Capital Stock and Government Subscription
- Capital stock fixed at 20 million pesos divided into 200,000 shares at 100 pesos each.
- Payment for shares is staggered with specific deadlines from 1917 to 1921.
- Government must purchase 101,000 shares at par.
- 99,000 shares offered to the public with restrictions to maintain government majority ownership.
Government Purchase and Appropriations
- Appropriations totaling several million pesos, from the Insular Treasury and specific sinking funds, to cover government share purchases.
- Continuing appropriations for additional investments in bank stock yearly until 1921.
- Government voting power in purchased stock vested solely in the Governor-General.
Transfer and Abolition of Government Agricultural Bank
- Assets and liabilities of the Government Agricultural Bank transferred to PNB.
- Transfer credited as part payment for government subscription.
- Agricultural Bank abolished upon PNB inauguration.
Loan Provisions and Agricultural Focus
- Loans on real estate mortgages limited to 50% of capital and surplus and 60% of appraised land value.
- Loans for agricultural purposes with security and purpose restrictions.
- Loans up to 30% of capital and surplus for agricultural, industrial, or commercial promissory notes with max maturity of 120 days.
- Loans up to 20% of capital and surplus on any bankable paper not covered under other loans.
- Preference given to loans promoting agriculture.
- Authority to make loans on harvested/stored crops and standing crops with insurance and security requirements.
Real Estate Bonds and Circulating Notes
- Authorization to issue real estate bonds up to 90% of real estate loans.
- Bonds engraved, signed by bank officials, payable in U.S. gold coin or Philippine lawful money.
- Bonds are tax-exempt and serve as government-accepted security.
- Bonds subject to redemption by lot with premium if redeemed early.
- Authorization to issue circulating notes backed by securities and gold coin.
- Circulating notes exempt from taxes and receivable for government dues.
Deposit and Banking Business
- PNB authorized and obligated to receive deposits from governmental entities and private persons.
- Interest on deposits capped at 4% per annum.
- Governor-General may authorize deposits in other banks if in public interest.
Management and Governance
- Board of Directors composed of president, vice-president, and five elected members.
- President is chief executive, appointed by the Governor-General with legislative consent.
- President empowered to make loans under specified limits and report to the board.
- Officers and employees appointed by the president with board approval for certain positions.
- Officers and employees not subject to Civil Service Law.
- Bonds required from president, vice-president, directors, and employees as fidelity security.
- Attorney-General serves as bank attorney but may employ others.
- Insular Auditor serves as bank auditor with periodic reports.
Inspection and Confidentiality
- Bank subject to periodic inspection for solvency by Insular Treasurer.
- Prohibition on certain government officials from owning stock or incurring indebtedness to the bank.
- Confidentiality of inspection and deposit information mandated, limited disclosure.
Terms of Office and Elections
- President and vice-president serve six-year terms with salary conditions.
- Five board members serve one-year terms and receive per diems.
- Annual stockholder meetings for election of directors.
Branches and Agencies
- Authorization to establish up to two branches in the United States with functions related to fund handling and business with Federal Reserve Banks.
- Establishment of branches in provincial capitals and municipalities as needed.
- Branch officers appointed, bonded, and subject to removal.
- Branches must report transactions daily to Manila.
Loan Restrictions and Prohibitions
- No mortgage loans exceeding 50,000 pesos or other loans exceeding 300,000 pesos to individuals or entities.
- Exception for loans taken over from private banks with government funds under specified conditions.
- Prohibition on loans to directors, branch agents, members of the Legislature, and government officials without real estate security.
Real Estate and Warehouse Operations
- Authority to purchase and hold real estate for banking operations and debt collection.
- Real estate acquired through debt collection must be sold within three years.
- Authorization to erect bonded warehouses for pledged goods in strategic locations.
Redemption and Sale of Foreclosed Property
- Mortgagors have one year to redeem foreclosed property by paying court-fixed amount plus costs and interest.
- Bank may sell depreciated securities after notice and public auction without judicial process.
- Bank can seek deficiency payments from debtors after sale.
Anti-Forgery and Fee Provisions
- Forgery of bank notes and bonds penalized under relevant Acts.
- Prohibition of fees or commissions for obtaining loans; violations punishable under the Act.
Profit Distribution and Government Shares
- Semi-annual profit allocation: 50% to reserve, 50% to dividends.
- Dividend cap at 12% per annum on paid capital.
- Surpluses transferred to undivided profits.
- Dividends on government shares paid into Insular Treasury.
Legal Existence and Name Restrictions
- Bank's legal life fixed at 50 years, renewable for an additional 50 by legislation.
- Prohibition on use of "national" in names of other banking entities without lawful exemption.
- Penalties for unlawful use of "national" in bank names.
Additional Provisions
- Temporary detailing of government employees to assist bank organization with reimbursement.
- Board authorized to adopt regulations consistent with the Act and Corporation Law.
- Repeal of inconsistent Acts and provisions.
- Penalties for violations: fines up to 10,000 pesos, imprisonment up to five years, or both.
- Act effective immediately upon passage.