Question & AnswerQ&A (Act No. 2612.)
The bank created under Act No. 2612 is known as the Philippine National Bank, whose principal domicile and place of business is in the city of Manila.
The Philippine National Bank has powers to prescribe its by-laws, adopt and use a seal, make contracts, sue and be sued, exercise powers granted by the Act and incidental powers necessary for banking, and exercise general powers under the Corporation Law consistent with the Act.
The capital of the National Bank is twenty million pesos divided into two hundred thousand shares valued at one hundred pesos each, with specific payment schedules for shares subscribed before and after January 31, 1917.
Shares shall not be sold to the public if such sale results in private investors holding capital stock equal to or exceeding the government’s share.
The government of the Philippine Islands is mandated to purchase one hundred and one thousand shares at par, no later than January 31, 1917.
The National Bank can loan up to 50% of its capital and surplus on notes secured by real estate mortgages with loans not exceeding 60% of the appraised value of the land, with mortgages payable over one to thirty years for the promotion of agriculture.
Violations involving forged notes and bonds in imitation of the National Bank's securities are subject to penalties under Act Numbered 1754 and its amendments.
The National Bank is prohibited from granting loans to its directors and branch agents, and loans exceeding one thousand pesos to any member of the Philippine Legislature or government official without satisfactory real estate security.
Violators of any provision of the Act are subject to a fine not exceeding ten thousand pesos, imprisonment not exceeding five years, or both.
Net profits are apportioned semiannually with 50% going to reserves and 50% distributed as dividends to shareholders, with dividends not exceeding 12% per annum of paid-up capital.
The affairs are managed by a board of directors consisting of the president, vice-president, and five elected members. The president serves as chief executive and chairman, with key managerial and reporting duties.
The president must furnish a bond of at least two hundred and fifty thousand pesos; the vice-president one hundred thousand pesos; and each director ten thousand pesos. Other officers and employees must furnish fidelity bonds as prescribed.
Yes, the National Bank may establish up to two branches or agencies in the United States for specified functions involving funds transmission and banking business under U.S. law.
Yes, loans up to 70% of the market value of harvested and stored crops can be made, provided the crops are insured for their full market value and the mortgagor agrees to furnish additional security or refunds if crop value diminishes.