Question & AnswerQ&A (Republic Act No. 4093)
The official short title is "The Private Development Banks' Act."
The policy is to promote and expand the country's economy by encouraging the establishment of private development banks to provide capital for medium and long-term loans to Filipino entrepreneurs, especially in agriculture and industry.
A private development bank must be organized as a stock corporation under the General Banking Act for mortgage banks.
The minimum paid-up capital for a Class A private development bank is four million pesos.
At least sixty percent of the capital stock subscribed by the private sector must be owned by citizens of the Philippines.
Seventy-five percent of loanable funds must be invested in medium and long term loans for economic development purposes.
It can subscribe to preferred shares in private development banks, extend loans repayable in ten years with interest, and provide rediscounting facilities, among other forms of assistance.
They may be fined up to two thousand pesos, imprisoned for up to one year, or both, at the discretion of the court.
The Central Bank may give loans against acceptable assets of the private development bank upon approval by a concurrent vote of the Monetary Board members when a financial crisis is imminent.
Yes, they are totally exempted for three years from the effectivity of the Act, after which a gradual taxation scheme applies for four years before full taxation is imposed.
Every individual handling funds or securities amounting to one thousand pesos or more per year must be covered by an adequate bond as determined by the Monetary Board, with possible bonding for others as provided by the bank's by-laws.
It is prohibited to use the words 'Development Bank' as part of the name or title unless organized under this Act or RA 2081, with fines imposed for violations.