A
collection of Philippine laws, statutes and codes
not
included or cited in the main
indices
of
theChan Robles Virtual Law Library
This page features the full text of
Batas Pambansa Bilang 65
AN
ACT AMENDING FURTHER REPUBLIC ACT NUMBERED SEVEN HUNDRED TWENTY, AS
AMENDED,
OTHERWISE KNOWN AS THE "RURAL BANKS' ACT"
chan
robles
virtual law library
BATAS
PAMBANSA BILANG 65AN
ACT AMENDING FURTHER REPUBLIC ACT NUMBERED SEVEN HUNDRED TWENTY, AS
AMENDED,
OTHERWISE KNOWN AS THE "RURAL BANKS' ACT"chan
robles
virtual law library
chan
robles virtual law librarySection
1. Section 3 of Republic
Act No. 720, as amended, is hereby further amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library
"Sec.
3. In furtherance of this
policy, the Monetary Board of the Central Bank of the Philippines shall
formulate the necessary rules and regulations governing the
establishment
and operation of Rural Banks for the purpose of providing adequate
credit
facilities to farmers or merchants, or to cooperatives of such farmers
or merchants and, in general, to the people of the rural communities,
and
to supervise the operation of such banks."chanrobles virtual law library
Sec.
2. Section 4 of Republic
Act No. 720, as amended, is hereby further amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library
"Sec.
4. No Rural Bank shall
be operated without a Certificate of Authority of the Monetary Board of
the Central Bank. Rural Banks shall be organized in the form of stock
corporations.
Duly established cooperatives and corporations primarily organized to
hold
equities in Rural Banks may organize a Rural Bank and/or subscribe to
the
shares of stock of any Rural Bank subject to such rules as the Monetary
Board may prescribe. With the exception of shareholdings of
corporations
organized primarily to hold equities in Rural Banks as provided for
under
Section 12-C of Republic Act No. 337, as amended, and of
Filipino-controlled
domestic banks, the capital stock of any Rural Bank shall be owned and
held directly or indirectly by citizens of the Philippines. If
subscription
of private shareholders to the capital stock of a Rural Bank cannot be
secured or is not available, or is insufficient to meet the normal
credit
needs of the locality, the Development Bank of the Philippines, on
representation
of the said private shareholders, and upon approval of the Monetary
Board
of the Central Bank, shall subscribe to the capital stock of such Rural
Bank, which shall be paid in full at the time of subscription, in an
amount
equal to the fully paid subscribed capital of the private shareholders
but not exceeding one million pesos or such amount as the Monetary
Board
may prescribe as may be necessary to promote and expand rural economic
development: Provided, however, That such shares of stock subscribed by
the Development Bank of the Philippines may be sold at any time at par
to private individuals who are citizens of the Philippines: Provided,
finally,
That in the sale of shares of stock subscribed by the Development Bank
of the Philippines, the registered stockholders shall have the right of
pre-emption within one year from the date of offer in proportion to
their
respective holdings, but in the absence of such buyer, preference,
however,
shall be given to residents of the locality or province where the Rural
Bank is located.chanrobles virtual law library
"All
members of the Board of Directors of the Rural Bank shall be citizens
of
the Philippines: Provided, however, That no appointive or elective
official,
whether full-time or part-time, shall at the same time serve as officer
of any Rural Bank except in cases where such service is incident to
financial
assistance provided by the Government or a government-owned or
controlled
corporation to the bank."chanrobles virtual law library
Sec.
3. Section 5 of the same
Act is hereby amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library
"Sec.
5. Loans or advances extended
by Rural Banks organized and operated under this Act shall be primarily
for the purpose of meeting normal credit needs of farmers or farm
families
owning or cultivating land dedicated to agricultural production as well
as the normal credit needs of cooperatives and merchants. In the
granting
of loans, the Rural Bank shall give preference to the application of
farmers
and merchants whose cash requirements are small.chanrobles virtual law library
"Loans
may be granted by Rural Banks on the security of lands without Torrens
titles where the owner of private property can show five years or more
or peaceful, continuous and uninterrupted possession in concept of
owner;
or of portions of friar land estates or other lands administered by the
Bureau of Lands that are covered by sales contracts and the purchasers
have paid at least five years installment thereon, without the
necessity
of prior approval and consent by the Director of Lands; or of portions
of other estates under the administration of the Ministry of Agrarian
Reform
or other government agency which are likewise covered by sales
contracts
and the purchasers have paid at least five (5) years installment
thereon,
without the necessity of prior approval and consent of the Ministry of
Agrarian Reform or corresponding governmental agency; or of homestead
or
free patent lands pending the issuance of titles but already approved,
the provisions of any law or regulations to the contrary
notwithstanding:
Provided, That when the corresponding titles are issued the same shall
be delivered to the register of deeds of the province where such lands
are situated for the annotation of the encumbrance: Provided, further,
That in the case of lands pending homestead or free patent titles,
copies
of notices for the presentation of the final proof shall also be
furnished
the creditor rural bank and, if the borrower-applicant fail to present
the final proof within thirty (30) days from date of notice, the
creditor
rural bank may do so for them at their expense; Provided, furthermore,
That the applicant for homestead or free patent has already made
improvements
on the land and on the loan applied for is to be used for further
development
of the same or for other productive economic activities: Provided,
finally,
That the appraisal and verification of the status of a land is a full
responsibility
of the Rural Bank and any loan granted on any land which shall be for
the
sole account of the Rural Bank to the exclusion of the Central Bank
counterpart.
"The
foreclosure of mortgages covering loans granted by Rural Banks and
executions
of judgments thereon involving real properties levied upon by a sheriff
shall be exempt from the publications in newspapers now required by law
where the total amount of loan, including interests due and unpaid,
does
not exceed Ten Thousand Pesos (P10,000.00) or such amount as the
Monetary
Board may prescribe as may be warranted by prevailing economic
conditions.
It shall be sufficient publication in such cases if the notices of
foreclosure
and execution of judgment are posted in the most conspicuous area of
the
Municipal Building, the Rural Bank and the Barangay Hall where the land
mortgaged is situated during the period of sixty days immediately
preceding
the public auction or execution of judgment. Proof of publications as
required
herein shall be accomplished by affidavit of the sheriff or officer
conducting
the foreclosure sale or execution of judgment and shall be attached
with
the records of the case: Provided, That when a homestead or free patent
land is foreclosed, the homesteader or free patent holder, as well as
his
heirs shall have the right to redeem the same within two years from the
date of foreclosure in the case of land not covered by a Torrens title
or two years from the date of registration of the foreclosure in the
case
of land covered by a Torrens title: Provided, finally, That in the case
of borrowers who are mere tenants, the produce corresponding to their
share
may be accepted as security."chanrobles virtual law library
Sec.
4. Section 7 of the same
Act is hereby amended to read as follows: chanrobles virtual law library
"Sec.
7. To provide supplemental
capital to any Rural Bank until it has accumulated enough capital of
its
own or stimulate private investments in Rural Banks, the Development
Bank
of the Philippines shall, upon certification of the Monetary Board
which
shall be final, of the existence of such need, subscribe within thirty
days to capital stock of any Rural Bank from time to time in an amount
equal to the total equity investment of the private shareholders, which
shall be paid in full at the time of subscription but not exceeding one
million pesos or such amount as the Monetary Board may prescribe as may
be necessary to promote and expand rural economic development.
Provided,
however, That shares of stock issued to the Development Bank of the
Philippines,
pursuant to this section, may at any time, be paid off at par and
retired
in whole or in part if, in the opinion of the Monetary Board, the Rural
Bank has accumulated enough capital strength to permit retirement of
such
shares: or if an offer is received from private sources to replace the
equity investment of the Development Bank of the Philippines with an
equivalent
investment or more in the equity of such Bank. In case of such
retirement
of stock of replacement of equity investments of the Development Bank
of
the Philippines, the registered private shareholders of the Rural Bank
shall have the right of pre-emption within one year from date of offer
in proportion to their respective holdings.chanrobles virtual law library
"Stock
held by the Development Bank of the Philippines, under the terms of
this
section, shall be made preferred only as the assets upon liquidation
and
without the power to vote and shall share in the dividend distributions
not exceeding two percent thereof without preference: Provided,
however,
That if such stock of the Development Bank of the Philippines be
converted
into common stock of the class provided for in section nine: Provided,
further, That pending the amendment of the Articles of Incorporation of
the Rural Bank, if necessary, for the purpose of reflecting the
conversion
into common stock of preferred stock sold to private shareholders, the
transfer shall be recorded by the Rural bank in the stock and transfer
book and such shareholders shall thereafter enjoy all the rights and
privileges
of common stockholders. The preferred stock so transferred shall be
surrendered
and cancelled and the corresponding common stocks shall be issued.chanrobles virtual law library
"The
corporate secretary of the Rural Bank shall submit to the Central Bank
and the Securities and Exchange Commission a report on every transfer
of
preferred stock to private shareholders, and such report received by
the
Securities and Exchange Commission shall form part of the corporate
records
of the Rural Bank. When all the preferred shares of stock of a Rural
Bank
have been sold to private shareholders, the Articles of Incorporation
of
the Rural Bank shall be amended to reflect the conversion of the
preferred
shares of stock into common stock. For this purpose the President, the
corporate secretary, and a majority of the Board of Directors shall
issue
a certificate that all preferred shares have been sold and transferred
to private shareholders which, together with a copy of the Articles of
Incorporation, as amended, duly certified correct by the said
President,
corporate secretary, and a majority of the Board of Directors, shall be
filed with the Securities and Exchange Commission, which shall attach
the
same to the original Article of Incorporation on file with said office.chanrobles virtual law library
"The
Securities and Exchange Commission shall not register the amended
articles
of incorporation unless accompanied by the certificate of authority
required
under Section nine of the Republic Act Numbered Three Hundred and
Thirty-seven,
as amended."
Sec.
5. Section 9 of the same
Act is hereby amended to read as follows:chanroblesvirtuallawlibrary
"Sec.
9. Stock preferred as to
assets upon liquidation shall be issued to represent the contributions
to capital stock of the Rural Bank by the Government through the
Development
Bank of the Philippines, and by qualified persons under such terms and
conditions as the Monetary Board may prescribe. The powers of the
Monetary
Board over Rural Banks shall extend to prescribing the amount, value
and
class of stock issued by any Rural Bank, organized under this Act."chanrobles virtual law library
Sec.
6. Section 11 of the same
Act is hereby amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library
"Sec.
11. In addition to the
operations specifically authorized in this Act, any Rural Bank may
perform
the following services:
"(a) Accept
savings and time deposits;
"(b) Act
as correspondent for other financial institutions;chanrobles virtual law library
"(c) Act
as a collection agent;chanrobles virtual law library
"(d) Offer
other banking services as provided in Section 72 of Republic Act No.
337,
as amended. "With
written permission of the Monetary Board of the Central Bank, any Rural
Bank may:chanroblesvirtuallawlibrary
"(a) Open
current or checking accounts;chanrobles virtual law library
"(b) Act
as trustee over estates or properties of farmers and merchants;chanrobles virtual law library
"(c) Act
as official depository of municipal, city or provincial funds in the
municipality,
city or province where it is located, when so authorized by the
Monetary
Board in accordance with the provisions of Republic Act Numbered Two
hundred
sixty-five, as amended, and subject to such limitations as may be
deemed
necessary for the protection of said funds. chanrobles virtual law library
"(d) Rediscount
paper with the Philippine National Bank or the Development Bank of the
Philippines, or other banks and their branches and agencies. The
Central
Bank shall specify the nature of paper deemed acceptable for
rediscount,
as well as the rediscount rate to be charged by any of these
institutions.chanrobles virtual law library "Nothing
in this section shall be construed as precluding a Rural Bank from
performing,
with prior approval of the Monetary Board, all the services authorized
for savings and mortgage banks, or for commercial banks, under Republic
Act Numbered Three hundred and thirty-seven, as amended, or from
operating
under an expanded banking authority as provided in section 21-B of the
same Act."
Sec.
7. Section 11-A of the
same Act is hereby amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library
"Sec.
11-A. Rural Banks may invest
in equities of allied undertakings as may be approved by the Monetary
Board:
Provided, That (a) the total investment in equities shall not exceed
twenty-five
percent of the net worth of the Rural Bank; (b) the equity investment
in
any single enterprise shall be limited to fifteen percent of the net
worth
of the Rural Bank; and (c) the equity investment of the Rural Bank in
any
single enterprise shall remain a minority holding in that enterprise
except
where the enterprise is not financial intermediary: Provided, further,
That where such allied undertaking is a wholly or majority-owned
subsidiary
of a Rural Bank, the same may be subject to examination by the Central
Bank: Provided, finally, That equity investments shall not be permitted
in non-related activities."chanrobles virtual law library
Sec.
8. Section 19 of the same
Act is hereby amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library
"Sec.
19. Every individual acting
as officer or employee of a Rural Bank and handling funds or securities
amounting to five thousand pesos or more, in any one year, shall be
covered
by an adequate bond as determined by the Monetary Board; and the by-
laws
of the Rural Bank may also provide for the bonding of other employees
or
officers of Rural Banks."
Sec.
9. All acts inconsistent
herewith are hereby repealed or modified accordingly.chanrobles virtual law library
Sec.
10. This Act shall take
effect upon its approval.chanrobles virtual law library
Approved:
April 1, 1980
Back
to Top - Back
to Main Index - Back
to Home
|