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PRESIDENTIAL DECREE NO. 1795
PRESIDENTIAL DECREE NO. 1795
- AMENDING FURTHER REPUBLIC ACT NO. 337, AS AMENDED, OTHERWISE KNOWN AS
THE "GENERAL BANKING ACT"
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WHEREAS, it
is imperative to strengthen the supervisory and regulatory authority of
the Central Bank over the financial system; chanroblesvirtualawlibrary
WHEREAS, the Central Bank should be given more flexibility in order to
make the financial system more responsive to the needs of the
development program of the Government.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby order and decree the amendment of Republic Act
No. 337, as amended, as follows:cralaw:red
Section 1. Paragraph 4 of Section 21-B of Republic
Act No. 337, as amended, is hereby amended to read as follows:cralaw:red
In order to avoid undue concentration of economic power, the total
equity investments of banks, quasi-banks and their subsidiaries in any
single non-allied enterprise or industry may be subject to such
limitations as may be prescribed by the Monetary Board, but shall in
any case remain a minority in any such enterprise except as may be
otherwise approved by the President (Prime Minister).
Section 2. Section 21-C of the Same Act is hereby
amended by adding a second paragraph to read as follows:cralaw:red
Any of these entities owning or controlling the whole or majority of
the voting stock of a thrift band and/or rural bank may be required to
submit statements of condition and other reports necessary to determine
compliance with the provisions of this Section and the pertinent laws
and rules and regulations, and subjected to special examination or
investigation.
Section 3. The second paragraph of Section 22 of the
same Act is hereby amended to read as follows:cralaw:red
The Monetary Board shall prescribe the manner of determining the total
assets of banking institutions for the purposes of this Section. chanroblesvirtualawlibrary
Section 4. The third paragraph of Section 23 of the
same Act is hereby amended to read as follows:cralaw:red
The term "liabilities" as used herein, shall mean the direct liability
of the maker or acceptor of paper discounted with or sold to such bank
and the liability of the indorser, drawer or guarantor who obtains a
loan from or discounts paper with or sells papers under his guaranty to
such bank and shall include in the case of liabilities of a
co-partnership or association the liabilities of the several members
thereof and shall include in the case of liabilities of a corporation,
all liabilities of all subsidiaries thereof in which such corporation
owns or controls a majority interest: Provided, That even if the parent
corporation, co-partnership or association has no liability to the
bank, the Monetary Board may prescribe the combination of the
liabilities of subsidiary corporations or members of the co-partnership
or association under certain circumstances, including but need not be
limited to any of the following situations: (a) the parent corporation,
co-partnership or association guarantees the repayment of the
liabilities; (b) the liabilities were incurred for the accommodation of
the parent corporation or another subsidiary or of the co-partnership
or association; or (c) the subsidiaries through separate entities
operate merely as departments or divisions of a single entity:
Provided, further, That the discount of bills of exchange drawn in good
faith against actually existing values, and the discount of commercial
or business paper actually owned by the person negotiating the same,
shall not be considered as money borrowed for the purpose of this
Section: Provided, finally, That certain types of contingent
liabilities of borrowers may be included among total liabilities as may
be determined by the Monetary Board. chanroblesvirtualawlibrary
Section 5. The second paragraph of Section 30 of the
same Act is hereby amended to read as follows:cralaw:red
The Monetary Board shall prescribe the manner of determining the total
assets of banking institutions for the purposes of this Section.
Section 6. The first paragraph of 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 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 holdout 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 percent (15%) of
unimpaired capital and surplus of the bank. chanroblesvirtualawlibrary
Section 7. The third paragraph of Section 32 of the
same Act is hereby amended to read as follows:cralaw:red
The term "liabilities" as used herein, shall mean the direct liability
of the maker or acceptor of paper discounted with or sold to such bank
and the liability of the indorser, drawer or guarantor who obtains a
loan from or discounts paper with or sells papers under his guaranty to
such bank and shall include in the case of liabilities of a
co-partnership or association the liabilities of the several members
thereof and shall include in the case of liabilities of a corporation,
all liabilities of all subsidiaries thereof in which such corporation
owns or controls a majority interest: Provided, That even if the parent
corporation, co-partnership or association has no liability to the
bank, the Monetary Board may prescribe the combination of the
liabilities of subsidiary corporations or members of the co-partnership
or association under certain circumstances, including but need not be
limited to any of the following situations: (a) the parent corporation,
co-partnership or association guarantees the repayment of the
liabilities; (b) the liabilities were incurred for the accommodation of
the parent corporation or another subsidiary or of the co-partnership
or association; or (c) the subsidiaries through separate entities
operate merely as departments or divisions of a single entity:
Provided, further, That the discount of bills of exchange drawn in good
faith against actually existing values, and the discount of commercial
or business paper actually owned by the person negotiating the same,
shall not be considered as money borrowed for the purpose of this
Section: Provided, finally, That certain types of contingent
liabilities of borrowers may be included among total liabilities as may
be determined by the Monetary Board. chanroblesvirtualawlibrary
Section 8. Section 36 of the same Act is hereby
amended to read as follows:cralaw:red
Sec. 36. Deposits shall be returned to the depositors
or to their legal representatives in the manner and at the time and
under the conditions which shall be determined by the board of
directors and stipulated in regulations which shall be in conformity
with law and with such regulations as the Monetary Board may prescribe.
Section 9. Section 63 of the same Act is hereby
amended to read as follows:cralaw:red
Sec. 63. The lending or investment of deposits or
moneys received by any trust company as executor of the will of any
deceased person or as administrator, with or without the will annexed,
or as guardian, receiver, trustee, or depositary of the estate of any
minor, insane person, idiot, habitual drunkard, or other incompetent or
irresponsible person, or as receiver or depositary under and by virtue
of any order and appointment of any court, or as trustee under any
instrument in writing constituting the company as trustee, unless
otherwise directed by the instrument creating the trust, shall be
limited to the loans and investments as may be prescribed by the
Monetary Board. Any officer or director of any trust company
authorizing or making any loan or security otherwise than as provided
in this Section shall be punished by imprisonment of not less than one
year nor more than ten years and by a fine of not less than one
thousand nor more than ten thousand pesos.
Section 10. The second paragraph of Section 83 of the
same Act is hereby amended to read as follows:cralaw:red
The Monetary Board may regulate the amount of credit accommodations
that may be extended, directly or indirectly, by banking institutions
to their directors, officers, or stockholders. However, the outstanding
credit accommodations which a bank may extend to each of its
stockholders owning two percent (2%)or more of the subscribed capital
stock, its directors, or its officers, shall be limited to an amount
equivalent to the respective outstanding deposits and book value of the
paid-in capital contribution in the bank: Provided, however, That loans
and advances to officers in the form of fringe benefits granted in
accordance with rules and regulations as may be prescribed by Monetary
Board shall not be subject to the preceding limitation.
Section 11. All laws, decrees, rules and regulations
inconsistent with this Decree are hereby repealed or modified
accordingly.
Section 12. This Decree shall take effect
immediately. chanroblesvirtualawlibrary
Done in the City of Manila this
16th day of January, in the year of Our Lord nineteen hundred and
eighty-one.
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