Banking Laws Prohibitions

THE AWESOME NOTES
Page 1 of 40
BANKING LAWS
FISCAL TAMBASACAN
I. GENERAL BANKING LAW

(RA 8791)

PROHIBITED SERVICES

A. DEFINITION OF BANKS
SEC. 54
PROHIBITED TO ACT AS INSURER
- a bank shall not directly engaged in
• entities engaged in the lending of funds

obtained in the form of deposits.
insurance business as the insurer
SEC. 55

B. BANKING SERVICES
SEC. 53

PROHIBITED SERVICES
NO DIRECTOR, OFFICER, EMPLOYEE OR

A bank may perform the ff activities:
1. receive in custody funds, documents and
valuable objects;

AGENT OF ANY BANK SHALL:
• make any false entries in any bank report

2. act as a financial agent and buy and sell, statement or
by order of and for the account of their participate in any fraudulent transaction,
customers, shares, evidences of thereby affecting the financial interest
indebtedness and all type of securities; of,or causing damage to, the bank or
3. make collection and payments for the any person;
accounts of others and perform such, other • without order of court of competent
services for their customers as are not jurisdiction
incompatible with banking business DISCLOSE
4. upon prior approval of the MB, as to any authorized person any
managing agent, adviser, consultant or information relative to the funds or
investment management/advisory/ properties in the custody of the bank
consultancy account; and belonging to private individual,
corporation or any other entity.

5. rent out safety deposit boxes.
*** it shall keep the funds, securities and other

PROVIDED
that with respect to bank deposits, the
effects which it receives provisions of existing laws shall
duly separate from the bank's own prevail.
• accepts
assets and liabilities
RELATIONSHIP CREATED BETWEEN BANK

gifts, fees, or commissions or any
other form of remuneration
IN CONNECTION WITH
AND DEPOSITOR - the approval of lain or other
SERRANO VS. CA 96 SCRA 96 credit accommodation from
- creditor and debtor relationship established said bank
with the bank as debtor and the depositor as
• overvalue or aid in overvaluing

creditor
NATURE OF RELATIONSHIP
any security
FOR THE PURPOSE OF
influencing in any way the
PBCOM VS CA 269 SCRA 695 actions of the bank or any
- fiduciary in nature bank
FIDUCIARY • outsource
- one assumes to ac as an agent for INHERENT
another
and the other repose
confidence in him,
banking functions
although there is no
written contract or no

contract at all.
f f t h e fi d u c i a r y n a t u r e o f
relationship; DILIGENCE REQUIRED
- highest degree of care is required,
not merely DOAGFOAF

prepared by: ronie ablan
THE AWESOME NOTES Page 2 of 40
BANKING LAWS
FISCAL TAMBASACAN

NO BORROWER OF A BANK SHALL in the conduct of its business involving
bank deposits
• FRAUDULENTLY OVERVALUE
property offered as a security for a (consistent with Bank Secrecy law)
loan or other credit accommodation

from the bank
• FURNISH FALSE, OR MAK

C. CLASSES OF BANKS
SEC. 3
MISREPRESENTATION OR SUPPRESSION 1. universal banks
OF 2. commercial banks
material facts 3. thrift banks, composed of (i) savings and
for the purpose of obtaining, renewing mortgaged banks, (ii) stock savings and
or increasing a loan or other credit loan associations, and (iii) private
accommodation or extend the period development banks
thereof. 4. rural banks
• ATTEMPT TO DEFRAUD 5. cooperative banks
said bank 6. islamic banks
in the event of a court action to recover 7. other classifications of banks as determined
• OFFER
a loan or other credit accommodation;
or by the MB of BSP
any director, officer, agent or employee

of a bank
any gift, fee, commission, or
any other form of
compensation
in order to influence
such person into
approving a loan or
other credit
accommodation
NO
application.
- examiner, officer or employee of the BSP; or

- any department, bureau, office and or agency
of the government
that is assigned to supervise, examine,
assist, or render technical assistance
to any bank
= SHALL COMMIT
any of the ff acts enumerated in this
section or aid in the commission of the

same.
THE MAKING OF FALSE REPORTS

O R M I S R E P R E S E N TAT I O N O R
S U P P R E S S I O N O F M AT E R I A L
FACTS
BY: personnel of BSP
shall constitute fraud
and shall be subject to the
administrative and criminal
sanctions provided under the

NO BANK
NCBA.
- shall employ casual and non-regular

personnel or too lengthy probationary
personnel

BANKING LAWS
FISCAL TAMBASACAN
IN RE:
INVESTMENT
EQUITY
IN
IN RE:
INVESTMENT
EQUITY
IN
UNIVERSAL COMMERCIAL

FINANCIAL ALLIED FINANCIAL ALLIED
ENTERPRISES ENTERPRISES
BANKS BANKS
I. can own up to 100% of the I. can own up to 100% of the
equity in a equity in a

- thrift bank - thrift bank
AS TO THEIR POWERS AS TO THEIR POWERS

- rural bank; or - rural bank; or
1. has all the powers in addition to the general - financial allied enterprises
granted to commercial powers incident to II. if on other financial allied
banks corporations II. a publicly-listed universal enterprise, including other
2. power of an investment - all such powers as may be or commercial bank may commercial bank
house as provided in necessary to carry on the own - such investment shall
existing laws and business of commercial up to 100% remain a MINORITY

3. power to invest in non- banking, such as - of the voting stock of only HOLDING in that enterprise
allied enterprises 1. accepting drafts one other UB or CB
2. issuing letters of credit
CORPORATE POWERS 3. discounting and
1. to adopt, alter and use a negotiating promissory IN RE: EQUITY IN RE: EQUITY
corporate seal, which shall notes, drafts, bills of INVESTMENT IN NON- INVESTMENT IN NON-

be judicially noticed exchange and other FINANCIAL ALLIED FINANCIAL ALLIED
2. to enter into contracts evidence of debts ENTERPRISE ENTERPRISE
3. to lease or own real and 4, accepting or creating
personal property, and to demand deposits may own up to 100% may own up to 100%
sell or otherwise dispose the 5. receiving other types of - of the equity of NFAE - of the equity of NFAE
same. deposits and deposit
4. to sue and be sued substitute
5. perform any and all things 6. buying and selling foreign
that may be necessary or exchange and gold and IN RE: EQUITY N/A

proper to carry out the silver bullion

INVESTMENT IN NON-
purpose 7. acquiring marketable ALLIED ENTERPRISE
bonds and other debt
securities; and the equity investment of a
8. extending credit subject to UB or of its wholly or

such rules as the MB may majority owned subsidiaries
promulgate - in a single non-allied
enterprise
***such rules may include SHALL NOT EXCEED 35%
the determination of bonds OF THE
and other debt securities - total equity in that
eligible for investment, the enterprise nor
maturities and the aggregate - voting stock in that
amount of such investment. enterprise

AS TO THEIR EQUITY
INVESTMENT

AS TO THEIR EQUITY
INVESTMENT
IN RE: EQUITY

same.

INVESTMENT IN QUASI
BANK ***QUASI-BANKS
I. the total investment in ~ cannot invest in non-allied - entities engaged in the
equities, allied and non- enterprises to promote competitive 1. borrowing of funds
allied enterprises ~ can invest only to allied c o n d i t i o n s i n fi n a n c i a l through the issuance,
- SHALL NOT EXCEED enterprises, financial or non- markets, the MB may endorsement or assignment

50% of the net worth of the financial (exe as the MB - further limit to 40% equity with recourse; or
bank may otherwise provide) investmnt of UB in quasi- 2. acceptance of deposit
banks substitutes
II. the equity investment in I. the total investment in for the purpose of relending
any one enterprise, whether equities of allied enterprises

or purchasing of receivables
allied or non-allied - SHALL NOT EXCEED and other obligations

- SHALL NOT EXCEED 35% of the net worth of the

25% of the net worth of the bank ***DEPOSIT SUBSTITUTES
bank - are alternative form of
II. the total investment in any obtaining funds from the
***NET WORTH one enterprise public, other than deposits
- the total of the unimpaired - SHALL NOT EXCEED THROUGH

paid-in capital including the 25% of the net worth of the the issuance, endorsement,
paid-in surplus, retained bank or acceptance of debt
earnings and undivided instruments for he
p r o fi t , n e t o f v a l u a t i o n borrower's own account
reserves and other FOR THE PURPOSE OF

adjustments as may be relending or purchasing of
required by the BSP.

receivables and other
obligations
*** the acquisition of such
equity/ies this may include
- is subject to the approval of - banker's acceptance,
the MB promissory notes,
which shall promulgate participations, certificates of
appropriate guidelines to assignment and similar
govern such investment

instruments with recourse
and repurchase agreements.
***WITH RECOURSE
- term used in indorsing
negotiable instruments
by which the indorse
indicates that he remains
liable for payment of the
instrument.

BANKING LAWS
FISCAL TAMBASACAN

BANKING LAWS
FISCAL TAMBASACAN
D. ACQUISITION OF REALTY; RULE AND property, included on its total capital

EXE

account, does not exceed 50%...
SEC. 51: Ceiling on Investment in Certain

Assets
any bank may acquire real estate

UNION BANK VS, TIU (SEPT 7, 2011)
as shall be necessary for its own use

PROVIDED HOWEVER
- that the total investment in such real
estate and improvements thereof
including bank equipments
SHALL NOT EXCEED
50% of combined capital
accounts
PROVIDED FURTHER
- that the equity investment of bank in
another corporation engaged primarily
in real estate
SHALL BE CONSIDERED
- as part of the bank's total
investment in real estate
UNLESS:
otherwise provided by
the MB.
SEC. 52; Acquisition of real estate by way

of satisfaction of claims
NOTWITHSTANDING the limitations of the
preceding sec
A BANK MAY ACQUIRE, HOLD OR CONVEY
REAL PROPERTY UNDER THE FF
CIRCUMSTANCES
1. such as shall be, mortgaged to it in gf by
way of security for debts
2. such as shall be conveyed to it in
satisfaction of debts previously contracted
in the course of its dealings; or
3. such as it shall purchase at sales under
judgments, decrees, mortgages, or trust
deeds held by it and such as it shall

purchase to sure debts due it.
ANY REAL PROPERTY ACQUIRED

IN ANY OF THE ABOVE
ENUMERATED CIRCUMSTANCES
- shall be disposed of by the bank
WITHIN A PERIOD OF 5
YEARS
OR AS M AY BE
PRESCRIBED BY THE MB
PROVIDED HOWEVER;
- that the bank may, after said period,
continue to hold the property for it's
own use, subject to the limitations of

the preceding section.
NOTES:
meaning, even though 5 years had
lapse, the bank may still hold the real
estate, provided that that such real
BANKING LAWS
FISCAL TAMBASACAN

E. BSP FUNCTIONS SEC. 5: POLICY DIRECTION,
R AT I O S , C E I L I N G S A N D
SEC. 4: SUPERVISORY FUNCTIONS

SHALL INCLUDE
LIMITATIONS
BSP SHALL PROVIDE POLICY

• the issuance of rules of conduct or DIRECTIONS
the establishment of standards of - in areas of
operation for uniform application to 1. money
all institutions or functions covered, 2. banking; and
taking into consideration the
- distinctive character of the
operations of institutions; and

3. credit
FOR THIS PURPOSE

- the substantive similarities of - the MB may prescribe
specific functions to which ratio, ceilings, limitations, or
such rules, modes or other forms of regulations
standards are to be applied. ON
• the conduct of examination - different types of
to determine accounts and
- compliance with laws and - practices of banks
regulations and quasi banks
if the circumstances to the extent feasible,
so warrant as conform to internationally
determined by the MB accepted standards, including
• overseeing the Bank International
to ascertain Settlements.
- that the laws and regulations - MB may exempt particular categories
are complied with of transaction
• regular investigation from such ratio, ceilings and
which shall not be oftener than limitations
- once a year BUT NOT LIMITED TO
from the last date of 1. exceptional cases; or
examination 2. to enable a bank or quasi
to determine whether an bank under rehabilitation
institution is conducting its during a merger or
business on a safe and sound consolidation
basis. = to continue in business with
PROVIDED safety to its creditors,
t h a t t h e d e fi c i e n c i e s /
irregularities found by or
discovered by an audit

depositors and general public.
shall be immediately
addressed
• inquiring
into the solvency and liquidity
of the institution
• enforcing
prompt corrective action
***ENTITIES COVERED
- aside from banks, BSP's regulatory
and supervisory power extends to the
ff entities
1. quasi-banks
2. trust entities
3. other financial institutions which
under special laws are subject to

the BSP

BANKING LAWS
FISCAL TAMBASACAN

F. ORGANIZATION OF BANKS
SEC. 8: Requisites for organization of

SEC. 9: ISSUANCE OF STOCK
THE MB MAY PRESCRIBE RULES
AND REGULATIONS
banks and quasi banks 1. on the types of stock a bank may issue
1. that the entity is a stock corporation 2. including the terms thereof; and
2. that its funds are obtained from the public, 3. the rights appurtenant thereto
which shall mean 20 or more persons TO DETERMINE
3. that the minimum capital requirements - compliance with laws and regulations
prescribed by the monetary board for each governing capital and equity structure
category of banks are satisfied of bank
PLUS: PROVIDED:
1. must be registered with the SEC (SEC14) bank shall issue ONLY
REQ:
the AOI and By-Laws must be
- par value stock
accompanied by
- certificate of authority, stating
compliance of all the requisites issued

SEC. 10: TREASURY STOCKS
NO BANK SHALL
by the Mb of the BSO 1. purchase or acquire shares of its own
2. incorporate in the application capital stock; or
• bank's ownership structure 2. accept its own shares as a security for a
• directors and senior loan
• management EXE:
• its operating plan; and - when authorized by the MB
• internal control PROVIDED:
• as well as its projected financial condition that in every case the stock so
and capital base.
SEC. 14: REQUISITES FOR

purchased or acquired shall
- WITHIN 6 MOS
from the time of its purchase
REGISTRATION OF AOI OR ANY or acquisition,
AMENDMENT THERETO be sold or disposed of
MUST BE ACCOMPANIED BY at a public or private
- certificate of authority issued by the

MB, under seal sale
REQ: FOR THE ISSUANCE OF

CERTIFICATE OF AUTHORITY

SEC. 11: FOREIGN STOCK HOLDINGS
foreign individuals and non-bank corporations

after the MB is satisfied from the MAY OWN OR CONTROL
evidence submitted to it that UP TO 40%
1. all requirement of existing laws - of the voting stock of a domestic
and regulations to engage in the
business for which the applicant is
proposed to be incorporated have
bank
***this rules shall apply to all Filipinos and

been complied with
2. the public interest and economic
conditions, both general and local,

domestic non-bank corporations
THE PERCENTAGE OF FOREIGN-OWNED

justify the authorization; and VOTING STOCK IN A BANK SHALL BE
3. that the amount of capital, the DETERMINED
financing organization, direction - by the citizenship of the individual stock-
and administration, as well as the
integrity and responsibility of the
organizers and administrators

holders in that bank
***the citizenship of the corporation

reasonably assure the safety of which is a SH in a bank
deposits and public interest.
REQ: FOR REGISTRATION OF BY-

- shall ff the citizenship of the
controlling SH of the corporation
irrespective of the place of
L AW S O R A N Y A M E N D M E N T
THERETO
- must be also accompanied by
incorporation.
certificate of authority from BSP 

BANKING LAWS
FISCAL TAMBASACAN
SEC. 12: STOCKHOLDINGS IF FAMILY

GROUPS OR RELATED INTEREST
SEC. 16: FIT AND PROPER RULE
RATION:
FAMILY GROUPS OR RELATED INTERESTS 1. t o m a i n t a i n t h e q u a l i t y o f b a n k
- individuals related to each other management; and
WITHIN 2. afford better protection to depositors and

4th degree of consanguinity or affinity,
legitimate or common-law the public in general
FIT AND PROPER RULE

T H E S T O C K H O L D I N G S O F FA M I LY The MB shall prescribe, pass upon and review
GROUPS OR RELATED INTERESTS the
- must be fully disclosed in all transactions 1. qualifications and disqualifications of

by such an individual with the bank individuals elected or appointed bank
directors or officers; and
NOTES:
if the family groups or related interests
transact with a bank which they belong

2. disqualify those found unfit
SHOULD MB FINDS A DIRECTOR

to OR OFFICER
--- the law only requires full disclosure - commits or omits an act which render

of such transaction
RELATED INTEREST
him unfit
AFTER DUE NOTICE
- MB may disqualify, suspend
- two or more corporations owned or
controlled by the same family group or or remove him
same group of persons
SEC. 13: CORPORATE STOCKHOLDINGS

MEASURE: IN DETERMINING
WHETHER THE DIRECTOR OR
OFFICER IS FIT

--- same sa related interest mentioned above. shall consider the ff:
1. integrity

SEC. 15: BOARD OF DIRECTORS
THERE MUST BE
2. experience
3. education
4. training; and
- at least 5, but not more than 15

- 2 of whom must be an independent director 5. competence.
SEC. 17: DIRECTORS OF MERGED OR

***INDEPENDENT DIRECTOR CONSOLIDATED BANKS
- a person other than an officer or BASTA: the numbers of directors shall NOT

employee of the bank, its subsidiaries
or affiliates or related interest
EXCEED 20.
NON-FILIPINO CITIZEN MAY BECOME A

MEMBER OF THE BOD
- to the extent of he foreign participation in the

equity of said bank.
MEETINGS OF BOD; MANNER

- allowed; through modern technologies, such

as; tele-conferencing and video-conferencing.

BANKING LAWS
FISCAL TAMBASACAN

SEC. 18: COMPENSATION
MB MAY REGULATE (to protect the funds of

SEC. 20: BANK BRANCHES
UB AND CB MAY OPEN BRANCHES OR

the creditors and depositors) OTHER OFFICES
the payment by the bank to its directors and - within or outside the PHL
officers of REQ:
1. compensation
2. allowance
3. fees
prior approval of the BSP
BRANCHING BY ALL OTHER BANKS

4. bonuses
5. stock options
6. profit sharing; and

- shall be governed by pertinent laws
A BANK, subject to prior approval of he MB,

7. fringe benefits
BUT ONLY IN EXCEPTIONAL CASES

USE ANY OR ALLOF ITS BRANCHES AS
• outlet for the presentation and/or sale of the
financial product
AND WHEN THE CIRCUMSTANCES = of its allied undertaking or of its investment
WARRANTS
such as but not limited to the ff:
1. w h e n t h e b a n k i s u n d e r

house units
A BANK AUTHORIZED TO ESTABLISH

comptrollership or conservatorship BRANCHES OR OTHER OFFICE
2. when the bank is found by the MB SHALL BE RESPONSIBLE
to be conducting business in an - for all business conducted in such
unsafe or unsound manner; or branches and offices
3. when a bank is found by the MB to TO THE SAME EXTENT AND
be in an unsatisfactory financial IN THE SAME MANNER
condition. - as though such business had

all been conducted in the head
SEC. 19: PROHIBITION OF PUBLIC

OFFICIALS office
*** a bank and its branches and offices

GEN RULE shall be treated
no appointive or elective public officials,
whether full-time or part-time,
- as one unit
EXE:
shall, at the same time serve as officer
of any private bank
SEC. 21: BANKING DAYS AND HOURS
GEN RULE
1. when such service is incidental to financial all banks including their branches and offices
assistance provided by the government or shall transact business
gocc to the bank; or • on all working days
2. unless otherwise provided under existing
law (Rural Banks RA 7353) 
• for at least 6 hours a day
EXE:
• may open for business on Sun, Sat, or
Holidays, for at least 3 hrs
PROVIDED
- shall report to the BSP during which
they or heir branches or offices shall
transact business;or
• if authorized by the BSP in the interest of the
banking public
***WORKING DAYS
- mon to friday, unless if such days are
holidays. 

BANKING LAWS
FISCAL TAMBASACAN
G. LOAN LIMITATIONS; SBL; DOSRI;

SECURITY; FORECLOSURE
THE PRESCRIBE CEILING SHALL INCLUDE
1. direct liability of the

SEC. 35: LIMITS ON LOANS, CREDIT - maker or acceptor of paper,

ACCOMMODATIONS AND GUARANTEES discounted with or sold to such bank;
and

SINGLE BORROWER LIMIT
GEN RULE:
- of general indorser, drawer, or guarantor,
who obtains the loan or other credit
accommodation from, or discounted
THE LIMIT; loans and credit accommodations paper with, or sells paper to such bank
and guarantees that may be extended to any 2. in case of an individual
persons, partnership, association, corporation who owns or control a majority interest
or any entity in a corporation, partnership or
SHALL NOT EXCEED association or any other entity
25% of the net worth of such bank the liability of said entity to
EXE: such bank.
as MB may prescribe for the reasons of 3. in case of corporation,

national interest
***BASIS IN DETERMINING
all liabilities to such bank of all
subsidiaries in which such corporation
owns or controls a majority interest
COMPLIANCE WITH SBL 4. in case of partnership, association or other
- is the total credit commitment of the entity,

bank to the borrower.
***NET WORTH
the liabilities of the members thereof to
such bank.
the total of the unimpaired paid-in NOTE:

capital including the paid-in surplus, even if a parent corp, part, assoc,
retained earnings and undivided profit, entity or individual
net of valuation reserves and other - who owns or control a majority
adjustments as may be required by the interest in such entities

BSP.
REQ: WHEN IT MAY BE INCREASED BY

- has no liability to the Bank,
THE MB MAY PRESCRIBE THE
COMBINATION OF THE LIABILITIES
ADDITIONAL 10% OF SUBSIDIARY CORPORATIONS
- as may be prescribed by the MB OR MEMBERS OF THE
PROVIDED: PARTNERSHIPS, ASSOCIATION,
the additional liabilities if any borrower ENTITY OR SUCH INDIVIDUAL
are adequately secured by under certain circumstances, including
1. trust receipts but not limited to any of the ff
2. shipping documents situations:
3. warehouse receipts; or 1. parent corp, part, assoc, entity of
4. o t h e r s i m i l a r d o c u m e n t s individual
transferring or securing title - guarantees the repayment of he
covering: liabilities
- readily marketable, non- 2. the liabilities were incurred
perishable goods - for accommodation of the parent corp
- which must be fully covered or subsidiary or of a PAEI; or
by insurance. 3. the subsidiaries, through separate

entities
- operate merely as departments or

divisions of a single entity

BANKING LAWS
FISCAL TAMBASACAN
LOANS, OTHER
ACCOMMODATIONS AND GUARANTEES
CREDIT
SHALL EXCLUDE
1. loans and other credit accommodations
secured by obligations of the BSP or of the
Phil Govt
fully guaranteed by the government as to
the payment of the principal and interest
covered by assignment of deposits
maintained in the lending bank and held in
the phil.
4. l o a n s , c r e d i t a c c o m m o d a t i o n s a n d
acceptances under letters of credit to he
extent covered by margin deposits; and
5. other loans or credit accommodations
which the MB may from time to time,
specify as non-risk items
BUT SHALL INCLUDE (AS TO THE LIMIT)

- loans and other credit accommodations,
deposits
maintained with and usual guarantees
by a bank to any other bank or non-

bank entity, whether locally or abroad.
NOTE:
certain types of contingent accounts of
borrower may be included among
subject to these prescribed limits

- as may be determined by the MB.

BANKING LAWS
FISCAL TAMBASACAN

DOSRI/INSIDER LENDING
SEC. 36: RESTRICTION ON BANK LIMIT OF THE OUTSTANDING LOANS,
EXPOSURE TO DIRECTORS, OFFICERS, C R E D I T A C C O M M O D AT I O N S A N D

SH AND THEIR RELATED INTERESTS
NO DIRECTOR OR OFFICER OF ANY BANK

G U A R A N T E E S W H I C H A B A N K M AY
EXTEND TO EACH OF ITS DOSRI
shall be limited
SHALL DIRECTLY OR INDIRECTLY by the amount equivalent to their respective
- for himself or as a representative or agent of 1. unencumbered deposits and
others, 2. book value of their paid-in capital
1. borrow from such bank
2. become a guarantor, indorser or surety for
loans from such bank to others; or

contribution in the bank.
BUT SHALL EXLUDE FROM SUCH

3. in any manner be an obligor or incur any LIMIT
contractual liability to the bank - loans, credit accommodations and
EXE: (REQ) guarantees secured by assets
1. with written approval of the majority of all considered as non-risk by the MB
the directors of said bank AND SHALL NOT BE SUBJECT TO
2. written approval shall be entered upon the INDIVIDUAL LIMIT
record of the bank - if extended to DOSRI in accordance
3. copy of such entry shall be transmitted with its Fringe Benefit Plan, duly
forthwith to the appropriate supervising and
examining department of the BSP.
EXE TO EXE:

approved by the MB.
NOTE: LIMIT SHALL NOT APPLY TO

written approval of the majority of the - to those extended by cooperative bank to is
dir shall not be required
- when the loan, credit
accommodations or advances made to

cooperative shareholders.
GIST: WHEN LIMITS SHALL NOT

the officer APPLY
is made pursuant to its fringe 1. secured by assets considered as
benefit plan non-risk by the MB
approved by the BSP.
ADD REQ: ASIDE FROM WRITTEN

2. in the form of fringe benefits
granted in accordance with rules
as may be prescribed by the MB;
APPROVAL (IGGY'S BOOK) 3. extended by a cooperative bank to
1. the dealing if a bank with any of its DOSRI its cooperative sh. 
shall be upon such terms not less favorable
to the bank than those offered to others
2. the DOSRI borrower must waive the
secrecy of his or her deposits of whatever
nature in all banks in the Phil

3. the ceiling/limitations
NATURE OF BANK DEALING WITH DOSRI

- shall be upon terms
NOT LESS favorable to the bank
than those offered to others
CONSEQUENCE OF VIOLATION
- the office if any bank director or officer who
violates this shall be declared vacant; and
- the officer or director shall be subject to he
penal provisions of NCBA.
REQ:
after due notice to the BOD of the
bank

BANKING LAWS
FISCAL TAMBASACAN
***RELATED INTERESTS SEC. 37: LOANS AND OTHER CREDIT

(BSP CIRC NO. 170) A C C O M M O D AT I O N S A G A I N S T R E A L
1. spouse or relative within the first degree of
consanguinity or affinity or relative by legal
ESTATE
LIMIT

adoption, of a director, officer or sh of the
bank SHALL NOT EXCEED
2. partnership of which a DOS or his souse or • 75% of the appraised value of the real
relative within first degree of consanguinity estate security
of affinity, or relative by legal adoption, is • plus; 60% of the appraised value of the
general partner insured improvements
3. co-owner with the DOS or his SRw/1stca/ AND SUCH LOANS MAY BE MADE
Rla, of the property or interest or right TO THE
mortgaged, pledged or assigned to secure - owner of the real estate; or
the loan or credit accommodations, EXE
when the mortgage, pledge or assignment - to his assignees
covers only said co-owner's undivided

interest
4. corporations, associations, or firm of which
a DO of the bank or his spouse is also a
DO of such corporation, assoc or firm
EXE:
a. where the securities of such
corporations, assoc or firm are
listed and traded in the big board
or commercial and industrial board
of domestic stock exchange, less
than 50% of the voting stocks
thereof is owned by any one
person or by persons related to
each other within 3rd degree of
consanguinity or affinity
b. where the DOS of he lending bank
sits as a representative of the
bank in the BOD of such
corporation. PROVIDED; that the
bank representative shall not have
any equity interest in the borrower
corporation, EXE for the minimum
shares required by law,rules and
regulations, or by the by-laws of
the corporation. PROVIDED
FURTHER, that the borrowing
corporation under (a) or (b) is not
among those mentioned in item
(5) and (6) hereof
5. Corporations, assoc or firm of which any or
group if DOS of the lending bank and/or their
SRw/1stca/Rla holds/owns more than 20% of
the subscribed capital of such corporation, or
of the equity of such assoc or firm
6. corp, assoc, or firm, wholly or majority-
owned or controlled b any related entity or a
group of related entities mentioned in item (2),

(4), and (5) hereof.

BANKING LAWS
FISCAL TAMBASACAN
SEC. 47: FORECLOSURE OF REAL ESTATE SHOULD THE MORTGAGOR IS A JURIDICAL

MORTGAGE
in the event of foreclosure,

PERSON (Act. 3135)
- whose property is being sold pursuant to an
extra-judicial foreclosure
- whether judicially or extrajudicially, MAY REDEEM THE PROPERTY
- of any mortgage on real estate which is
security for any loan or other credit
accommodation granted
FORECLOSED
TIMEFRAME
THE MORTGAGOR OR DEBTOR SHALL - not after the registration of the
HAVE THE RIGHT TO REDEEM THE certificate of foreclosure sale with he
PROPERTY applicable Register of Deeds
whose real property has been sold for - which in no case shall be more than
the full or partial payment of his 3 mos after foreclosure,
obligation
TIMEFRAME
= whichever is earlier 
- within 1 yr after the sale of the real

estate
HOW EXERCISED
by paying the
1. amount due under the mortgage
deed,
2. with interest thereon, at the rate
specified in the mortgage; and
3. all costs and expenses incurred by
the bank or institution from the
sale and custody of said property
LESS:
the income derived therefrom
RIGHTS OF THE PURCHASER IN THE

AUCTION SALE, whether judicially or
extrajudicially
1. to enter upon and take possession of such
property immediately after the date of the
confirmation of the auction sale; and
2. administer the same in accordance with
law.
NOTE:
any petition in court to enjoin the foreclosure
proceedings instituted
SHALL BE GIVEN DUE COURSE ONLY
- upon the filing by the petitioner of a bond
- in an amount fixed by the court
- conditioned that he will pay all damages
which the bank may suffer by the enjoining or

the restraint of the foreclosure proceedings

BANKING LAWS
FISCAL TAMBASACAN
CONSERVATORSHIP RECEIVERSHIP

BANKING LAWS
FISCAL TAMBASACAN
II. NEW CENTRAL BANK ACT 3. If the member is guilty of acts or operations
which are of fraudulent or illegal character
(RA 7653)
or which are manifestly opposed to the
aims and interests of the Bangko Sentral;
or

A. BSP FUNCTIONS
SEC. 3
4. If the member no longer possesses the
qualifications specified in Section 8 of this
1. provide policy directions in the areas of
money, banking, and credit.
Act.
2. supervision over the operations of banks

3. regulatory powers as provided in this Act

SEC. 9: DISQUALIFICATIONS
• a member of the Monetary Board is

and other pertinent laws over the disqualified from being
operations of a director, officer, employee, consultant,
• finance companies and lawyer, agent or stockholder of any
• n o n - b a n k fi n a n c i a l i n s t i t u t i o n s - bank,
performing quasi-banking functions, - quasi-bank or
hereafter referred to as quasi-banks, and - any other institution which is subject to
• institutions performing similar functions.
PRIMARY OBJECTIVE OF BSP

supervision or examination by the

Bangko Sentral,
1. to maintain price stability conducive to a IN SUCH INSTANCE member shall

balanced and sustainable growth of the 1. resign from, and
economy. 2. divest himself of any and all
2. to promote and maintain monetary stability interests in such institution
and the convertibility of the peso. BEFORE assumption of office

as member of the Monetary
B. MONETARY BOARD; QUALIFICATIONS

AND DISQUALIFICATIONS Board.
• The members of the Monetary Board coming

SEC. 6: COMPOSITION OF THE MB
7 MEMBERS
from the private sector
SHALL NOT HOLD
any other public office or public
- appointed by the president

- for a term of 6 years.
employment during their tenure.
• No person shall be a member of the

SEC. 8: QUALIFICATIONS Monetary Board if
The members of the Monetary Board must be 1. he has been connected directly with
1. natural-born citizens of the Philippines, any multilateral banking or financial
2. at least thirty-five (35) years of age, with the institution; or
exception of the Governor who should at - has a substantial interest in any
least be forty (40) years of age, private bank in the Philippines,
3. of good moral character, of unquestionable WITHIN 1 YEAR
integrity, of known probity and patriotism,
and
4. with recognized competence in social and
prior to his appointment;
2. likewise, no member of the
economic disciplines.
SEC. 10: GROUNDS FOR REMOVAL

Monetary Board shall be employed in
any such institution
WITHIN 2 YEARS
The President may remove any member of the after the expiration of his term
Monetary Board for any of the following EXCEPT
reasons: when he serves as an
1. If the member is subsequently disqualified official representative of
under the provisions of Section 8 of this the Philippine Government
Act; or
2. If he is physically or mentally incapacitated
that he cannot properly discharge his duties
to such institution.
and responsibilities and such incapacity

has lasted for more than six (6) months; or

BANKING LAWS
FISCAL TAMBASACAN
C . C O N S E RVATO R S H I P AND SALARY OF THE CONSERVATOR

RECEIVERSHIP
SEC. 29: APPOINTMENT OF

fixed by the Monetary Board in an amount
NOT TO EXCEED
2/3 of the salary of the president of the

CONSERVATOR institution in one (1) year,
payable in twelve (12) equal
GROUNDS FOR PLACING BANKS AND
QUASI BANKS UNDER CONSERVATORSHIP
If after the MB finds, based on the report
monthly payments:
RULE: WHEN CONSERVATORSHIP IS

submitted by the appropriate supervising or TERMINATED BEFORE 1 YR PERIOD
examining department
that the bank or quasi bank is
in the state of continuing inability or

EXPIRES,
I. if on the ground that the institution can

unwillingness to maintain a condition operate on its own,
of liquidity, the conservator shall receive the
deemed adequate to protect balance of the remuneration
the interest of the depositors which he would have
and creditors
POWERS OF CONSERVATOR
received up to the end of
the year;
II. if the conservatorship is terminated
such powers as the Monetary Board shall on other grounds,
deem necessary to the conservator shall not be
1. take charge of the assets, liabilities, and entitled to such remaining
the management thereof,
2. reorganize the management,
3. collect all monies and debts due said
balance.
WHEN NOT ENTITLED TO

institution, and RENUMERATION
4. exercise all powers necessary to restore its when the conservator appointed by the
viability.
5. to overrule or revoke the actions of the
previous management and board of

MB is connected with the BSP
E X P E N S E S AT T E N D A N T T O T H E
directors of the bank or quasi-bank.
DUTIES OF THE CONSERVATOR

CONSERVATORSHIP; shall be borne by:

- the bank or quasi-bank concerned.
report and be responsible to the Monetary G R O U N D S F O R T E R M I N AT I O N O F

Board
QUALIFICATIONS OF THE CONSERVATOR.

CONSERVATORSHIP
The Monetary Board shall terminate the
conservatorship when it is satisfied that
should be competent and knowledgeable in 1. the institution can continue to operate on its

bank operations and management.
TERM OF THE CONSERVATORSHIP

own and the conservatorship is no longer
necessary; or
2. on the basis of the report of the conservator

shall not exceed one (1) year. or of its own findings, determine that the
continuance in business of the institution
would involve probable loss to its
depositors or creditors, in which case the
provisions of Section 30 shall apply.

BANKING LAWS
FISCAL TAMBASACAN
SEC. 30: PROCEEDINGS IN RECEIVERSHIP 4. determine as soon as possible, but not later

ANDLIQUIDATION
GROUNDS FOR PLACING BANKS AND

than ninety (90) days from take over,
whether the institution
• may be rehabilitated or otherwise

QUASI BANKS UNDER R AND L
Whenever, upon report of the head of the

• placed in such a condition so that it
may be permitted to resume
business with safety to its
supervising or examining department, the depositors and creditors and the
Monetary Board finds that a bank or quasi- general public:
bank: PROVIDED,
1. is unable to pay its liabilities as they That any determination for the
become due in the ordinary course of resumption of business of the
business: Provided, That this shall not institution
include inability to pay caused by shall be subject to
extraordinary demands induced by financial
panic in the banking community;
2. has insufficient realizable assets, as
prior approval of the MB
SHOULD THE RECEIVER

determined by the Bangko Sentral, to meet D E T E R M I N E S T H AT T H E
its liabilities; INSTITUTION CANNOT BE
3. cannot continue in business without REHABILITATED OR PERMITTED TO
involving probable losses to its depositors
or creditors; or
4. has willfully violated a cease and desist

RESUME BUSINESS
Monetary Board shall

order under Section 37 that has become notify in writing the board of directors
final, involving acts or transactions which of its findings and direct the receiver to
amount to fraud or a dissipation of the proceed with the liquidation of the
assets of the institution;
SHOULD THE GROUNDS ARE PRESENT

institution.

the Monetary Board may
summarily and without need for prior hearing
1. FORBID the institution
from doing business in the Philippines
and
2. DESIGNATE PDIC
as receiver of the banking institution.
FOR QUASI BANKS
any person of recognized
competence in banking or
finance may be designed as
receiver.
DUTIES OF THE RECEIVER

The receiver shall
1. immediately gather and take charge of all
the assets and liabilities of the institution,
2. administer the same for the benefit of its
creditors, and
3. exercise the general powers of a receiver
under the Revised Rules of Court
BUT SHALL NOT
pay or commit any act that will involve
the transfer or disposition of any asset
of the institution:
EXE:
a. administrative expenditures,
b. deposit or place the funds of the
institution in non-speculative
investments.

BANKING LAWS
FISCAL TAMBASACAN
IN HERE: FF DUTIES OF THE RECEIVER The assets of an institution under

• file ex parte with the proper regional trial receivership or liquidation
court, and without requirement of prior • shall be deemed in custodia legis in
notice or any other action, the hands of the receiver and
a petition for assistance in the • from the moment the institution was
liquidation of the institution placed under such receivership or
pursuant to a liquidation plan liquidation,
adopted by the PDIC BE EXEMPT FROM
for general application any order of garnishment, levy,
to all closed banks.
IN CASE IF QUASI BANKS,
the liquidation plan shall be

NOTE:
attachment, or execution.
adopted by the MB.
THE COURT SHALL THEN

The actions of the Monetary Board
taken under this section or under
Section 29 of this Act shall be
Upon acquiring jurisdiction, 1. final and executory, and
upon motion by the receiver 2. may not be restrained or set
after due notice, aside by the court
1. a d j u d i c a t e d i s p u t e d EXCEPT
claims against the
institution,
2. assist the enforcement of

petition for certiorari
on the ground
individual liabilities of the - that the action taken
stockholders, directors was in excess of
and officers, and jurisdiction or with
3. decide on other issues as such GAD as to
may be material to amount to lack or
implement the liquidation
plan adopted.
****The receiver shall pay the

excess of jurisdiction.
who can file

cost of the proceedings can only be filed by
from the assets of the the SH of record -
institution.
• convert the assets of the institutions to

• representing the
majority of the
capital stock

money,
• dispose of the same to creditors and

within ten (10)
days
from receipt
other parties, by the BOD of
PURPOSE the institution
paying the debts of such institution in of the order
accordance with the rules on directing
concurrence and preference of credit receivership,
under the Civil Code of the Philippines liquidation or
and he may, in the name of the conservatorsh

institution, and
• with the assistance of counsel as he

ip.
The designation of a conservator under

may retain, institute such actions as may Section 29 of this Act or the appointment of a
be necessary to collect and recover receiver under this section shall be vested
accounts and assets of, or defend any

action against, the institution.

exclusively with the Monetary Board.
Furthermore, the designation of a

conservator is not a precondition to the

designation of a receiver.

BANKING LAWS
FISCAL TAMBASACAN
D . C U R R E N C Y; L E G A L T E N D E R ; SEC. 56: REPLACEMENT OF CURRENCY

REPLACEMENT AND RETIREMENT OF UNIT FOR CIRCULATION

CURRENCIES
SEC: 49: CURRENCY; DEFINED

ThE BSP shall
• withdraw from circulation and
• shall demonetize all notes and coins
all Philippine notes and coins issued or which for any reason whatsoever are
circulating in accordance with the provisions of - unfit for circulation

this Act.
IN ACCORDANCE WITH THIS ACT;

• and shall replace them by adequate notes
and coins.
NOTE:
means: Notes and coins in such
- Phil currency issued by the BSP
SEC. 52: LEGAL TENDER

mutilated conditions shall be
- withdrawn from circulation
and
All notes and coins issued by the BSP - demonetized
• shall be fully guaranteed by the W I T H O U T
- Government of the Republic of the compensation to the
Philippines
• and shall be legal tender in the
Philippines

PROVIDED HOWEVER,
bearer
- for all debts, both public and private:
Provided, however, That, unless otherwise

That the BSP SHALL NOT
replace notes and coins
1. the identification of which is
fixed by the Monetary Board, coins shall be impossible,

legal tender in amounts
not exceeding Php 50

2. coins which show signs of filing,
clipping or perforation, and
3. notes which have lost more than
for denominations of 25 c and above, two-fifths (2/5) of their surface or
not exceeding P20.00 all of the signatures inscribed

for denominations of 10 c or less.
SEC. 55: INTERCONVERTABILITY OF

thereon.
.
SEC. 57: RETIREMENT OF OLD NOTES

CURRENCY
BSP SHALL EXCHANGE, ON DEMAND AND

AND COINS

The BSP may call in for replacement
WITHOUT CHARGE FOR NOTES

Philippine currency of any denomination for
Philippine notes and coins of any other
those more than 5 years old

denomination requested.
If for any reason the Bangko Sentral is

FOR COINS
those which are more than 10 yrs old.
temporarily unable to provide notes or Notes and coins called in for replacement in
coins of the denominations requested, accordance with this provision
it shall meet its obligations by: SHALL REMAIN A LEGAL TENDER
delivering notes and coins of the • for a period of 1 year
denominations
which most nearly
approximate those
• from the date of call.
AFTER THIS PERIOD
requested. (LAPSE OF 1 YR FROM CALL)

they shall cease to be legal tender
BUT DESPITE OF SUCH LAPSE

• during the following year, or
• for such longer period as the
Monetary Board may determine,
THEY MAY BE EXCHANGED
- at par and without charge
- in the BSP and by agents duly
authorized by the BSP for this
purpose.
BANKING LAWS
FISCAL TAMBASACAN
AFTER THE EXPIRATION OF 1

YR PERIOF AFTER THE

EXPIRATION OF 1 YR FROM
CALL OF RETIREMENT
- and the notes and coins which
have not been exchanged shall
• cease to be a liability of the
Bangko Sentral and

• shall be demonetized.
The Bangko Sentral shall also

demonetize all notes and coins
which have been called in and
replaced.
G I S T: T H E F F S H A L L B E
DEMONITIZED
• all notes and coins which have been
called in and replaced
- those unfit for circulation
- those which has been
mutilated
• all coins and notes which has not
been exchanged after the lapse of 1
year, counted from the expiration of
1 year from the call of retirement by
the BSP

SEC. 60: LEGAL CHARACTER
CHECKS
representing demand deposits
DO NOT HAVE
legal tender power and
their acceptance in the payment
of debts, both public and private,
is at the option of the creditor:
PROVIDED HOWEVER
That a check which has been cleared
and credited to the account of the
creditor
SHALL BE EQUIVALENT TO
a delivery to the creditor of cash
in an amount equal to the amount
credited to his account.

BANKING LAWS
FISCAL TAMBASACAN

E. RESERVES SEC. 66: COMPOSITION

INTERNATIONAL RESERVES
OF

SEC. 65: INTERNATIONAL RESERVES
PURPOSE
The international reserves of the Bangko
Sentral may include but shall not be limited to
In order to maintain the international stability the following assets:

and convertibility of the Philippine peso.
FOR THIS PURPOSE (Sec. 66)

1. gold; and
2. assets in foreign currencies in the form of:
a. d o c u m e n t s a n d i n s t r u m e n t s
The Monetary Board shall customarily employed for the
1. endeavor to hold the foreign international transfer of funds;
exchange resources of the b. demand and time deposits in central
Bangko Sentral in freely banks, treasuries and commercial
convertible currencies; banks abroad;
2. give particular consideration to the c. foreign government securities; and
prospects of continued strength
and convertibility of the currencies
in which the reserve is maintained,

.
d. foreign notes and coins.
as well as to the anticipated NOTE:

demands for such currencies. The Bangko Sentral shall be free to
3. issue regulations determining the convert any of the assets in its
other qualifications which foreign international reserves into other assets
exchange assets must meet in
order to be included in the as described in 1 and 2.

international reserves of the
Bangko Sentral
SEC. 94: RESERVE REQUIREMENTS
PURPOSE OF MAKING A RESERVE

DUTY REPOSED UPON In order to control the volume of money
BSP shall maintain international reserves created by the credit operations of the banking
adequate to meet any foreseeable net
demands on the Bangko Sentral for
system
foreign currencies.
GUIDELINES IN JUDGING THE ADEQUACY

DUTY IMPOSED UPON
1. all banks operating in the Philippines

OF INTERNATIONAL RESERVES shall be required to maintain reserves
1. the prospective receipts and payments of against their deposit liabilities
foreign exchange by the Philippines. 2. all banks and/or quasi-banks
2. the volume and maturity of the Bangko to maintain reserves
Sentral's own liabilities in foreign against funds held in trust and
currencies, to the volume and maturity of liabilities for deposit substitutes.
the foreign exchange assets and liabilities As the MB my prescribe in
of other banks operating in the Philippines
and,
3. insofar as they are known or can be
its discretion.
estimated, the volume and maturity of the

foreign exchange assets and liabilities of all
other persons and entities in the
Philippines.

BANKING LAWS
FISCAL TAMBASACAN
***DEPOSIT SUBSTITUTE with respect to the imposition,

an alternative form of obtaining funds increase, and computation of
from the public, other than deposits,
through the
• issuance,
reserves.
W H E N R E S E RV E R E Q U I R E M E N T I S
• endorsement, or DISPENSED WITH
• acceptance of deposits and deposit substitutes
debt instruments for the 1. with remaining maturities of 2 yrs or more,
borrower's own account,
for the purpose of
relending or purchasing of receivables

2. as well as interbank borrowings.
FOR RESERVE DEPOSITS, BSP IS NOT
and other obligations.
These instruments may

LIABLE TO PAY FOR INTEREST
RATION
include, but need not be Since the requirement to maintain bank
limited to, reserves is imposed primarily to control
1. bankers acceptances,
2. promissory notes,
3. participations, EXE:

the volume of money,
4. c e r t i fi c a t e s of MB decides otherwise as warranted by

assignment and
5. similar instruments with
recourse, and
circumstances.
repurchase agreements.
THE FF SHALL NOT BE

CONSIDERED AS A
DEPOSIT SUBSTITUTE
The deposit substitutes of
commercial, industrial and
o t h e r n o n - fi n a n c i a l
companies for the limited
purpose of
1. fi n a n c i n g t h e i r o w n
needs or
2. t h e n e e d s o f t h e i r
agents or
3. dealers

REQUIRED RESERVES
BANKS
shall be proportional to the volume of its
deposit liabilities
FORM

ordinarily, deposit to BSP
NOTE:
Reserve requirements shall be
applied to all banks of the same
category uniformly and without
discrimination.
R E S E RV E S A G A I N S T D E P O S I T
SUBSTITUTE,
if imposed,
shall be determined in the same manner
as provided for reserve requirements
against regular bank deposits,

BANKING LAWS
FISCAL TAMBASACAN

SEC. 102: INTERBANK SETTLEMENT
• The BSP shall establish facilities for

SEC. 103: EXEMPTION FROM
ATTACHMENT AND OTHER
Deposits maintained by banks with the Bangko
interbank clearing under such rules and Sentral as part of their reserve requirements
regulations as the Monetary Board may shall be exempt from
prescribe: • attachment,
• The BSP may charge administrative and • garnishments, or
other fees for the maintenance of such • any other order or process of any
facilities.
The deposit reserves maintained by the banks

court, government agency or any
other administrative body
issued to satisfy the claim of a
in the Bangko Sentral in accordance with the party
provisions of Section 94 of this Act EXE:
SHALL SERVE AS A BASIS for claim of the
• for the clearing of checks and 1. Government, or
• the settlement of interbank balances, 2. its political subdivisions or
subject to such rules and regulations as
the MB may issue with respect to such
3. instrumentalities.
operations:
SHOULD A BANK INCUR OVERDRAWING IN

ITS DEPOSIT ACCOUNT WITH BSP
shall fully cover said overdraft, including
interest thereon
AT A RATE
• equivalent to 1/10 of 1% per day or
• the prevailing ninety-one-day
treasury bill rate
PLUS three percentage points,
= whichever is higher, not later than the
next clearing day:
***and the overdrawing bank must be officially

notified of such overdrawn.
T H AT S E T T L E M E N T O F C L E A R I N G
BALANCES SHALL NOT BE EFFECTED FOR
ANY ACCOUNT
which continues to be overdrawn for
5 consecutive banking days
UNTIL
• such time as the overdrawing is
fully covered or
• otherwise converted into an
emergency loan or advance
pursuant to the provisions of
Section 84 of this Act:
OPTIONS OF THE OVERDRAWING BANK

1. convert the overdraft into an emergency
loan or advance with a plan of payment, or

2. settle such overdrafts, and that,
IN CASE OF AILURE TO COMPLY

the BSP shall take such action against
the bank as may be warranted under
this Act.

BANKING LAWS
FISCAL TAMBASACAN
III. BANK SECRECY LAW HOWEVER; any

information regarding
(RA 1405)
the existence of the
safety deposit box is
still considered secret

A. RULE AND EXCEPTIONS
WHAT LAW GOVERNS SECRECY OF NAK

and confidentiak in
view of Sec. 55, 1(b)
- any information

DEPOSITS
RA. 1405
relative to FUNDS and
PROPERTIES of
- all deposits of whatever nature including clients of a bank are to
investment with banks be kept confidential by
ARE CONSIDERED such bank and its
absolutely confidential in nature; and d i r e c t o r s , o f fi c e r s ,
may not be examined, inquired, or employees or agents.
looked into by any person, govt official, - such information
cannot be disclosed to
bureau or office
DEPOSITS COVERED
any unauthorized
person without court
all deposits of whatever nature including

investment with banks
order.
NOTE:
HENCE bank is liable for the
not only limited to deposits but also loss of the thing kept
investment in safety deposit box
- as otherwise, the word investment - if it is due to the
should not have been included in the fraud, negligence, or
delay or contravention

definition of the word deposit.
of the tenor of the

THIS INCLUDE
TRUST ACCOUNT

***DEPOSITS
agreement.
- included in the phrase - for SBD purposes; broad application,

and not merely limited to account
"deposits of whatever nature"
which give rise to a creditor-debtor
relationship between the depositor and

BUT DOES NOT INCLUDE/COVER
MONEY MARKET
the bank.
PLACEMENT RATION OF THE BROAD

- as neither it is a deposit or an APPLICATION
1. to give encouragement to

investment in govt funds
ALSO; SBD does not cover

the people to deposit
their money in banking
inquiry as to the name of the institution
2. to discourage private

drawer
SAFETY DEPOSIT BOX

hoarding so that the
same may be purely
- as not strictly a deposit, but a u ti l i z e d b y b a n k s i n
special kind of deposit. authorized loan to assist
relationship created between in the economic
the bank and the lessee of the development of ye
safety deposit box is bailee-
bailor relationship. akin to country
bailment, being for hire and

mutual benefit has been

adopted in this jurisdiction.

BANKING LAWS
FISCAL TAMBASACAN
NOTE:
any information in violation of
the SBD Law, shall not be

EXCEPTIONS TO THE SBD
1. in case of an examination, general or

rendered inadmissible special, of the MB
- as nowhere in RA 1405 after being satisfied that
which provides for such - there is a reasonable ground to
- what the law merely provides believe that a bank fraud or serious
is that irregularity has been or is being
any violation of this committed
law will subject the - and that it is necessary to look into
offender upon the deposit to establish such fraud or
conviction, to an irregularity
imprisonment if not 2. in case of examination by an independent
more than 5 years and auditor, hired by the bank
a fine of not more than - for audit purposes only
20k or both, in the - and the result thereof shall be for the
discretion of the court.
PERSONS BANNED FROM LOOKING INTO

exclusive use of the bank
3. written permission of the depositor
4. in case of impeachment.
BANK DEPOSITS 5. upon order of competent court,
any person, government official, bureau or in case of
office.

DOS NOT COVER;
- bribery
- dereliction of duty of public officials
***unexplained wealth

OMBUDSMAN
PROVIDED; requisites
- akin to dereliction of
duty
***plunder cases
1. only in-camera inspection is - akin to bribe
allowed 6. in case where the money deposited or
2. there must be a pending case invested is the subject matter of litigation
before a court of competent 7. in case of inquiry of the BIR of bank
jurisdiction accounts of a decedent
3. the account must be clearly for estate tax purposes or in case of
identified tax compromise
4. the inspection is limited to the 8. incidental disclosure of the unclaimed
account subject of the court case balances
5. the bank personnel and account under the Unclaimed Balance Law
holder must be notified to be 9. upon order of competent court
present during the inspection.
there must be a pending case

in cases of violation of the AMLA
10. the examination of a bank account based
in sec. 10 rule 57 of the rules of court
- does this cover preliminary the examination of a party whose

investigation? property is attached and person
indebted to a defendant or controlling
PERSONS BANNED FROM DISCLOSING
ANY INFORMATION CONCERNING BANK
DEPOSITS; any
his property.
NOTE: IN ANTI-GRAFT CASES

1. official or employee of a bank, or - inquiry into illegally acquired property
2. an independent auditor hired by the bank to / or property nor legitimately acquired
conduct its regular audit.
DOES NOT COVER

EXTENDS
even to cases where such
property is concealed by being
- those person who overheard such held by or recorded in the
information and thereafter disclose it. if name of the spouse,
such person is not an official or ascendants, descendants and
employee of a bank, or an relatives of the person

independent auditor hired by the bank. investigated, and those in the

name of other persons.

BANKING LAWS
FISCAL TAMBASACAN
NOTE: inquiry by the SH on corporate

books, supposing SH of a bank, such
right must be exercised in GF or for
legitimate reasons, otherwise, would
amount to violation of the SBD law,
supposing what is being inquired into

is an specific account if a depositor.
SBD DOES NOT INCLUDE

PROHIBITION AGAINST
GARNISHMENT
- as there is no real inquiry, and if the
deposit is disclosed in the process,
such is merely incidental to the

execution process.
NOTE: IF THE DEPOSIT IS

M E R E LY A S U B J E C T
M AT T E R OF AN
ATTACHMENT
- it does not make it a subjct
matter of litigation
- such attachment will not
justify its disclosure
EXE TO EXE
WHEN A DEPOSIT EVEN THOUGH A
SUBJECT MATTER OF LITIGATION,
STILL CANNOT BE INQUIRED INTO

- FCDA

BANKING LAWS
FISCAL TAMBASACAN
I V. F O R E I G N C U R R E N C Y
DEPOSIT ACT
RA. 6426

A. RULE AND EXCEPTIONS
FOREIGN CURRENCIES COVERED

- all kinds of foreign currency deposits,

deposited in Philippine Banks in good standing
HENCE; does not cover

- those maintained in foreign banks
INQUIRY ON FOREIGN CURRENCY

DEPOSITS
GEN RULE:
NOT ALLOWED
- foreign currency deposits shall not be
allowed to be examined, inquired into
by any person, government official,
bureau or office,
whether judicial or
administrative or legislative
or any other entity whether private or

public.
EXCEPTIONS:
1. upon a written permission of the
depositor
2. upon order of a competent court in
case of violation of AMLA, when it
has been established that there is
a cause that the deposit involved
are in any way related to money
laundering offense.
3. Human Security Act
4. Chinabank vs. Ca (Dec 18, 2006)
- pro hac vice lang to ha.
FOREIGN CURRENCY DEPOSITS,

EXEMPTED FROM GARNISHMENT
EXE
1. amla

2. chinabank case

BANKING LAWS
FISCAL TAMBASACAN
V. TRUTH IN LENDING ACT THIS INCLUDE

- any person who as a regular
RA 3765 business, practices
- is an act to require the disclosure if
finance • loan
charges in connection with the extension of • sells or rents property or
services

credit
REQUIRES
= on a time, credit or installment
basis,
- any creditor is required to furnish each either as a principal or an
person to whom credit is extended, prior to the
consummation of the transaction
clear statement in writing setting
agent.
FINANCE CHARGE; include under TLA

forth, to the extent applicable and in 1. interest fee
accordance with the rules and 2. service charge
regulations prescribed by the MB, 3. discounts; and
4. such other charges incident to he

the ff info:
extension of credit as Board may by
1. the cash price or the delivered
price
- of the property or
regulation prescribed.
IMPLICATION OF NON-COMPLIANCE WITH

service to be acquired. THE TLA
2. the amount, if any 1. creditor shall pay a fine of 100 or double
- to be credited as the amount of the finance charge, BUT in
downpayment and/or no case shall exceed 2k
trade-in 2. in case of willful violation, the fine shall not
3. the difference between the be less than 1k but not more than 5k, or
amount set forth under 2 and 3 imprisonment for not less than 6mod, nor
4. the charges
individually itemized,
- which are to be paid by

more than 1 year or both
HOWEVER, IT DOES NOT

such person in AFFECT THE ENFORCEABILITY
connection with the
transaction
- but which are not

OF THE CONTRACT
NOTE: in credit card transaction

incident to the extension - the store from which a person
of credit. used the credit card, need not
5. the total amount to be financed comply with the TLA
6. the finance charge as the transaction
- expressed in terms of involved therein is not on
pesos and centavos installment basis,
8. the percentage that the finance - it was the credit card
charge bears to the total amount to company which extends
be financed the privilege of payin in
- expressed as simple
annual rate on the
outstanding unpaid
installments
NOTE: TLA DOES NOT ADMIT SUBSTANTIAL

COMPLIANCE.

CREDITORS UNDER TLA
balance of the obligation
- dapat; full disclosure in writing of any matter
in connection with the extension of credit,
- any person engaged in the business of must be made prior to such
extending credit
who requires as an incident to the extension.
extension of credit

- the payment of the finance charge.

BANKING LAWS
FISCAL TAMBASACAN

VI. UNCLAIMED BALANCE LAW
ACT 3936

A. COVERAGE
SHALL INCLUDE
1. credits
2. deposits of money
3. bullion
4. security; or
5. other evidence of indebtedness
WITH
a. banks
b. buildings and loan associations;
and
c. trust corporations
IN FAVOR OF A PERSON
• known to be dead; or
• who has not made further deposits or
withdrawals
during the preceding 10 yrs or more.
WHAT WILL HAPPEN TO THE UNCLAIMED

BALANCE (including the increase and the
proceeds thereof)

- shall be subjected to escheat proceedings.
SHALL BE DEPOSITED

- with the Treasurer of the RP
TO THE CREDIT OF

- the Gov't of the Phil
TO BE USED
- as the National Assembly may direct.
(Congress)
PUBLICATION REQUIREMENT
(DUE PROCESS)
1. notify the owner, by sending a copy of the
notice to the last known address of the
depositor
2. publish said notice
3. notice contained in the publication is the
name of the owner and the fact which give
rise to the escheat proceedings. note; not

the amount.
~absence, everything becomes null

and void.
NOTE:
the publication here is an
exception of SBD 

BANKING LAWS
FISCAL TAMBASACAN
VII. PHILIPPINE DEPOSIT which is consistent with banking usage

and practices,
INSURANCE CORPORATION the Board of the PDIC shall
RA 3591 determine and prescribe by
regulations to be deposit
A. C O V E R A G E ; HOW AMOUNT
liabilities of the bank.
COMPUTED
PURPOSE OF PDIC
NOTE: DEPOSIT DOES NOT COVER
Any obligations of a bank which is
payable at the office of the bank
- to insure deposit of all banks which are located outside the Phil.

entitled to the benefits of insurance
RISK INSURED AGAINST

HOWEVER
subject to the approval of the
Board of the PDIC

- bank closure
TYPES OF DEPOSITS COVERED

- any insured bank which
maintains a branch outside the
Phil
1. savings account may elect to include
2. current account for insurance its
3. time deposits; and deposit obligations
4. deposits in acceptable foreign currencies payable only

pursuant to FCDA at such
QUALIFICATION:
- that the deposit must be made in the INSURED DEPOSIT; defined
branch.

regular course of business
NOTE: DOES NOT COVER

amount due to any depositor for deposits in an
insured bank
net of any obligation of the depositor to

Trust funds
NATURE OF LIABILITY OF PDIC

the insured bank
as of the date of closure
BUT NOT EXCEEDING

- statutory
NOTE: mere statement in the

500k
NOTE:
certificate that the same is insured by HOLDER OF A NEGOTIABLE CERTIFICATE
PDIC OF DEPOSIT
- is not binding to the latter. for PDIC NOT ENTITLED TO THE RIGHT OF
be held liable, there must be AN INSURED DEPOSITOR
compliance with the requirement of RA EXE
3591. - his name is registered as owner/
holder thereof in the books of the

DEPOSIT; as defined in PDIC Law
unpaid balance of money or its equivalent

issuing bank. 
received by a bank in the usual course of

business
- for which it has given or is obliged to give
credit to
• commercial
• savings
• time; or
• thrift account; or
- as evidenced by a
• passbook
• check and/or
• certificate of deposit
printed or issued
in accordance with BSP rules and
regulations and other applicable laws
together with
such other obligations of a bank
BANKING LAWS
FISCAL TAMBASACAN
HOW AMOUNT DUE TO DEPOSITOR

DETERMINED
add together
- all deposits in the bank
maintained in the same right and
capacity for his benefit
either in his own name or in
the name of others.
I. FOR JOINT ACCOUNTS

- regardless of the conjunction used;
"and," "or," or "and/or"
shall be insured separately
from any individually owned
deposit account.
RULE ON DIVISION AMONG

CO-OWNER
1. equal share
2. if there is a stipulation,
stipulation shall prevail.
3. but if one of the co-owner is
a juridical entity
- all the proceeds shall be
presumed to belong to the
JE.
4. if both are JE, apply 1 or
2.
II. SINGLE DEPOSITOR ACCOUNT

- basta, add lahat, kahit na yung
depositor has different account.
- ie. may checking, savings and time
deposit sya, yung aggregate nun

yung basis ng computation.

III. IN TRUST FOR ACCOUNT
ITF ACCOUNT
- the depositor merely acts as an
agent.
- hence, in this instance, the deposit
made by such depositor shall not be
included in the computation of his
individual aggregate deposit with the

insured bank
IBA ITO SA
JOHN DOE BY JUAN DE LA CRUZ
- juan dela cruz is the agent here. so
in determining the amount of the
insured deposit of John Doe, the
deposit made by Juan dela cruz shall
be included in the computation of his
aggregate individual deposits with

the insured bank.
BASTA: refer to Iggy's book for

concrete, blow by blow, examples. :) 
BANKING LAWS
FISCAL TAMBASACAN
VIII. ANTI-MONEY LAUNDERING

ACT

B. COVERED TRANSACTIONS
I. a single, series, or combination of

RA 10167, 10168, 9160, 9194 transactions

MONEY LAUNDERING; defined
INVOLVING
a total amount in excess of
• Php 4M or
- is a crime, whereby the proceeds of an
• an equivalent amount in foreign
unlawful activity are transacted, currency
thereby making them appear to have based on the prevailing

originated from legitimate sources exchange rate within five (5)
consecutive banking days

A. COVERED INSTITUTIONS
I. banks, non-banks, quasi-banks, trust entities,

EXCEPT
those between a covered institution and
a person who,
and all other institutions and their subsidiaries at the time of the transaction
and affiliates supervised or regulated by the was a properly identified

BSP
II. insurance companies and all other

client
and the amount is commensurate
with
institutions supervised or regulated by the
• t h e b u s i n e s s o r fi n a n c i a l
Insurance Commission; and capacity of the client; or
• those with an underlying legal
III. or trade obligation, purpose,
• securities dealers, brokers, salesmen,
investment houses and other similar entities
managing securities or rendering services as
origin or economic justification.
II. single, series or combination or pattern of

investment agent, advisor, or consultant; UNUSUALLY LARGE AND COMPLEX
• mutual funds, close-end investment TRANSACTION
companies, common trust funds, pre-need in excess of Php 4M
companies and other similar entities; especially
• foreign exchange corporations, money cash deposits and investments
changers, money payment, remittance, and having no credible
transfer companies and other similar entities; purpose or origin,
and underlying trade obligation
• other entities administering or otherwise
dealing in currency, commodities or financial
derivatives based thereon, valuable objects,
or contract.
cash substitutes and other similar monetary

instruments or property supervised or
regulated by the SEC.

BANKING LAWS
FISCAL TAMBASACAN

C. SUSPICIOUS TRANSACTIONS
1. there is no underlying legal or trade

perpetrated by terrorists against non-
combatant persons and similar targets;
13. Fraudulent practices and other violations
obligation, purpose, or economic under Republic Act No. 8799, otherwise
justification known as the Securities Regulation Code
2. the client is not properly identified of 2000;
3. the amount involved is not commensurate 14. Felonies or offenses of a similar nature that
with the business or financial capacity of are punishable under the penal laws of
the client
4. t a k i n g i n t o a c c o u n t a l l k n o w n other countries.
circumstances, it may be perceived that the

client's transaction is structured in order to
avoid being the subject of reporting

E. HOW VIOLATION COMMITTED
1. Any person knowing that any monetary

requirement under the act instrument or property represents,
5. a n y c i r c u m s t a n c e s r e l a t i n g t o t h e involves, or relates to,
transaction which is observed to deviate the proceeds of any unlawful
from the profile of the client and/or the activity,
client's past transactions with the covered transacts or attempts to transact said
institution
6. the transaction is in any way related to an
unlawful activity or any money laundering
monetary instrument or property.
2. Any person knowing that any monetary

activity or offense under this Act that is instrument or property
about to be, is being or has been involves
committed. the proceeds of any unlawful
7. any transaction that is similar, analogous or activity,
identical to any of the foregoing.
D . P R E D I C AT E C R I M E S TO M O N E Y
performs or fails to perform any act
as a result of which
he facilitates the offense of

LAUNDERING
1. Kidnapping for ransom

money laundering referred
to in paragraph (a) above.
2. Sections 3, 4, 5, 7, 8 and 9 of Article Two of 3. Any person knowing that any monetary
Dangerous Drugs Act instrument or property
3. Section 3 paragraphs B, C, E, G, H and I of is required under this Act to be
Republic Act No. 3019, as amended, • disclosed and
otherwise known as the Anti-Graft and • filed with the Anti-Money Laundering
Corrupt Practices Act Council (AMLC),
4. Plunder;
5. Robbery and extortion under Articles 294, fails to do so.
295, 296, 299, 300, 301 and 302 of the

Revised Penal Code, as amended;
6. Jueteng and Masiao punished as illegal

F. SAFE HARBOR PROVISION
NO administrative, criminal or civil

gambling under Presidential Decree No. proceedings, SHALL LIE AGAINST
1602; any person for having made a
7. Piracy on the high seas under the Revised • covered transaction report; or
Penal Code, as amended and Presidential • a suspicious transaction report
Decree No. 532; in the regular performance of his duties
8. Qualified theft under Article 310 of the and in good faith,
Revised Penal Code, as amended; whether or not such reporting
9. Swindling under Article 315 of the Revised results in any criminal
Penal Code, as amended; prosecution under this Act
10. Smuggling under Republic Act Nos. 455 or any other Philippine
and 1937;
11. Violations under Republic Act No. 8792, law.
otherwise known as the Electronic

Commerce Act of 2000;
12. Hijacking and other violations under
Republic Act No. 6235; destructive arson
and murder, as defined under the Revised

Penal Code, as amended, including those
BANKING LAWS
FISCAL TAMBASACAN
G. PROHIBITION AGAINST POLITICAL

PERSECUTION
FREEZE ORDER
UPON
THIS ACT SHALL NOT BE USED determination that probable cause exists
• for political persecution or harassment or that any deposit or similar account is in
• as an instrument to hamper competition in any way related to an unlawful activity,
trade and commerce.
• No case for money laundering may be filed

= the AMLC may issue a freeze order,
[EFFECTIVITY]
against and effective immediately,
• no assets shall be frozen, attached or on the account for a period not
forfeited
TO THE PREJUDICE
of a candidate for an electoral office
exceeding fifteen (15) days.
EXTENSION
during an election period. upon order of the court,

PROVIDED

H. FREEZE ORDER AND INQUIRY ORDER that the 15 day period
shall be tolled

INQUIRY pending the court’s
decision to extend the
NOTWITHSTANDING
FCDA, SBD, GBL and other laws period.
NOTICE TO THE DEPOSITOR

THE AMLC MAY that his account has been frozen
INQUIRE AND EXAMINE SHALL BE ISSUED
any particular deposit or investment simultaneously with the issuance of the
with any banking institution or non-bank
financial institution
UPON
freeze order.
UPON RECEIPT OF THE NOTICE

order of any competent court The depositor shall have
in cases of violation of this Act
when it has been established

72 hrs from receipt of the notice
TO
explain why the freeze order
that there is probable cause that the
deposits or investments involved
are in any way related to a
should be lifted.
The AMLC has

money laundering offense: 72 hrs
PROVIDED, That this provision shall not TO
apply to deposits and investments made dispose of the depositor ’s

prior to the effectivity of this Act. explanation.
If it fails to act within 72

hrs from receipt of the
depositor’s explanation,
the freeze order shall
automatically be
[TRO AGAINST FREEZE]

dissolved.
No court shall issue a TRO or writ of injunction

against any freeze order issued by the
AMLC
EXCEPT
the CA or the SC.

BANKING LAWS
FISCAL TAMBASACAN
IX. CHATTEL MORTGAGE LAW must be specifically phrased to

subsume all debts of past or
RA 1508
future origin

A. DEFINITION
CHATTL MORTGAGE

B. SUBJECT MATTER
All personal property

is a conditional sale of personal property shall be subject to mortgage, agreeably
AS SECURITY FOR
• the payment of a debt, or
to the provisions of this Act,
and a mortgage executed in pursuance

• the performance of some other
thereof
obligation specified therein,
THE CONDITION BEING THAT shall be termed chattel mortgage
the sale shall be void upon the seller

- paying to the purchaser a sum
of money or

C. REGISTRATION; FAILURE
A CHATTEL MORTGAGE SHALL NOT BE

- doing some other act named. VALID AGAINST ANY PERSON
IF THE CONDITION IS PERFORMED EXE:
according to its terms the mortgagor,
• the mortgage and sale immediately his executors or administrators
become void, UNLESS:
• and the mortgagee is thereby • the possession of the property
is delivered to and retained by
divested of his title.
DRAGNET CLAUSE
the mortgagee; or
• the mortgage is recorded in the
aka BLANKET MORTGAGE CLAUSE office of the register of deeds
- when a mortgage is worded as to be broad - of the province in which the
enough to cover all other debts in addition to mortgagor resides
the one specifically secured at the time of making
WIILL BE CONSTRUED the same, or,
to cover a different debt, - That if the is situated in a
although such other debt us different province from that in
which the mortgagor resides,
secured by another mortgage.
BASTA DITO
the mortgage shall be
recorded in the
- implied based from the agreements office of the register of
of the parties that subsequent debts deeds of both the
shall be covered/ secured by the first province in which
• the mortgagor

mortgage
CONTRA; "RELIANCE ON SECURITY

resides and
• that in which the
TEST" property is
- when a subsequent loan was taken situated
from the same creditor-mortgagee, - if he resides without the
and the debtor-mortgagor furnished Philippine Islands,
another security in the province in
it cannot therefore be inferred which the property is
that the first loan was made in
reliance solely on the original situated
security with dragnet clause.
DRAGNET CLAUSE

- carefully and strictly construed.
IMPLICATION
- for validity of the dragnet clause,
REQ

BANKING LAWS
FISCAL TAMBASACAN
D. AFFIDAVIT OF GOOD FAITH

Part of the chattel mortgage contract
wherein it is stated that

FORECLOSURE
The mortgagee, his executor, administrator, or

• the chattel mortgage has been constituted to assign, may,
secure a principal obligation AFTER 30 DAYS
• and not meant for fraud or any ill from the time of condition broken,
purpose
FORM OF OATH.
cause the mortgaged property, or
any part thereof,
to be sold at public auction by a
"We severally swear that the foregoing public officer at a public place in
mortgage is made the municipality
• for the purpose of securing the • where the mortgagor resides,
obligation specified in the conditions or
thereof, and for no other purpose,
and
• that the same is a just and valid

• where the property is situated,
PROVIDED
obligation, and AT LEAST 10 DAYS NOTICE
• one not entered into for the of the time, place, and
purpose of fraud."
E. REMEDIES OF THE MORTGAGEE IN

purpose of such sale
1. has been posted
at 2 or more public

CASE OF DEFAULT
DISCHARGE OF MORTGAGE DUE TO

places in such
municipality, and
2. the mortgagee, his

BREACH OF CONDITION
when the mortgagee

executor, administrator, or
assign,
shall notify the mortgagor or
within 10 days person holding under him and
AFTER being requested thereto by any the persons holding
person entitled to redeem, subsequent mortgages
discharge the mortgage in the of the time and place
manner provided by law, of sale,

either by notice in

[REMEDY OF THE MORTGAGEE]
BEFORE FORECLOSURE
writing
• directed to him or left
at his abode, if within
When the condition of a chattel mortgage is the municipality, or
broken, • sent by mail if he does
• a mortgagor or person holding a subsequent not reside in such
mortgage, or municipality,
• a subsequent attaching creditor AT LEAST 10 DAYS
MAY REDEEM THE SAME; BY
paying or delivering to the mortgagee
• the amount due on such mortgage and
previous to the sale.
• the reasonable costs and expenses incurred "SECTION 198. Registration of chattel
by such breach of condition mortgages and fees collectible in connection

NOTE:
[TIMEFRAME] before the sale thereof. therewith. — Every register of deeds shall
keep a primary entry book and a registration
book for the chattel mortgages; shall certify on
An attaching creditor who so redeems each mortgage filed for record, as well as on
shall be its duplicate, the date, hour, and minute when
• subrogated to the rights of the mortgagee the same was by him received; and shall
and record in such books any chattel mortgage,
• entitled to foreclose the mortgage in the assignment, or discharge thereof, and any
same manner that the mortgagee could other instruments relating to a recorded
foreclose it by the terms of this Act. mortgage, and all such instruments shall be
presented to him in duplicate, the original to be
filed and the duplicate to be returned to the

person concerned.

BANKING LAWS
FISCAL TAMBASACAN
"The recording of a mortgage shall be effected centavos for each additional five hundred
by making an entry, which shall be given a
correlative number, setting forth the names of
the mortgagee, and the mortgagor, the sum or

pesos or fractional part thereof.
"2. When the amount of the mortgage is more

obligation guaranteed, date of the instrument, than six thousand pesos but does not exceed
name of the notary before whom it was sworn thirty thousand pesos, twenty-four pesos for
to or acknowledged, and a note that the the initial amount not exceeding eight
property mortgaged, as well as the terms and thousand pesos, and four pesos for each
conditions of the mortgage, is mentioned in additional two thousand pesos or fractional
detail in the instrument filed, giving the proper
file number thereof. The recording of other
instruments relating to a recorded mortgage

part thereof.

shall be effected by way of annotations on the than thirty thousand pesos but does not
space provided therefor in the registration exceed one hundred thousand pesos, seventy-
book, after the same shall have been entered five pesos for the initial amount not exceeding

in the primary entry book. thirty-five thousand pesos, and seven pesos
for each additional five thousand pesos or
"The register of deeds shall also certify the
officer's return of sale upon any mortgage,
making reference upon the record of such

fractional part thereof.

officer's return to the volume and page of the than one hundred thousand pesos but does
record of the mortgage, and a reference of not exceed five hundred thousand pesos, one
such return on the record of the mortgage hundred and seventy-six pesos for the initial
itself, and give a certified copy thereof, when amount not exceeding one hundred ten
requested, upon payment of the lawful fees for thousand pesos, and ten pesos for each
such copy; and certify upon each mortgage additional ten thousand pesos or fractional part
officer's return of sale or discharge of
mortgage; and upon any other instrument
relating to such a recorded mortgage, both on

thereof.

the original and on the duplicate, the date, than five hundred thousand pesos, five
hour, and minute when the same is received hundred eighty-one pesos for the initial amount
for record and record such certificate with the not exceeding five hundred twenty thousand
return itself and keep an alphabetical index of pesos, and fifteen pesos for each additional
mortgagors and mortgagees, which record and twenty thousand pesos or fractional part

index shall be open to public inspection.
"Duly certified copies of such records and of

thereof: Provided, however, That registration of
the mortgage in the province where the
property is situated shall be sufficient
filed instruments shall be receivable as registration: And provided, further, That if the

evidence in any court.
"The register of deeds shall collect the

mortgage is to be registered in more than one
city or province, the register of deeds of the
city or province where the instrument is first
following fees for services rendered by him presented for registration shall collect the full

under this section:
"(a) For entry or presentation of any document

amount of the fees due in accordance with the
schedule prescribed above, and the register of
deeds of the other city or province where the
in the primary entry book, one peso. same instrument is also to be registered shall
Supporting papers presented together with the collect only a sum equivalent to twenty per
principal document need not be charged any centum of the amount of fees due and paid in
entry or presentation fee unless the party in the first city or province, but in no case shall

interest desires that they be likewise entered.
"(b) For filing and recording each chattel

the fees payable in any registry be less than

the minimum fixed in said schedule.
mortgage, including the necessary certificates "(c) For recording each instrument of sale,
and affidavits, the fees established in the conveyance, or transfer of the property which

following schedule shall be collected:
"1. When the amount of the mortgage does not

is subject of a recorded mortgage, or of the
assignment of mortgage credit, the fees
established in the preceding schedule shall be
exceed six thousand pesos, three pesos and collected on the basis of ten per centum of the
fifty centavos for the first five hundred pesos or amount of the mortgage or unpaid balance
fractional part thereof, and one peso and fifty
BANKING LAWS
FISCAL TAMBASACAN
thereof: Provided, That the latter is stated in

the instrument.
"(d) For recording each notice of attachment,

including the necessary index and annotations,

four pesos.
"(e) For recording each release of mortgage,

including the necessary index and references,
the fees established in the schedule under
paragraph (b) above shall be collected on the
basis of five per centum of the amount of the

mortgage.
"(f) For recording each release of attachment,

including the proper annotations, two pesos.
"(g) For recording each sheriff's return of sale,

including the index and references, three

pesos.
"(h) For recording a power of attorney,

appointment of judicial guardian, administrator,
or trustee, or any other instrument in which a
person is given power to act in behalf of
another in connection with a mortgage, three

pesos.
"(i) For recording each instrument or order

relating to a recorded mortgage, including the
necessary index and references, for which no

specific fee is provided above, two pesos.
"(j) For certified copies of records, such fees as

are allowed by law for copies kept by the

register of deeds.
"(k) For issuing a certificate relative to, or

showing the existence or non-existence of, an
entry in the registration book, or a document
on file, for each such certificate containing not
more than two hundred words, three pesos; if it
exceeds that number, an additional fee of fifty
centavos shall be collected for every one
hundred words or fractional part thereof, in
excess of the first two hundred words."


BANKING LAWS
FISCAL TAMBASACAN
X. REAL ESTATE MORTGAGE Twenty-eight hundred and sixty-six, and the

court shall, upon approval of the bond, order
LAW that a writ of possession issue, addressed to
ACT. 3135 the sheriff of the province in which the property
is situated, who shall execute said order

A. FORECLOSURE SALE
immediately.
“Section 8. The debtor may, in the proceedings
in which possession was requested, but not

later than thirty days after the purchaser was
given possession, petition that the sale be set
aside and the writ of possession cancelled,
specifying the damages suffered by him,
“IN all cases in which an extrajudicial sale is because the mortgage was not violated or the
made under the special power herein before sale was not made in accordance with the
referred to, the debtor, his successors in provisions hereof, and the court shall take
interest or any judicial creditor or judgment cognizance of this petition in accordance with
creditor of said debtor, or any person having a the summary procedure provided for in section
lien on the property subsequent to the one hundred and twelve of Act Numbered Four
mortgage or deed of trust under which the hundred and ninety-six; and if it finds the
property is sold, may redeem the same at any complaint of the debtor justified, it shall
time within the term of one year from and after dispose in his favor of all or part of the bond
the date of the sale; and such redemption shall furnished by the person who obtained
be governed by the provisions of sections four possession. Either of the parties may appeal
hundred and sixty-four to four hundred and from the order of the judge in accordance with
sixty-six, inclusive, of the Code of Civil section fourteen of Act Numbered Four
Procedure, in so far as these are not hundred and ninety-six; but the order of
possession shall continue in effect during the

inconsistent with the provisions of this Act.”
SECTION 2. The following three sections are

pendency of the appeal.
hereby inserted after section six of said Act “Section 9. When the property is redeemed
after the purchaser has been given

Numbered Thirty-one hundred and thirty-five:
“Section 7. In any sale made under the

possession, the redeemer shall be entitled to
deduct from the price of redemption any
provisions of this Act, the purchaser may rentals that said purchaser may have collected
petition the Court of First Instance of the in case the property or any part thereof was
province or place where the property or any rented; if the purchaser occupied the property
part thereof is situated, to give him possession as his own dwelling, it being town property, or
thereof during the redemption period, used it gainfully, it being rural property, the
furnishing bond in an amount equivalent to the redeemer may deduct from the price the
use of the property for a period of twelve interest of one per centum per month provided
months, to indemnify the debtor in case it be for in section four hundred and sixty-five of the
shown that the sale was made without violating Code of Civil Procedure.”
the mortgage or without complying with the
requirements of this Act. Such petition shall be
made under oath and filed in form of an ex
parte motion in the registration or cadastral
proceedings if the property is registered, or in
special proceedings in the case of property
registered under the Mortgage Law or under
section one hundred and ninety-four of the
Administrative Code, or of any other real
property encumbered with a mortgage duly
registered in the office of any register of deeds
in accordance with any existing law, and in
each case the clerk of the court shall, upon the
filing of such petition, collect the fees specified
in paragraph eleven of section one hundred
and fourteen of Act Numbered Four hundred
and ninety-six, as amended by Act Numbered

Banking Laws Prohibitions

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Banking Laws Prohibitions

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THE AWESOME NOTES

I. GENERAL BANKING LAW

NO DIRECTOR, OFFICER, EMPLOYEE OR

• make any false entries in any bank report

*** it shall keep the funds, securities and other

RELATIONSHIP CREATED BETWEEN BANK

loan or other credit accommodation

any director, officer, agent or employee

- examiner, officer or employee of the BSP; or

THE MAKING OF FALSE REPORTS

- shall employ casual and non-regular

prepared by: ronie ablan

prepared by: ronie ablan

prepared by: ronie ablan

D. ACQUISITION OF REALTY; RULE AND property, included on its total capital

SEC. 51: Ceiling on Investment in Certain

as shall be necessary for its own use

SEC. 52; Acquisition of real estate by way

ANY REAL PROPERTY ACQUIRED

BSP SHALL PROVIDE POLICY

FOR THIS PURPOSE

prompt corrective action

prepared by: ronie ablan

SEC. 8: Requisites for organization of

and capital base.

SEC. 14: REQUISITES FOR

REQ: FOR THE ISSUANCE OF

foreign individuals and non-bank corporations

***this rules shall apply to all Filipinos and

THE PERCENTAGE OF FOREIGN-OWNED

***the citizenship of the corporation

deposits and public interest.

REQ: FOR REGISTRATION OF BY-

certificate of authority from BSP

prepared by: ronie ablan

SEC. 12: STOCKHOLDINGS IF FAMILY

FIT AND PROPER RULE

SHOULD MB FINDS A DIRECTOR

same group of persons

SEC. 13: CORPORATE STOCKHOLDINGS

SEC. 17: DIRECTORS OF MERGED OR

NON-FILIPINO CITIZEN MAY BECOME A

MEETINGS OF BOD; MANNER

prepared by: ronie ablan

MB MAY REGULATE (to protect the funds of

UB AND CB MAY OPEN BRANCHES OR

BRANCHING BY ALL OTHER BANKS

A BANK, subject to prior approval of he MB,

BUT ONLY IN EXCEPTIONAL CASES

A BANK AUTHORIZED TO ESTABLISH

condition. - as though such business had

*** a bank and its branches and offices

prepared by: ronie ablan

G. LOAN LIMITATIONS; SBL; DOSRI;

1. direct liability of the

the total of the unimpaired paid-in NOTE:

REQ: WHEN IT MAY BE INCREASED BY

by insurance. 3. the subsidiaries, through separate

prepared by: ronie ablan

specify as non-risk items

BUT SHALL INCLUDE (AS TO THE LIMIT)

prepared by: ronie ablan

NO DIRECTOR OR OFFICER OF ANY BANK

certificate of authority from BSP 