Question & AnswerQ&A (Republic Act No. 7906)
The official title of Republic Act No. 7906 is the "Thrift Banks Act of 1995."
Thrift banks include savings and mortgage banks, private development banks, stock savings and loans associations organized under existing laws, and any banking corporation organized to accumulate savings, invest in bonds, mortgages, securities, extend personal and business loans, and provide various financial services especially for small and medium enterprises.
The State aims to recognize the private sector's role, promote economic development, encourage establishment and assistance of thrift banks to support agriculture and industry, encourage savings, and regulate thrift banks to ensure their sound and efficient operation.
A thrift bank must be organized in the form of a stock corporation.
The Monetary Board of the Bangko Sentral ng Pilipinas must issue a certificate of authority approving the organization and establishment of a thrift bank.
At least a majority of the members of the board of directors must be citizens of the Philippines.
At least forty percent (40%) of the voting stock must be owned by Filipino citizens.
The direct indebtedness to thrift banks of any borrower shall not exceed fifteen percent (15%) of the bank's unimpaired capital and surplus, excluding certain loans. An additional fifteen percent (15%) may be allowed for financing housing, subdivision, agriculture, fully secured.
They are subject to a fine of not more than Ten thousand pesos (P10,000), or imprisonment from six (6) months to ten (10) years, or both, at the court's discretion.
Thrift banks are exempt from all taxes, fees, and charges except corporate income taxes and local taxes, for a period of five (5) years from the date of commencement of operations or effectivity of the Act for existing banks.
The Monetary Board can set credit limits, impose accounting standards, conduct audits and surveys, provide technical assistance, enforce laws and regulations, and appoint conservators if needed.
Yes, subject to Monetary Board approval, they may publish their statements in newspapers or post them in conspicuous public places where the bank operates.
Yes, provided the thrift bank has net assets of at least Twenty million pesos (P20,000,000) and follows guidelines established by the Monetary Board.
Total investments in equities shall not exceed 25% of the thrift bank's net worth, investment in any single enterprise is limited to 15% of net worth, and the investment must remain a minority holding.
Minors can make deposits and withdrawals, and receive interest and dividends in their own name, unless a guardian gives written notice to withhold payments to the minor.