1986 Revised Charter of Philippine National Bank

PNB continues as a corporate entity under this Revised Charter.
Principal office located in Metro Manila.
May open branches, agencies, or offices in the Philippines or abroad subject to Board and Monetary Board approval.

Engages in commercial and expanded banking functions.
Prioritizes banking services supporting agriculture, SMEs, export development, and government entities.
Authorized to accept foreign deposits and operate foreign currency deposit units.
Can administer trusts and act as official government depository.
Holds general corporate powers under existing banking and corporation laws.

Priority lending to agricultural and small/medium enterprises, especially in rural areas.
Loans limited as per applicable laws, with aggregate loans to government entities capped relative to government deposits and shareholdings.
Equity investments governed by existing laws, limiting types and amounts.

Capital stock set at 10 billion pesos divided into 100 million common shares with 100 pesos par value.
Government subscribes 25 million shares valued at 2.5 billion pesos as payment through net asset values.
Private investors may subscribe subject to banking laws and presidential approval if shares exceed one-third or result in private majority.
Board authorized to convert unissued common shares to preferred non-voting shares.

Transfer of majority voting shares to private investors triggers submission of amended Articles of Incorporation and by-laws.
Charter ceases and Bank becomes a private entity subject to general banking laws.
Withdrawal of special government privileges and removal from government corporate coverage.
Change of ownership must be publicly disclosed.

Government stock voting rights vested in the President of the Philippines or designated representative.

Nine members elected annually, serving one-year terms.
Chairman appointed by the President; President of the Bank serves as Vice-Chairman.
Members paid per diem with monthly cap.
Qualifications include Philippine citizenship, minimum age, moral character, and expertise in relevant fields.
Restrictions on government employees serving as directors and prohibition of directors/officers of other banks.

Chief Executive Officer elected from the Board with President of the Philippines’ consent.
Qualifications include age, moral character, banking experience, and expertise.
Executes Board policies, supervises operations, contracts, personnel decisions, and reports on Bank performance.
May delegate powers with Board approval.

Bank maintains a Legal Department headed by a Board-appointed chief.
May deputize legal staff as Special Sheriffs for court writs enforcement with court approval.

Commission on Audit serves as ex-officio auditor with a designated representative.
Board sets up organizational structure and staff remuneration.
Civil Service Law protections apply to Bank personnel.

Subject to Central Bank of the Philippines’ supervision and examination.
Board members must abstain from meetings where they have personal interest, documented in minutes.

Officers and employees prohibited from disclosing details of individual accounts except by law or court order.
Allows exchange of confidential credit information among financial institutions as permitted by law.

Directors, officers, employees, and their relatives restricted from borrowing or guaranteeing loans from PNB.
Loans to supervisory or regulatory officials over PNB are prohibited.
Prohibits charging fees or commissions related to obtaining loans.
Violations subject to penalties.

Properties acquired through debt collection or foreclosure must be disposed of within five years following Board policies.

Mortgagors have one year from foreclosure sale registration to redeem by paying principal, interests, and expenses.
Bank may possess foreclosed property during redemption period and retain fruits as compensation without needing to post bond.

At least 50% of net profits allocated to earned surplus.
Remaining profits may be declared as dividends to government and private shareholders in cash or stock.
Government dividends first used to retire government securities then remitted to the Treasury.

Bank’s legal existence set for 50 years from effective date.
Applicable banking laws apply unless inconsistent.
Violations by directors, officers, employees, or accomplices punishable by fines or imprisonment.

Preparatory measures include financial condition assessment and share exchange maintaining government-private share ratio.
Transfer of assets and liabilities to National Government to rehabilitate bank and establish viable operations.
Operations under revised charter commence January 1, 1987, or later as determined.
Transitional loans and liabilities exceeding limits to be reduced within prescribed period.
Reorganization and reduction in workforce authorized with completion deadlines.
Incumbent Board and President continue unless replaced; new internal structure and staffing patterns established.
Personnel have no vested rights to positions post-reorganization.
Recalled personnel from other government agencies; new appointments regulated.
Separation benefits guaranteed under existing and supplementary plans.
Legal actions related to transitional matters barred unless Civil Service Commission remedies exhausted.

Repeals conflicting provisions of previous laws including Presidential Decree 694.
Invalidity of any provision does not affect others.
Charter effective upon approval by the President.