository of 93 aan agent. 11 shall Koop the funds, socurtilor Sed other nifects. which tt recoivas duly Separated fron la own assets and Nabiltles 4300, 83, GOL). * PROHIBITIONS A ONDANKS! 4. To dently net as insurer (Soe, 64, Gou) 2, For beaks er guasibanks, to declan culicdivds, If at tho time of declaration: 8. Wy alanring accent with the ‘Bangko Sentral ip overdrawn, be WC la cefclent tn tho required Mulally Moor tor government denasils for 8 or more consecutive aya: 6, dues not comply with the, " tguidlty —standarday |» ratlos prosaribed by tho Bangko Sentral for curposes of determining funds rvallable fer dividend declaration: or 1d, Inne committed a major violation as may be determined by the Bango Sentral (Seo. 87, GML). 3, To conduct business In an unsalo oF unsound manner (S90, 56, GOL): 4, Publication of capital stock (Sac. 12, GAL) 5, Unnithortzed advertisement of buslne sal Chs entation (Soc, 64, om 6 a ERIE ron or r \ Ol TER ondae yoo cobb tive founk teen SeceAb-GOURNRRE fio flank URAL Br MEMORY ALD IN. COMMERCIAL LAW] 731 232 |2009 CEPITRALIZED 9:48 OPERATIONS Roawon: To curb undue t pesuiation In the foreign rnaztwngy market and to enforce tha “memorunduin that pess deposits shoud by (undead fram inward foreign xchange remittance (BSP Circulur No, 222, 1993), |. ON DIRECTORS, OFFICERS, EMPLOYEES, CR AGENTS OF BANKS: {FOOD.A) 1. Make false anivies in my Lank report of statement or participate In uny fravdyjaut anwaction; Without order of a court of component JeAindiction, cote Yo any (nauthoriged person any Information folulive ts thy funds Gr prope.ties in diy custoy of the Uenk blurging to puvaie Individuals, corpaiations, oF bony atyr arity, Accu ile OF any other form of femunwiation In conhucion with tie upprevel of 9 lean of «ther ered uecortmodation fram ald beri; 4. Quurvelye 0: aid 19 over salulrg any Sucuily tor the purpose of Intuencng in avy way Ihe actions of the bark oF fy wun; oF 5. Qulsoures inherent benking functions sa bant cannot ongeye the surviees Df junotner unity 10 receive depos's co ity behalf, the bank has ty 39 it by sell (oe, 58, GIL) Boayen; To prevent vivlavon of Bank Buaeey Law (HivAlbook om Dit Dypasity, A. Virey, 199809). bank forms and promotional ‘maturaly; 9: Credit Investigation and cole ction: |. Processing ci export, import and ‘other yuding transactions; and equity sarviess; f, Property appre Properly management services; \ Messengor, courier and postal servicns; m, Securiy guerd services; 1. Vehicle servica convacts, ©. * Janitorial services; Other services os determined by the Manotary Beard, ©. OW BORROWERS (S00. 55.2) (AFOO) 1. Fraudulurtly— vervatue "propery dtlerod €4 security for 8 foun from ihe bank 2. Funan false or make misruprsssntations of suppression of atarlal facts for the ‘purpose of ‘obtaining, renewing, of Increasing @ Joan of extending tne pariod nureol, 3. Allempt to defraud the sai bank in ha evert of a ccurt action to recover & loan vr other credit accommodation; of 4 Oller any director, oficer, employes oF ayemt of a bank any gilt, fee, comission, ov any other fom af vornpanyation In order to Iefivaney such persons into approving a van o¢ other “credit accommoastion application. San Weds Collene of Law NATURE OF Hank DEPOSITS * Hoses; aartmayetenra yan AVN of gl ae LONS. Tu, ioriiea ale toraas Bese Bo ay a ysl io naire Ine feioviny functor rani eet sa wae Mirus wctooeny Mbpmaah ites aarginyy BA oa i fystoms and. processe', uxceot reo WM Beg akak on conyteatt fe certain functions aifecting ie guint AOMuUlanuD>Eugunnnw. y Mater ‘ability of (ne bunk to ensure the fit Li OF technology services ceployad co ttuet He thatege ara, baviness ’ uyecives tod com th el paint avs ang caylee w, Bata inaping, storage, and ocr nat folaud ystems sa dono say Cloating and processing uf checks poppies torn Sa duds in tne Plage ie int Caring House System, ina i an 4. Pantng of bank statements Ara win ie Graal card waren, onigatey WBF oan Fimtng ot bank ieén statements ey end eioann’ woot het etdepvat tocos, = UnvAT ag ie oar" (eure 13% Leu Beda Healtege of Hato Tha bask can make une 28 ls cwr the money dopesited, Seid ainount [a nat beleg hat I trust for the depostian nor Is. hing kopt for gatekeeping (Tang, Thong Tick v, Americar, Apothncartes, GR'No, 49832, Movch 34, 1930). MEMORY ADIN COMMERCIAL LAW| 233. waltieg to any thei bank ant to maka payments of dapnels, dvldgnda, oF Interest to tho minor fof who. ho is the guardian, ten such paymont sha? be mado only to the guardian (Sec. 22, Tht Annks Act of 1995). The pernone vo reey rave a tight to the 2 Marttad Women » allowed to opnn tek money deposed Garinot hold tna bank accounts without tha esslstence of isle fesponsible unions the-0 Is. a court older or husbonds (RA 7192), garnishment, The duty of tho bank [9 to Its 3, Corporations = judicial parses ure Credtorderdaltsr rnd not to thd persons capaciisted 16 open bank accounts, With (Futon tron Works vs, Chinatenk, No, 92676, respoct to eemporations, tha opening of an November d, 1920) Account in Ns behalf isin facta requiremont faven hetora 18 fe commences. ‘The tank has the ight fo comipenralton, con eatol the desosiis In ite hands. for ine Suspension of Paymont on tty Doposit pavmont of any outstanding Indeblecnaas of Liabilities the doposior to Mt that are due and case benk or quasi-bank notifies the demandabla (Gulian v. PNB, GR No. 43191, Novernber 13, 1938: PNB s, CA, GR No 119387, May 6, 1997). + Inthe cane of Citybarhk NLA, v, Modasta fk. Sebanini:0, (GR No, 165132, Febnrnny 6, 2007), tne SS sald thot the o-satting or , sompensation of respondent's loans with claanils using her doliae se-cunts ‘wilh Clbank-Geneva cannot bo attested, ‘The parties cannot ba considered princinal ctnaltor of the othor. Ag for ‘he dollar accounts, raspendent was the creditor ant Ciubank-Gcnave waa tho deblor and a3 for the outstanding rans, petttoner CitibankeManita, waa the creditor ane respondent was the deblor. Since legal compansalien was not pessit'e, pelltioner Giivank could only usa tesoundent’s doar accounts with Ciibank-Geneva to liquidate her lorna if sho hoe oxpressly utherlzed i to do 80 by contract. SPEC'AL RULES ON DEPOSITORS 4,, Minora= thoy ann opoq haak wecaunts in thelr own right wrovided thot: thay ara al lentt 7 yrers of x90; thay ar0 able to road and arto and nove sufficlant discretion; ‘txay te nat ctherwioe dliscualited by any other incapacty: and N'atould enly bo savings or tira deposits (Soo. 1, FD 724). © Parents — may —_naverthotens depoult for their minor children Sang guardians for thoir waids 4 (800, 4, PD 794), With tespectto thrih hanks, any guardian shal glve otis in aT eo (n. Bangko Sentral or publicly announcen A band holdoy. cr ia any manner auspands. tha fayment ef deport Hapios continua {ne mero thon 90" doys, the Monetnry Sond thoy suninnniy ord not mans (ot phe Rearing ‘late aves, Unning Inston ‘ret fine h vnc receivership of the Phlipino Bapesit insurance Corporation (Soe. 63, G8) OTHER FUNCTIONS (Sec, only (RPM) YP Bcnive in custody funds, doeumania nd inline objestn (aa alia or trea) et ae Rretelal agent and buy and 0h, by ordar of nd 'ot she acount ol thelr tuntomet, tharas, ovidencas. af Indebiednens ond types of eecuios 3, Mowe enlection and payments for the Aiea Se CoN 8. 89, 2 nd 4, Up FEN te vt Sobdrdis BSE asl" hhahaging merase ot Miso! et EZpostery oF #8 an agen fa funds, securities: pate wn reese iy end olor 234 /2009 CeNTHALIZED wan OPERATIONS on Body Cotleye of Law ac ee nents ne separated from ily own ussets and lbiilies (Soe. 63, GAL), RULES ON FOREC.OSURE OF A REAL ESTATE MORTGAGE BY A MUPTGAGES: ANE Application: — Jadicist cr enteudielat foreclosure r ao An ona yo | ie weiacoton orga ke teva Bg 8 ein 85 ba) Ligiaion of ig “Teroclosute 2. mortgagor 1. 9 furidieut foursoa = Av any tog befor the ogivration of the cenicece frwcieaure gale whieh aie | oa stell Le enora. than : mene attor torectosue, yj aeehaver is uarier (Sue ay ‘igi ova er a anno aad rast «| 8 tia costs ara aqpurwus newt ud by the bank or inaltuion (ram the aula and custody cf tho propenty | 1838 the Hdorvad iycome anveatton. (Sue J: Cuno Sank 4. CA, GR 135068, dun 3, 209%) Purchaser has te sigh to onier ypon and (eke | Bossossian of the propanly brinvecietaly ator Is date of thy confiamauion of bia auton Sols to Sdniainer the same io accorduriee wi law ($0 47, Cou ' ORGASM AN oye eam! ‘ny pollo av cout ta enisin or vast Go conduct Of Torecionure Frocuedinge ‘sal ta. gan dag Sou89 only upon fing By tho pullionr Uf. bead ‘amount xed by Oy cout contend tnt he wl ay Gl the camnages which the bonk nay sular by thy anoiiag or rout of the erocovers Brscondinga [0g 47 A bank may be boud by un agreement Providing fot a” Kenger rouemption pitied (oeun uci! Bank v3. CA, Gh tio, 129617, Decambor 17, 1999)" thus, eaaverting I to Getvontlana! fasuinpien oF by estoppel ihe SMinsions was unitalaialy mae Whor the morgagev is a bank, amoust of vwsempllon pried 18 povuraed by See'ion 78 ot the GBA (new Bac. 47 of the GBL) and not Suction 6 of Act ng, 3135. The gorges rule in redemption Is that tna intenton to redeem yyy en a ee Bie chug be - accompanied by actu! and simultaneous Unuer of payment, AB an exception, while the fling “of judicial’ action within the one-year poriod will proserva tne fight to redeem, auch judicial action must be fled In yood falth (Maylou Tolentino v. Cox it of Aupeats, OR No-171354, March 7, 2007), Tha leave of vhoitier the redemplior w naw roid thy canuct redumption pneu ie Puatter thal wld be resolved by the ragulur oun; tha LRA Was vosted with Jurisgichon to resolve only the registrabilly of the aifldwe ot ronuelidation was the cortiieats of ¢adumion {San Pornunto Rural Bank Ing. v. Pasnpga Gumnivus Davutaament Corp., GR Ne. 1WUUa, Anni 3, 2007), DIRECTORS & GFFICERS Fitand Proper Rly To maintain tha quality of bank mansgumant ind atford Valter protection to depositary and tho publ, In genera), the Monvlery Would snail, prescribe, pass upon and review te avaitications "aid disquatfications of Individuals wlected or zppointed ay bank Gitectors or officers and disqualify these found unfit alter due 1 otee (Sac. 16, GAL). In determ'niag whather an individual is ft and Proper 10 hold the position of @ director 9. ificer of w bank, fegord shel Lo given to ns ‘ote sry, experience, education, taining, and competence (Soe, 16, GBL). Composition ov Board o¢ iractors Thera shell ba a: least §, and a ma.imum of SE eet 9, RGB: Peers i NbN Eheebssrrsy se nemberwelihiaeige fchnologias such Bes conere ing and videowontraang (S095, Gat fone Taeda College at Heat. Prohibition on Publte Ortiolats Goneral Rute No appointive nr oleciwe official, whsthor full Gime or parttina, shall, at the same time, verve as'on offieor of any private bank (S07. 19, GBL). Exeoptione As overage provided under (nc, § of the ural Bank Act of 1992; 2. Warero such eonice’ 18 Ireidoniat to finandlalassistones provides by, the government of & guverntnert-orned of = centred corporation to the bi nk; 23. As otherwise proviced undar exlating lve No'e: A bank ho'ding out ito offeers and agents as wort'y of coafdnace wil rot be peimited te profit by the fraude they may ‘hus bu enabled to perpetrate In the apprrent scope of whale émploymont nor wll it be ponnitted to ahi: from Tks eseponcibitty for ren frauda, evan thouch no banefit may fcerve ty the Lank thoretram (10 Am Jur 2d, . 114), Accordingly, m bon'ny corparetion Is tlavie to Inpocent’ ‘third parsuns where the ropensentation a made In tho course of Its _ business by an agent acting within the genera’ sonpe of Na aulhorlly even theugh, in the radicular ease, tha ogont Is eecretly abusing his authetily and attempling 19 porpetrate ‘aud upon his pilnenal or nome uthsr pe“scr, for his oan vitimate bonafit (Philinvina Banking Corp, v. CA. end Marcos, Gt No. 127469, wanuary 15, 2004). ‘TRUST OPERATIONS ‘Only @ slork corporation of 3 person duly ‘ithorized by the Monotary Board ehall act a8 @ trustee of administer any ust of hid plopany Iv trust or un dapont for thn 99, bbenoft, or balialf of otliera ~ ‘rust ently (Seo, 79, GBL). Powars of trust ontities: 4. "Act as (tusita oh ery mortgage. of bond fenyed by any munielpalty, senpe intion or ody polis und to accept er execute any trust eontlatent with law, 2, Aatunddr the order of appointesnne of any cour ae guardian, ronsivor, trusten, ov ooposier/ of the eotata of any minor or Incompetent parson, an as tecelver and depoaitary of any money paid hito court by partion 13 any legal proceedings and of MEMORY AID IN COMMERCIAL LAW! 235 promt of any kind wht may be brow) Under Ua juretetion of th eeu, 3, Act as the exaautor of any will whan it tk ‘narod the axecutar thereot; 4, Rel at adbiintsiratsr of the estatn of any doceiaad person, with the will annexed, or ‘tno thre In tho Wil 5, Accept and oxocute any ust forthe hetaing, emanagemont and edminiaeaton ‘ol any eaints, cent or personal, and the rene, ksude, and prot theteot, 6 Eslatillsh aed manage common {nist ‘unde, subject. to such ving and fagulailong.an may be preseribed by the MB (S00. 99, GBL). Proiahitlonn: 4. No tue? entity shall, fer account cf the irustor of the benetietary of the trust, unless prior to lit executton, such trosanclion has bean fuly disclosed nv specifealiy authorlzod by the sian', benefeiary, alher party-in-nterosl, court of ccompetont jurisdiction, or other compatsnt authority: (LIPS) 1. ond. sell, transter or assign money 81 property to any of the dapariuonte, draclors, officers, stockholders, 6° employans of the’ trust ently or fijuclary, Ineuding relatives within tho 4 dogrea of consangulniy or atfily, & tho olnted Interests, of such rectors, olfcere and stockholdnra; oF here the trustee f 0% of the ‘naling dogree of 2236 12009 CENTRALIZED BAR OPERAVIONS vorpmabon whore the trustee or fidticlury vy at least SO% of the Wubsaribad cupitat or voting stozk In ke Wn right and uot ag Wustse nor In 8 twp: eepnlulivs capacity Soll, Wenuter, assign, or fend money proporty froin one ‘rust 0: tiduclary account (y anowhar excep. where tho investinant is alowed by the Monetary Bours (Sue. 409.3 manual of Rogulations for arr:s; Sec. 80, GUL), 2 The tng business and al funds, Properias or sezuitiss received by any Irust ently as oxucutor, administrator. guarvan, Nwuslue, feceiver oF eposiary all 09 kept saparale and cistin:t from the gunerat husiness, in jucing al other funds, propattivs, ond uisels, uf sucti vust iy (Sen. 97, Gal), PENALTIES FOR VIOLATION OF THE GBL (See, 66, GBL) 2. As provided ay specie provisions; 2 Sewions 34-37 of RA 7559 (by exctudl g the bnk from elearing); 3, Suspension or rsmoval of the director or officer, and Dissolution of the corporation by que warranto procuecings, To maintain a egutral conta yc uthority that shall luneton and operate as an independent and accountable bu dy in the discharge of its responsiulitios oncoming mney, vanking fend credit, BANGKO SENTRAL NG PILIPINAS (USP) ‘Tha state's central wopetary authority cin wor Wih tha rssponaiility of administering ts ‘monalary, banking ord credit systor of Uo country “nnd iy grented ‘he power of supaivision and examination ovsr bark and non-bank finanelul institutions — pervouning uesi-bunidng tuncilons, Including savings and Tan associations (Bustiego v GA, SR No, L- 40965, uno 30, 1967), Primary ubjacivess To malnieia price stablily eende sve to halancod and suntalnable groath of the economy. 2, To prnule and multi stohetary stability and the GunvEnibty cf the peso (See 9, NCBA), 236 Rospensibltios and Functions: 1. To provide po'lcy directions in thy areas of money, banking, and cred; 2, To raquiale the operaiois cf tance conpanles and “non-bank \ fnonelal Instone performing’ -quesi-danking Junctions, ang similar Insitutions (Seo. 3, eA); 3. Custodien of reserves (Seas, 64-66, 94, 103, NOBA); 4. Clusilag amet or hese, “espuctaty winara the PCHC does not operate (Sra 102, NCBA); 9 Monoy Funcion ~ shili have tra sole pavier and euthorily io issue currency ‘thin tha Prilpplne tordtory (Seo. 4-60, NCBA) 6. To engage in cpen morket operations ~ prrchose nd” salo of sucurites Uxclusively. In eccordanee wilt price Sabilly ndfectia: 1. To act us Ga banker (Soos,. 110-118, NCBA! und finanglal adviser (Sues. 123+ 724, NCBA! ofthe government Designatad as via olflal depoutary of tho.” Goverment, its patie Subdivisions ane instumeniaies (Soe 113, NOBA) and'snall represent iWin all eaetary fund Uealngs: b, Bofora -undertaking any” credit opsiation abroad, the Goverment, through the Secretary of Finance, shall request tho opinion, In ring, of the “AB on the monetary Implleaicas tthe corkampiated action (Sue. 123, Neva Under Avie Vil, Sue, 20 of tho 1987 igi the “Presdba may et so i Roa asi 10, SupervissPc( ts bathing oyster, Sn Weds College of Haw + Dangho Sentral ehall have supervision over banking Inatiulons anit quinsle banks, Including thelr auba‘vlarise ind ffilates engaged In allied nclwitcs, Subsidiary ‘Neespoiaitan whera more tian 50% of tha voting stock Is owned sy a bank or a quest-bank Afiitiato ‘A corporation where 50% or loss of the vallng slock It ovine! by n honk or a quase-bank or vwhinh vs rotates to linked 9 such notitutlon oF infermadiny — threugh ~ comn.or. slockholde-t or such other factor may be daterminad by te MB. MONETARY BOARD (Ma) Thasbody through which the powers and functions of tho Bungko Sentral are exercised (S9c.0, NCBA), Composition. Soven 7) members appoint2s by tha Prouidant of thy Philippties for a term of 6 yonrs-consisind of 4. A Shaleman: Governor of the DSP; 2 Armeraber of ihe ‘cabinet to be designates by the President of the Philippines; end 23, Five (8) members wt shall come tom the pete or, a of uhoin shel eave fo time, Note: ‘The dagres of diligence routed of the members of thé MB, aficlals and employoes ef the BSE In the performrnce of their functions 1s oxtriordiinary diiganco (Seo. i, NcBA). The legal obilgations of diljence and good faith that BSP officiaia owe to the puble start ‘ath tha affeal acts of the MB whch, ghtly or ‘wong, are tha ese of loss oF Injury x0 thi’ paiting," not any preparatory report or fecommandalion (Borfong 2n v, oyor, GR No, 191276, Jonuor/ 34, 2008). Corporate Powers of the 13? (80P-8PAL) 4, To adopl, ultor and use a corporate See! Which shal be Judteistly neticed; 2, Toentor ints Contracts; a evn, ane sel! or oinorwise Hie east and poraonal Property; 4 ied" an Veda College at Bem, a MEMORY AIO.IN COMMERCIAL LAWL 23 8. ‘10 do and Perform such otner necesne'y 0° penter powers 10 carry out purposes 4 NODA (Son. To rcqulre and hold such Assets nnd inet auch Nabilflog In conection with ts oparatont er at ore esserial to 12 rooar eonduct of operation; 7, Vo compromise, condone, of release, i Avhots 3 In part, any elem of, of seiiad Liintly tothe BSP, rogerdioss of the Amount Invalved, undor such terms snl vandltons as may be prescribed by the mo. : CONSERYATORSHIP OF A BANK OF QUASI-BANK’ Ground Wheneval, on the basis of a report ausinitiee by the "propriate supervising or examining doparimant, no Monetary Board figs thal ‘bank of qunal-bank is: 4. In naiate of continuing inobitty; at 2) Unwtiingnens to maiataln 2 don Fquidty doomed adequate to, prot Interest of dapostors ard creditors, + A -consarvator appointed ay the USP may tnko over without tho ned oF fr aciaring the bank insuivent, Liquidity Ablity of an aenet to bo converted Inta east quickly and without any price dlsecunt, Solvency ‘When fiabltios amount to less. than to al providing the abilly to pay dabte £38 | 2009 CENTRALIZED BAk DPERATIONS OI TIY CENTRALIZED BAR DPI Perieciod Fopudlotad, franscotiens —cannct be Powors of conservator: (TREC) 1. Te take charge 0! the assets, labiites, and the manage.nont thereat, 2. Reorganize the managemunt 3. Collect al monies and debts due vals Bonk; and 4. Exercise all powers necescary to restore As vagy, wil tne power to overruiy oF fovohe Une acticns of the previous managamant and board cf dit clors af tho bank "or, quuskbank (Firs! Philippine Inlomatoral Bank vs. Court of Appoals, GR No, 115849, January 24, 1926) The poware must bo related {c prarorvation of ‘aa4els, reorgunizaticn of mian.geirunt end the lastoration of viability. Such pawer (9 sovcke Sannot gxtand (0 porbfaclo repudiation of erleciod transactions: atnenwise they wedlo Kfringy ‘the wonimpaisnient clause of the Gonslitution, Tha powar (0 coveke ventracis Suly covers those tia are dagried daicetivo = nd, YOK, vUkluble, — unonoreouble ep "aselssibla, The cotisorvaior’s oowar Is no. uniateral snd ‘he cannot slaply repudiate vivid obigators of $e an, Hl auriy would be to enty beng cult actions to asaait such contracts. Yo 1uls iherwiso would, enable a failing “benk “io becume wows, ut the -wspens ci nied Pores, y simply goling the eenservator to vidlatoraty revako ail greviaus ‘ea.nd's whieh liad ene vay of another coms 19 be 2ousidared unfavorable to the bank, ysiding “eihing to purteciad naniiaewal nis ney Wasted interosts 9° tied pert who “iad dua vat "tho bande (Fast Phvioping thor rahon Bank ¥. Count of Azpvals, GR No. 119840, January 24, 1990) Toninination, 4 When the MIs satisfixd thatthe Instiitlon cat rontinue to ove-e'e on its OWN Bnd the conserve torship. i nw longer neceusary;, 2. Gut it the ‘continuance ie, business of vis bank would Involve probabie loss to its Goposliors oF ciediors, proceecings jor fecelvurship and liquidation sit bu pursued (Sue. 29, NCBA), RECEIVERSHIP OF & YANK OR CUASK ANI GLOSURE Recalvarship Ia equivalent to sn injusctian to Fosvuin the bank in any way Thus, the i Xj EER ag \9 Bun Bods Cattay> of ary ener ean NE Collage of Baty appolnimant of u vecelver operates to suspend tne authority of the bank and of kt, drocion “and officers over ite property and utfacis (Wilanueva ¥. CA, GR No,’ 114870, May 20, 99 ‘nab to ay Ueblities "3, Nouficben wo ine 28 they become due In BSP or putile the ordinary cout of ‘nnnouncernunt of uelnoas, but nor a bank holdey ‘sucing inability pay | (See. 83, GB); {nove caused by extraordinary demande Indweud by fnar la, panigin te boning ‘comraunlys F Siipeniner payment cf Osh ation ccontinucusly for ore tnén 30 days (Sve. 93, Gury F ineutislanicy of ranleable 2s8et8 0 motile ‘ouiltion: “Table eontinwe— |S Barattonee Pusloos withuut conducting involv business in an ‘wi un afe oF unsound mannor (See. $9, GBt): Wai visilos ofa ‘ae and de nwt Sue. 97 tat bas bbecou fina, involving | aeruenuactons wah amount io Pave o aissration ol he [oat oa ian j Baie 80019 BaD A acibEe ios bi ll vol at Ma it aN Charis Setetastene eaten wait may “ue Permitted ‘0 resume foam Basha College ol May busiease vith salety to ts dopoeiters ond ereritara and (he ganinral onic OR Tiquidaton, + Any duinem'nation for the resvmption of businuss of {he Institution shall ve auhieot ta plot approwt of tne Monetary Noort The revelver stall pot, with the excep ©) adminisirailva agponditutes, say or commr; any ect that wil Invawe the Wanster of disposition of any nesct of the Instituions "CLOSE NOW, HEAR LATER" SCHEME 1965). The mero fling of a ‘See, 29 of the Central Bank 22! does NOT “contymplaty prior notion anid hooring before a bank muy be diraciod o atop operations and placed under Fecelvorship. it 18 enough that such faction Is mada tha subject of a subrequent fudletal znviow, When the taw provides for the fling of a case vthin 40 days wer the ragolver takes ‘charge of the assets of tha bank, it Is urmisiskable that the asszlled actions should procede the ‘ling of the case. ‘The legislature cov'd not have intonded ‘0 eutncrize *no rior nutine and nearing’ Ia the bank's clonure ar at the: same lima allow @ Suit to erinui ton the basis of absence thereot (Cena! Boak v. CA, GR No, 76118, Merch 20, 1953) The purpose of the scheme Is to PREVENT unwarrented dissipation of the bank's atsale and 63 vad exercise of police power to preivet the Unpositors, creditors, stockhelers. and general puble, Dua’ procass 00.8 not Recaseariy require prior hannag, 9 hearing 0° an opportunity io ba neard teay ba aubssquent to thy elosury, {Control Bonk v. CA, No. 21146, Septombor 20, 988). To require pre iaus heariny would ot only ba imprectical but would tend (9 defeat the very purpnte of the hav when Ie Invested tha Monetary ‘oard with such aulhorly (Rura! Bak of Lucona vs, Arva, No, We21148, Seecembor 20, sia9 for recolveranip can tose a bank run and drein iis asgels in days even neurs Jaoding. te Insolvengy even i! the bark. ba actually solvant, (Contra! Desikv, CA, GRNO 1437859, duny 26, 19091 sateen MEMORY. AD IN COMMERCIAL LAW 239, Note: Tho aurpore ot the law Is t6 make tho ‘oloture ef a ban summary nnd expediitinia ty erdar to srotect publi2 {ntevaat, THs I8 piso why por notice and ering ate no langer enquired botore bank can d6 eloned (Rural Bank cf Sen Miquat_ ing. vy, Monetary Board, It No. rsn9n6, retain 16, 2007), 4A. Only stockholders representing the majority of the enpltal stock “a bank havo the personality to flo a petition for ceniorar to be fled WITHIN 10 DAYS. from reeelt by the board of directors of the inetivlion of the ofdar directing rocelvarahip, Nguidation or conservatership. Raauon; Stockholders owning a majority fof the shares are expected to be moro ‘objective In determining whathor thy resolution is plainly arbitrary and kssund in bad ‘alth (Soe, 30, NCBA; Central Bonit v, GA, GR Wo, 76118, March 30, 1993), Romody Actons of the MB taken under Sae. 29 oF 39 nal be final and exeeutory and may not be restralned or set aside except on potitton fur cortlorarl on Ihe ground that the action inken sas In excuse of iriadiction of with such grav ebuse of siaeration a8 to amount fo lack or coxcess of jurisgiction, Etfoct of Filing Potition for Reviow The pandancy af the caso does NOT diminish the authority ef the llquidntar to administer and continue the park's transactions. Ho is allowed 19 so ee collectibtes ond en ror elvablut rg cli ov roe ne i aL cB OroLLt. AMES THA URgin8* asr ‘ho ba r2ition at 3. Diresigh aa 1B In wating of 260 $2093 cenrRalizuy iE OPERATIONS, 4.1 the MB chal tina the stctemons of tie ape ctinout ta Ga-teay, snd oppolat 3 fanelver of iv veaeta aru liable of toe bunk (Zuneo Filia vs, MB, GF! No. 70084, Ducimbue 11, 1901), 5. Witla’ 80 days, thu! Mi shal delormine and confiral if the bank is insolvent, ane If peated Internat raquituy, slow ocr the Iquidutlon af the wan, Liauioation Grounds 1. Tho conden of the bank is ane of Insolvency or tat Ite soninusnce would Involva provabia hise lo hs deposiars ino ‘rior. 2. A datntmination by ihe MB that the wank ‘cannot bo reliabiltated. Procedure 4. Racower anal fle ax ato, wit Ur prope. RIG, 9 puttion tor asastanes fir the liguidation of te iaxttution pursuant to a ‘iquidation plan adapled by the POIC fo. ‘general application to al closed banks. In case of quasibarks, the liquidation plan shall be auoplud by the Moncwiry Buare Receiver shall sonvett the assets of the insiituion fo money for the puiprse of paying the debts af the inetiutian (See. 90 ncaa) 3. Payment shall by in accordance with th tule an concuranga and prelerance of ‘exo OF — AppoiTMENT UF Liquibarion 1. Rotention of Jurldigal Parsonality (Fea! Mowr Ca. CFI, GR No. 20119, Fobruury 18, 1920); Noten A bank widch nad beun closed by the MB rotelns Ne ‘uridical porsonauty b Which can suo end be sued Uirough its liquldater. Thy only limitation beleg that the prosecution oF defense of the action must be donv thraugh te Hquidator (Hornandee vs, Rural Bank of Lucenn, Ine, No. L-2979%, January 10, 1976; citing Wavar v Bank of Pendleton, 65 SW. 2” 167) 2, Buepsnston of Qporations/ Stoppagy of Buulnuss; oan Wenn ultone ot Ler ole: The forcible closure cf ine Bank by opurations of faw permanently sovered the winployer-employea rulatioship. botwostt Hund te wmployees whon it coaead poration. $u5h 8-ve‘anee isnot eMuetus by the bani's wubsequent renabiltaton (Comnista-Domingg \. NLRC, SR No. 166761, Ocfouar 17, 2906), Acsuto are deomo fr custodla logis = Agnely in the handy of the receiver or Nauidntor “‘ahall’ be uxompt from. \yémishinent, ievy or execution (Vilunuova, Cou uf Appaais, Git No. 114679, Moy 100, 30), 1998; Sty of oxeeution of juclginont warranted It a bank was placed under rocolvership, ‘To execute the judgment would unduly dapicte the assets of bank (Lipu.a v, Dovalujnnord Bank of Rizal, GR ths 73884, Soploinbor 24, 1997). Bans Is NOT Mable to py Intorest on dyparits ‘whieh weerued: ducing tho korlod of suspension of poration {Ovursoas Bank y, 24, No. L-60047, April 21, 1985 Raason: Untess a bank can leng money, engage in international transactions, ‘cquile forvclosea mertgaged propenios cr their proceeds und generally engage in ‘ulber banking and financing actives from which “it con derive incon, It is uconceivabla how I can cary on as 1. ‘cupositury obligated (o fay. stipulated imerest. It should be deemed road into re aimnarrace ‘nC gp Sa cole Ug AL aL LC Seria 8 A anskeven Gone 99p). i new dsgost, Siged fo solct pre: Leen den Calteye ot Late pert uf the sefely of tin gnuk ait in connection thoreveth, tn mortgagns securing deble, The ravei er must essamblo th assets and nay she ‘abligation of tha bank tinder recelversh'p, fand take alps {9 prevent alss’pation auch ansots (Provident Saving Bink vs Couit of Apfoal, GR Na. 9218, May tT, 1902). totsalees 7. Deposits db" not decor preferred credie (CB-¥, Morle, GR h2.l-30427, Mauch 12, 1978). 8. Exelusiva jutindiction of, Nquldatlon court - pettaids only to the adjudication of laims aigalnsl the bank; cots no? cover “tha raverte aliuation wher Is the bork ‘ihleh fies © etalm agnine! another perse cr legal enti, CURRENCY, MONETARY STABILIZATION AKD FUNCTIONS OF THE BSP reso. Unit of monetnr vaiun in the Philippines, represented hy the'*P* sin, It's dhided into 400 equal pn.ts catlad centavos, represented by the *c" sign (Soa. 40) [Ar Monetary obfigetiona shall be sated! In the Pinsigpine eurrancy which is the fagal tenger in the Philippines, However, partios mey agree thot the obligation of frananction. shel. 30 setied th any other currency at the time of oaymant (S80, 1, PA'0{09) LEGAY. TENDER i Nolen and cole issued by the Cangko Sentral ore fully quaranteed by Me Republic find chall be fagal tondor in the Pislppines fer ail. debts, bol publlo and private (See, 52, NCBA), LEOAL Coins 4. F-Pedo, 87080 ond 10-1%50 colus: In amousia ant excoading P*,000.00 2.: 25 cantavo goin or fos: in inounts not ‘xeseding P100.00 (Chunar No, 837, 2006). ‘Checks 4. thoes rocreserding dciand —depostis, which do HOT hove Waal wundor power fand thelr deospionce in the payment of pUntO and private cia L. ut sto eraeltors eniien, "2, But W check that nas es sleared and © exnultad to the necount af the creditor shal TENDER POWER rhage: UL commence! ys tq vole 8 19 @ @oltvary to the ereciter ot caak in a amount agua to the aniourt crediiod ty hla peccunt (Sac, 60) REPLACEMENT OF CURRENGY CIRCULATION (S02. 571 Fhe Bangko Serial gall wihceny from ErSaaton ad domonetiza ali nals and eo nian Tat Any reason are unfit for elycuation aeptage them by adequate notes and Feins, prozkled howuver thal the BS" ahall nok toplene " 1. nales'and coins the IdentMtatlon of wihish Is impasse; 2, cola which shove sighs offing, cliplnig or porforatlon; vt 4 anes wileh have lost moro than 2/8 of ' tors surfvee OF oll of the. skjnatures inscribed thereon ’ FOR RETIRGINENT OF OLD NOTES AND COINS ‘Bangko Sentral may cal n for roplacamont: 4, Notot of any serins 0: denomination wiikclt ‘avo more than 8 yoars old and a. Golnewiileh nea mote than 40 yon Ht Rulne: 4. Notes anel caine called in for replneament shail goniain I2ga} tender for a peviod ol ona year from tha date of call 2, Alter thot potted, they shall cease to bo ‘nga! texidor, but during the-folloving yoar er for such longer ported. a9 MO may datermine, they may bu exchanges al par and without charge In tse Gangko Entra) and by ogon's duly cuthérlzed by the Bargko Sentral for this purpose, 3, Ais the expletion of ths latter poriod, tho notes and have not eon “a RON aes Se me oe ue TOLAW wis iy air AAW) et 12 12009 CENTRALIZED DAR OPEIV.TIONS. HT Restricing i during Inftation to curteit sponding. Threa important Tools to Achioy) Price Stabllay: 1. : Discoua Polley BSP ls empowored to extent foang snd advunews (2 tucking Institutions to infisenee the volume of credit cor sistent Wilh Mu prize utabllly objective (ue. 8F, NCBA) The MB! chal fx the Interect ane fedlscoint rates tu be chergae by ie BSP. on is credit opeiatione.. intece ze and fudlecount civ sha by apoligd to ws banks af tha wine catagory unitormiy ond vwllnaut viscrimination (Suc. 85, NCEA), 4. if BSP wants to Increase money supply, & opens tne fed scount windew bby raducing interest on ane; b, HF BSP: want fo deorrase money supply, closes the rediscount \Wwlndow oF chisiges vary high interest ‘atus “or rudiscounted nates. OpencitarkerOperations {Soe gn, NCBA) The GIP may Luy and soil In the open market (a) uvidence 9 .de’iwunnsr ‘sated vlrecaly by tae Government or by its politica! subdivisions aio (0) by government Instumentatiles and telly {yvaranived by the govemment a. Mf BSP wants to increase. money supply, I buys government securities; b. WH GSR. wants to decrease money supply, It Solis government socuritiug, Roserve Roquiremonts (See. 94, NCAA) ‘= 10-contigl the volume of monay ererted by the credie operations of the banking system, all banks operaing in tho Philppines shall be required to mairtain rasoives ayalnst the Jeposit liabilities Ware a cortuln percentags of te deposit 1s got aulde and cannot be lent ot. a. Ifthe volume of money is high, BSP wiltairg rwsurve regu.erne b. ifthe volume of rnoney ie tow, rozerve tequiroinant is reduced Rulast 1. The required reserves cf exch benk shall:be proportional Le we Voume of its deposh hnvtides, 2, Since the required reserves are impoved primatiy to coaval ine Volume or money, the Bargko Sentral hall not ay Interests thereon (Sue. #4, NCBA), 3. Dep2aits maintained with the Bangko Seniral as par “of the reserve requiroments shat! be exempt from aliachment garnishment, or any other ctdur cf piocess of any court oF agency (Sex. 103, NCBA). 4. No ingreage of more tran 4% paint win Su-day pariod INTERNATIONAL MONETARY STABILIZATION MB shall determing the exchange raia policy of the country, ASP Ie required to mainwin adequate international reservus tu meet. any foreseeable net demends on the BSP fot foreign currencies. Iutoraational Reserves Includa, but whall not be limited to, gold and astais in forelyn currencies, BSP Iu authorized 2 adopt measures that aro necessary to ewract abnormal movemens In Incnetary svpply (See. 62, NCBA). BSP can purrhase and soll gold and foreign hwles and coins, and wocuments and instuments or typas customarily em ployed for interational wansler ol funds. Foreign texchangy lransactons shall be wih tne following eniilles only: @ Bankiig Insitutions operating in tne Frilipplnes; , The Government, its poltical subdivisions end Instrumentalives; Foreign, ne union Peta LaF (AON yepsroe é Ph) Se San Beda College of Lay they foes Selle ot ay CR PASCUA Ai AON! PURPOSES 4. Te enenurage poopie 10 depos in banking Inston; and 2, To aisccumays private hoarding 0 that aniea may tend puch Fane atv asset in {ho economic favelopmant of i» country. GOVERAGE ALL DEPOSITS of whataver nature with banks ct banking Insitutions nthe Phillpplnes, Irchrdig Inveriments In BG NOS fs9u0d by the Govemment af the Plsiippines, police! subdivisions and Re Instrumerstaives (Seo 2 PALA). +> Moncy-market placemant is NOT covered. by RA 1408 beeauss it Ie not deposited In tha benk, Prohitiind Acts 4. Examira’ion and Inquley ot tno'dng tato alt deposits, ot wnatever nature, with the banks i the Philippines Including Investments in honda leaued by the Goverame 4. Any disclosure by any alfciat of amployee of ny. banking Inslituion to any naulnstlzed perton of any Information ‘concsming tha asid deposits, GENERAL RULE The depoats coverod ty law are considered a0 of an absolutely confidont'al aature ard ray not bo examined, inquired ot looked lato by Bhy person, gevornimantal buriau, or office, EXCLPTIONS mm R.A. NO, 1405 (3108) Upon” writlen permigsion of the depostor, 2," Itonses of Impecchmant, 3. ‘Upon ofder of @ competent cue tn anos ©, bribery of dereliotion of duty ‘ot publle oftrints; 4+ For purpnses of RA 1403, the subjoct Poatior of the tigation cannot ts. Wmlad to bank accrunts under the name 2! defendant alone, tut must Include those accounts to’ which the Imeney patprtedy aod legate ot a portien. the: eof was allugad to have ban transferred, Pluscer belig thus Anniegous to bribary: the oxcopion to RA 1405 applicable in caves of tvibary must iso apply to cases of MEMORY AID IN COMMERCIAL LAW 249, phneter.. (Blorsita. v. Sandlyanbayns GR Nos, 15720495, Novembar 30, 2008) 4. Upon the ordot of a compotary sour In casen “vhoro the mone} iqposited or Invested, Is the gubject matter of the iiaation (Soe. 2): B. From Othor Laws 4. AnthGraft and Cormupt Practices Ast = Upon the order of a aampatent ctu of (lbunal In cases. Invalving lunexplalned wealth under the ranti- Grol ancl Corrupt Pracilces Act (R.A, No, 9049), Fhe AntiGrat Law ts Intonded to amend RA 1406 Ly providing an ‘additional exception to the rule against lhe disclosure of bank deposits (PNM v, Gnncayea, No. l10349, Sapte mbar 39, 1965), Gosos of unoxplained wealth ore aimiat to canon of rlbery ane dleralilion of duly and thorn is. 0¢: reason why there. two classes ut snses cannot be oxcepted from tho fujg— mmnking bank deposits confidential, The polley an 9 ono ceanhot be different from the policy an to tha othar, Inquiry Into tlegaliy required property extends to cases ‘whore. such proparty Is concaold by tealng hold by or recorded in the name 2, WALSH PSSM Musioner ufty SePlatet Blo oMliimronartt or akogetvatver aha inquire. Into tho UR of tho taxpayer (kb, 679, NIRA), «284 |2009 CENTRALIZED BAR OPERATIONS 3 AMLA.- Inquiry ar examinatioa by the Anti Money Laundering Cosndit (AMLC) upon ‘rder of any cumipolont court In cases of Wlolation of the dinti-Monoy Laundering Law, if there Is probable cauige thar te slopdsits or invesinients are related to an ‘uniawful activity of @ money ‘aundering offense, EXCEPT that no court ordar shal 6 rejulred In iw following uniawius activites: 8. Kidnapping for ransom unde’ set, 267 RPC ©. Vioiationg of the Comprehensive Dangucous Druys Act of 2002 (Soos, 486.9, 8 19, 42, 18. 14, 15, ond 16 RANG, 9155, © Hijacking end other vio.stions under RA. 6238; Dashuctive arson and murcer under RPO. Inchicing those porpuiratud by lertatists against nenccmdatant persong und sinllar targets (Soe. 14, RA, No. 9460 as amunded by Sue 6 Of RA Yi94}, Disclosure to the Treasunr of tho Philfopines of demant deposits fo: at least 1G Years under the Unclaimed Ealances Act (Sno. 2, Aoi No, 3930) ° Documents, timoivo 8. Aquino, 2006, 27 Edition), Gunoral Banking Law of 2000 (RA. No, S751): 1. No benk shall employ casual of non: regular pertonnel or too. lengthy probatlant.y aarsonnel In the conduct of ls business lnvatving bank dog sits (See. 55.4). 2. No ‘director, oticer, employee, or ‘gent of any bank shal, without court sider, disclosy to any unautorizes eigon any lnformation relative io Nhe funds cr properties In the custody af {he bank. ‘beloiiging to” privaty individuals, cerporations, oF any cthor nly” Brevidad, that witn'reapect to Danke dapcaie, the “provielone. ef existing Kav hall provall (Soe. 28.1 % Quleourcing of nnerent vane functions, How Connral Bank Act (R.A, No, 765%) 4, DOSRI loans; ang 2, Pariodic and special exantinationa hy the DSP (Sue. 26); + Another exception is the examination eu Weds College of Mary OVHER LAWS RELATING TO SECKECY OF BANK DEPOSITS A. Forslgn Curroney Lieposit Act (3.1. No, made by an independent auditor hired by the bank to conduct its regular Suc provided that the exarrination is 6426): Fixlends contidentialty to foreign Cuttenny deposits, but tha FCDA contains aly ona ground wutincizing exeminstion. upon WRITTEN CONSENT of the Yepasitor, “intengan v, Court uf Appoals, GR No, 120995, Fesmuory 18, 2002). + Acu-payee in a chack daposted in a bank Ie lkewiso a se-depositor theroct; no writen consent othe olor co-payi Ta necessitated jn an Inquiry of the duposite by. tha. aid con Sepasitor (Ching Wunklag Corporation ¥, Cour of Apoadls, GRNo. 140637, Dovemor 18, 20:05), Anotha: exemption iy provises for wider tho AMLA, whicit is upon order of tne court o7 aven without court erdar in proper sases when thera Is probable causa of Manay launwenny at provided undir Sec, 11 thereof, Thus, as things’ naw «land, theta ure YWO EXCEPTIONS an thy recy of forwlyn currency deposits (Notes and Cases oy anks, Negetubla inetrumants ~ eid Other Coninere’at for audit purpuses only ang the results thereof shall by for the exclusive ut ‘of thy bank (Miurquez v. Dusiono, Gi No, 476882, June $7, 2901; Citing Unlon Blank of the Philppings vs. CA). TaD itor as an wats find bash Er, Buin ep Teach of exacuton 10 satisty a “final JudgMent. its purpose is fons Meda College of Lewy moroly to tecuré Information a2 10 die nawno ef the depositor and wether 91 ol the dofendant had a depoalt in acid bank, oniy fo Pumosos of camniahennat, Any discinnurn is Purely Incléental to tne evrcution proczas (China Banking Ca.oeniion v, Onapn Ko 1-24964, January 31, 1973) ‘The amount of depnall Is actually net diselound and the inter’ of the fegisinture des not cover gamighment (Patippine Comm:rsial nc Industrial Bor x, ata, v. Tha Hon, Court of ‘Appeals, of al, GR No, 04528, January 2N, 1991), ReQuigiren for INC AMSRA INSPECTION OF GANK DEPOSITS 4, Ponding case Satore a court of competent Jislodtetians 2: Accouat must by etearly idnatifind: 3.

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