QuestionsQuestions (Republic Act No. 337)
The short title is “The General Banking Act.”
If the entity engages in lending of funds obtained from the public through receipt of deposits or through sale of bonds, securities, or obligations, and does so regularly, it is considered a banking institution (and “bank” and “banking institution” are synonymous/interchangeable in this Act).
Persons/entities that receive deposits only occasionally are not considered banks, though they remain subject to regulation by the Monetary Board. However, the Central Bank may not authorize drawing checks against deposits not maintained in banks or their branches/agencies.
Doubts are decided by the Monetary Board, subject to judicial review. The Board may also order examinations/inspections/investigations via the Superintendent of Banks of the person’s/entity’s books and records.
Non-authorized persons/entities cannot advertise or hold themselves out as banks or use “bank/banking/banker/building and loan association/trust corporation/trust company” or similar words, cannot solicit or receive deposits for deposit/disbursement/safekeeping, and cannot transact banking business—unless they complied with the Act. Officers and directors of a corporation committing a violation are jointly and severally liable.
A fine of five hundred pesos for each day the violation continues or is repeated; in default of payment, subsidiary imprisonment as prescribed by law.
They must be organized in the form of stock corporations.
No banking institution shall issue no-par value stock.
No. SEC cannot register unless accompanied by a certificate of authority from the Monetary Board under its official seal.
It must be satisfied that: (a) existing legal requirements have been complied with; (b) public interest and economic conditions justify authorization; and (c) the capital, organization, direction/administration, and integrity/responsibility of organizers and administrators reasonably assure the safety of public interests.
No. SEC cannot register bank by-laws (or amendments) unless accompanied by a Monetary Board certificate stating they are in accordance with law.
No bank may receive deposits unless incorporated under the laws of the Republic of the Philippines.
The prohibition does not apply to branches/agencies of foreign banks that were actually receiving deposits at the time the Act was approved.
Section 12: at least 60% of capital stock must be owned by Filipino citizens. Section 13: at least two-thirds of board members must be Filipino citizens.
It must obtain a license upon order of the Monetary Board from the SEC (before transacting business or suing to recover debts/claims). The SEC issues the license only after Monetary Board justification.
A corporation which accepts or creates demand deposits subject to withdrawal by check.