Creation of Agricultural and Industrial Bank

Bank recognized as a body corporate.
Powers include granting agricultural, industrial, and real estate loans.
Authority to operate bonded warehouses.
Power to subscribe, underwrite, purchase, or guarantee bonds from agricultural or industrial concerns.
Manage funds and properties from the National Investment Board.
Issuance of bonds, accept savings/time deposits, and make corporate bylaws.
May buy, sell, lease, mortgage properties and appoint employees.
Legal capacities to sue, be sued, and exercise business powers reasonably necessary.

Capital stock at ₱150 million, fully subscribed by the Government.
One hundred fifty thousand shares at ₱1,000 par value each.
Voting power over shares vested in the President or his designate.
Payment from excise tax on oil; ₱25 million upon subscription, remainder upon Board call and Treasury certification.
Annual payment calls capped at ₱15 million.

Agricultural loans secured by real estate mortgages, max 60% of appraised value including improvements.
Loan maturity between one and thirty years, payable lump sum or installment.
Industrial loans secured by mortgages or deeds of trust on industrial assets, also max 60% market value.
Loan applications under oath, detailing real estate/assets, appraised value, and loan purpose.
Use of loan proceeds restricted strictly to declared purposes; violation leads to contract rescission and foreclosure, alongside criminal liability.

Agricultural and Industrial Bank inherits powers, duties, assets, liabilities, and trusts from the National Investment Board.
National Investment Board abolished upon bank operations commencement.

Authorized to act as trustee for mortgages or bonds issued by municipalities or corporations.
May accept and execute municipal or corporate trusts consistent with law.

Authorized to issue real estate bonds with face value ≥ ₱25, up to 90% of real estate loans.
Real estate securities deposited with the Treasurer with certification ensuring bond backing.
Rights of bondholders protected from adverse legal changes.
With presidential approval, may issue debenture bonds backed by the government.
Bonds signed, engraved, authenticated; payable in Manila with semi-annual interest.
Bonds accepted as securities by Insurance Commissioner and for government transactions.
Bonds exempted from all Philippine taxes.
Board resolution and presidential approval govern bond issuance terms.
Bonds redeemable at par, with redemption by lot and premium provisions.
Interest payments may be made at branches or US agencies.
Authorized to guarantee bonds of companies for agricultural, industrial, or commercial purposes, subject to presidential approval.

Authorized to act as agents for other banks and handle loans, bonds, and share subscriptions.
May receive savings and time deposits.
Deposits invested only in loans secured by real estate or government bonds with strict appraisals and limitations.

Non-Torrens titled real property accepted if possession, improvements, and tax payment meet a 10-year rule.
Loan securities exempt from attachment until all debts to the Bank are fully settled.

Limit liabilities to 15% of Bank’s unimpaired capital per borrower, except government instruments.
Bank may demand additional securities, declare loans due upon default, and sell securities with notice.
Mortgages may be foreclosed judicially or extra-judicially under prescribed procedures.
Provisions for sale expenses, application of proceeds, and debtor deficiency rights.

Mortgagors have one year to redeem property after sale by paying indebtedness plus interest.
Bank may own real estate up to 10% of paid-up capital.
Real estate acquired in debt collection must be sold within five years.

Bank required to maintain statutory deposit reserves.
Withdrawal of capital forbidden during banking operations.
Dividends limited to net profits, with provisions for loss coverage and bad debt classification.
Net profits apportioned semi-annually: 50% to reserve, 50% dividends capped at 12% annually.
Surplus after reserve and dividends goes to undivided profits.

Seven-member Board appointed by the President with Assembly consent.
Directors receive per diem unless government officials.
Eligibility excludes directors/employees of private banks.
Annual appointments and internal organization with Chairman and Vice-Chairman.
Powers include fixing interest rates, establishing branches, and staffing recommendations.

Branches exercise conferred powers and report to central Manila office.
Officers and employees appointed and removable by Board upon General Manager’s recommendation.
Provincial/municipal treasurers may be appointed as Bank agents with added compensation and subject to removal.

General Manager is chief executive, assisted by one or more Assistant General Managers.
Appointment and removal by Board and presidential approval.
Powers include granting loans up to ₱50,000 with Board reporting, contract negotiation, weekly reporting, and compliance with government requests.

Auditor-General serves as ex-officio auditor, appoints representative and staff.
Auditing expenses borne by Bank.
Quarterly reports on Bank’s financial condition submitted to government and Board.

Secretary of Justice is ex-officio attorney; may delegate to Solicitor-General or fiscals.
Board with Secretary approval may employ additional attorneys.

Bank subject to supervision by Bank Commissioner per Administrative Code.
Officers inspecting Bank must keep investigations confidential, disclosing only to top officials or court order.

Officers/employees and supervising officials prohibited from borrowing, guaranteeing, or becoming obligors on Bank loans.
Violations result in removal, imprisonment (up to 5 years), and fines (₱1,000 to ₱5,000).
Loans to corporations where Board members have interest require unanimous, excluding interested member, Board approval.
Liability to such corporations capped at 5% of paid-up capital.
Prohibition against fees or commissions for loan procurement, with fines and imprisonment for violations.
False information for loans or negligence by Bank employees in detecting same punishable by imprisonment and fines based on loan amount.
Violations of Act not specifically covered in prior sections punished by fines up to ₱10,000 or imprisonment up to 5 years, or both.

Agricultural and Industrial Bank evolved into the Rehabilitation Finance Corporation, now the Development Bank of the Philippines, as amended by subsequent laws.