Amendments to Rural Banks Act Provisions

No Rural Bank can operate without a Certificate of Authority issued by the Monetary Board of the Central Bank.
Rural Banks must be organized as stock corporations.
Cooperatives that are duly established may organize a Rural Bank or subscribe to shares in any Rural Bank.
Capital stock of any Rural Bank must be 100% owned and held, directly or indirectly, by Filipino citizens.
If private subscription for capital stock is insufficient, the Development Bank of the Philippines (DBP) may subscribe to a matching amount, not exceeding one million pesos.
Shares subscribed by DBP may be sold at par anytime to Filipino private individuals.
Registered stockholders have pre-emptive rights on share sales within five years proportional to their holdings; preference goes to residents of the locality where the Rural Bank is situated.
All members of the Board of Directors must be Filipino citizens.

Loans or advances by Rural Banks are primarily intended to meet the credit needs of small farmers (owning or cultivating not more than fifty hectares) and small merchants (capital investment not exceeding twenty-five thousand pesos).
Preference is given to small farmers and merchants with small cash requirements.
Loans may be granted on lands without Torrens titles provided ownership and possession requirements are met (e.g., 5+ years of continuous possession).
Loans can be granted on various types of lands such as friar lands, estates administered by governmental agencies, homesteads, and free patent lands pending title issuance under specified conditions.
Appraisal and verification of land status is the sole responsibility of the Rural Bank; loans on land later found to be in the forest zone are the bank's sole risk.

Foreclosure of mortgages for loans not exceeding three thousand pesos is exempt from newspaper publication; posting notices in three conspicuous local public places for 60 days suffices.
Proof of publication is by sheriff's affidavit and must be included in court records.
Homesteaders or free patent holders and their heirs have a two-year redemption right from foreclosure date (or registration date for Torrens titles).
Borrowers who are tenants may offer their share of produce as security.

The DBP may provide supplemental capital equal to private shareholders' equity up to one million pesos upon Monetary Board certification of need.
Stock issued to DBP is preferred regarding assets on liquidation, non-voting, and limited to 2% dividend participation.
DBP shares may be retired or converted to common stock upon accumulation of sufficient capital or private investment replacement.
Private shareholders have pre-emptive rights to purchase DBP shares within five years.

Rural Banks may act as official depositories for municipal, city, or provincial funds within their locality upon Monetary Board authorization.
This is subject to limitations for protection of public funds as provided under relevant laws.

Rural Banks with net assets up to one million pesos (excluding government counterpart capital) are exempt from all taxes, charges, and fees.
If net assets exceed one million pesos, taxes are levied proportionally on the excess.
If net assets exceed three million pesos, the Rural Bank pays all taxes like other banks.

Justices of the peace, as notaries ex-officio, must administer oaths or acknowledge instruments for Rural Banks and borrowers free of charge for loans or transactions not exceeding three thousand pesos.
Registers of deeds must accept registration of such instruments free of all charges, fees, and documentary stamp taxes for amounts up to three thousand pesos.
Charges apply only to amounts exceeding three thousand pesos.
For consolidated mortgage assignments, fees are levied only on amounts exceeding three thousand pesos per mortgage consideration.

The amendments take effect upon approval, ensuring immediate implementation of the provisions.