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PRESIDENTIAL DECREE NO. 1317
PRESIDENTIAL DECREE NO. 1317 -
FURTHER AMENDING REPUBLIC ACT NO. 337, AS AMENDED, OTHERWISE KNOWN AS
"THE GENERAL BANKING ACT"
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WHEREAS, it
is the responsibility of the government to foster conditions conducive
to the development of healthy competition among the different banking
institutions;chanroblesvirtualawlibrary
WHEREAS, one important segment of the banking industry is the thrift
banking system whose continued viability is essential to the efficient
functioning of the financial system as well as to the attainment of
national economic goals; and
WHEREAS, a strong thrift banking system will further enhance its
capacity to service fully the increasing needs of households for a more
convenient payments facility for personal and consumer finance as well
as for long-term financing for home building and home development;chanroblesvirtualawlibrary
NOW THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the power vested in me by the Constitution, do hereby decree
and order the amendment of Republic Act No. 337, as amended:cralaw:red
Section 1. Section 20 of Republic Act No. 337, as
amended, is hereby further amended to read as follows:cralaw:red
"Sec. 20. A commercial bank shall be a corporation
primarily organized for the purpose of performing the functions
provided in section twenty-one of this Act and of accepting or creating
demand deposits subject to withdrawal by check." chanroblesvirtualawlibrary
Section 2. Subsection (a) of Section 31 of the same
Act is hereby further amended to read as follows:cralaw:red
"(a) Loans with the security of their own savings and
time deposit obligations or of mortgage and chattel mortgage bonds
which they have issued, or with the security of savings and time
deposit obligations of other banks doing business in the Philippines:
Provided, That subject to such regulations as the Monetary Board may
prescribe, banks may grant: (1) clean loans for personal and household
finance in amounts not exceeding the borrower's savings and time
deposits in the bank plus his four months salary or regular income
whether from employment or from his own business, and (2) loans for
personal and household finance secured by real estate or chattel
mortgage. The aggregate loans granted under subsection (2) shall not
exceed ten percent (10%) of the total assets of the bank."
Section 3. Subsection (b) of Section 31 of the same
Act is hereby amended to read as follows:cralaw:red
"(b) Loans of the following types:cralaw:red
"(1) Loans to encourage the breeding, raising and
production of cattle, carabao and other livestock, with maturities up
to three years: Provided, however, That the Monetary Board may, in
special cases and notwithstanding the provisions of the last paragraph
of Section seventy-eight of this Act, allow longer maturities. Loans
under this subsection shall be repaid in regular installments and shall
have as principal security a lien on the animals, the bank being
empowered, however, to require, in addition real estate and other
securities to its satisfaction; Provided, however, That the livestock
need not secure the loan if the borrower constitutes a lien or mortgage
on real estate property seventy per cent (70%) of the appraised value
of which equals or exceeds the amount of the loan granted. The amount
of any such loan not exceed fifty per cent (50%) of the commercial
value of the animals at the time the loan is made but similar
additional loans up to fifty per cent (50%) may be made as the value of
the stock increases.
"(2) Equipment loans, with maturities up to five
years, for the acquisition of any instruments, machinery and other
movable equipment for the production, processing, transformation,
handling or transportation of agricultural and industrial products for
the use of the borrower. Such loans shall constitute a first lien on
the assets so acquired with the proceeds of the loan, the bank being
empowered, however, to require as additional security a lien or
mortgage on other properties of the debtor: Provided, That the lien
need not be constituted if the borrower executes a mortgage on real
estate property seventy per cent (70%) of the appraised value of which
equals or exceeds the amount of the loan granted.
"(3) Loans for the acquisition of agricultural inputs
such as seeds, fertilizers, feeds and other similar items. Such loans
shall be secured either by chattel mortgage on growing, standing or
stored crops or by any other acceptable collateral and shall be subject
to such ceiling and regulations as the Monetary Board may prescribe:
Provided, That the bank shall be empowered to require as additional
security a lien or mortgage on other properties of the debtor:
Provided, further, That such loans need not be secured by the growing,
standing or stored crops or other collateral if the borrower executed a
mortgage on real estate property seventy per cent (70%) of the
appraised value of which equals or exceeds the amount of the loan
granted."
Section 4. Subsection (e) of Section 31 of the same
Act is hereby amended to read as follows:cralaw:red
"(e) High grade bonds and other evidences of
indebtedness, and loans against such obligations, and commercial papers
and accounts receivable discounted with recourse, subject to such rules
as the Monetary Board may promulgate."
Section 5. Section 31 of the same Act is hereby
amended by adding a new subsection after subsection (j) which shall
read as follows:cralaw:red
"(k) Such other loans and investments which the
Monetary Board may determine as necessary in the furtherance of
national economic objectives."
Section 6. Section 32 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 32. Except as the Monetary Board may otherwise
prescribe, the direct indebtedness to a savings and mortgage bank of
any person, company, corporation or firm, including in the indebtedness
of the company or firm the indebtedness of the several members thereof,
for money borrowed, excluding (a) loans secured by obligations of the
Central Bank or of the Philippine Government, (b) loans fully
guaranteed by the Government as to the payment of principal and
interest, (c) loans to the extent covered by hold-out on, or assignment
of, deposits maintained in the lending bank and held in the
Philippines, and (d) other loans or credits as the Monetary Board may,
from time to time, specify as non-risk assets, shall at no time exceed
fifteen per cent (15%) of unimpaired capital and surplus of the bank:
Provided, however, That this limitation shall not apply to loans made
under subsection (f) of section thirty-one.
"Notwithstanding the provisions of the preceding paragraph and subject
to such regulations as the Monetary Board may prescribe, the total
indebtedness of any borrower to the bank may amount to a further
fifteen per cent (15%) of the unimpaired capital and surplus of such
bank provided the additional indebtedness is for the purpose of
subdivision or housing development.
"Loans accommodations granted by savings mortgage banks to any other
bank, as well as deposits maintained by them in any bank licensed to do
business in the Philippines, shall be subject to the loan limit to any
single borrower as herein prescribed."
Section 7. The same Act is hereby amended by adding a
new Section to be designated as Section 72-A which shall read as
follows:cralaw:red
"Sec. 72-A. Banking institutions other than
commercial banks may, upon prior approval of, and subject to such
conditions and rules as may be prescribed by, the Monetary Board,
accept or create demand deposits subject to withdrawal by check."
Section 8. Section of the same Act is hereby amended
to read as follows:cralaw:red
"Sec. 78. Loans against real estate security shall
not exceed seventy per cent (70%) of the appraised value of the
respective real estate security, plus seventy per cent (70%) of the
appraised value of the insured improvements, and such loans shall not
be made unless titles to the real estate, free from all encumbrances,
shall be in the mortgagor. In the event of foreclosure, whether
judicially or extrajudicially, of any mortgage on real estate which is
security for any loan granted before the passage of this Act or under
the provisions of this Act, the mortgagor or debtor whose real property
has been sold at public auction, judicially or extrajudicially, for the
full or partial payment of an obligation to any bank, banking or credit
institution, within the purview of this Act shall have the right,
within one year after the sale of the real estate as a result of the
foreclosure of the respective mortgage, to redeem the property by
paying the amount fixed by the court in the order of execution, with
interest thereon at the rate specified in the mortgage, and all the
costs and other judicial expenses incurred by the bank or institution
concerned by reason of the execution and sale and as a result of the
custody of said property less the income received from the
property. chanroblesvirtualawlibrary
However, the purchaser at the auction sale concerned shall have the
right to enter upon and take possession of such property immediately
after the date of the confirmation of the auction sale and administer
the same in accordance with law.
"Similarly, loans on the security of chattels shall not exceed fifty
per cent (50%) of the appraised value of the security, and such loans
shall not be made unless title to the chattels, free from all
encumbrances, shall be in the mortgagor.
"The Monetary Board may, by regulation, prescribe further security
requirements to which the various types of bank credit shall be
subject, and, in accordance with the authority granted to it in section
one hundred eleven of the Central Bank Act, the Board may by regulation
reduce the maximum ratios established in the present section, or, in
special cases, increase the maximum ratios established herein. chanroblesvirtualawlibrary
"The Monetary Board may, similarly, in accordance with the authority
granted to it in section one hundred eleven of the Central Bank Act,
reduce the maximum permissible maturities specified in this Act for
various types of bank loans, but in no case shall the Board exercise
such power to authorize maximum maturities greater than those
established in this Act. Any reduction by the Board of the maximum
maturities specified in this Act shall apply only to loans made after
the date of such action."
Section 9. All existing laws, orders, rules and
regulations or parts thereof in conflict or inconsistent herewith are
hereby repealed or modified accordingly.
Section 10. This Decree shall take effect immediately.
DONE in the City of Manila,
this 29th day of March, in the year of Our Lord, nineteen hundred and
seventy-eight.
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