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REPUBLIC ACT NO. 1097 - AN
ACT TO AMEND CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED SEVEN HUNDRED
TWENTY, OTHERWISE KNOWN AS THE RURAL BANKS ACT |
Section 1.
Section four of Republic Act Numbered Seven hundred twenty, otherwise
known as the Rural Banks Act, is hereby amended to read as follows: "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 may
organize Rural Banks and/or subscribed to the shares of stock of any
Rural Bank. At least sixty per cent of the capital stock of any Rural
Bank shall be owned and held by citizens of the Philippines: Provided,
however, That if said subscription of private shareholders to the
capital stock of Rural Bank cannot be secured or is not available, the
Rehabilitation Finance Corporation, 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:
Provided, further, That such shares of stock subscribed by the
Rehabilitation Finance Corporation may be sold at any time at par to
private individuals who are citizens of the Philippines: Provided,
finally, That in the sale of the shares of stock registered by the
Rehabilitation Finance Corporation, the registered stockholders shall
have the right or preemption within five years 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
of province where the Rural Bank is located. All members of the Board
of Directors of the Rural Banks shall be citizens of the
Philippines." Sec. 2. Section seven of the same Act is amended to read as follows: "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 Rehabilitation Finance Corporation 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 but not exceeding the total
equity investment of the private shareholders: Provided, however, That
shares of stock issued to the Rehabilitation Finance Corporation,
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 Banks has accumulated enough capital strength to permit
retirement of such shares; or if an offer is received from private
sources, to replace the equity investments of the Rehabilitation
Finance Corporation with an equivalent investment or more in the common
stock or replacement of equity investments of the Rehabilitation
Finance Corporation, the registered private shareholders of the Rural
Bank shall have the right of preemption within five years from date of
offer in proportion to their respective holdings. "Stock held by the Rehabilitation
Finance Corporation, under the terms of this section, shall be made
preferred only as to assets upon liquidation and without the power to
vote and shall share in dividend distributions not exceeding two
percent thereof without preference; Provided, however, That if such
stock of the Rehabilitation Finance Corporation is sold to private
shareholders, the same shall be converted into common stock of the
class provided for in section nine." Sec. 3. Section twelve of the same Act is amended to read as follows: "Section 12.
The Rehabilitation Finance Corporation shall, within sixty days of
certification of the Monetary Board, which shall be final, extend to a
Rural Bank a loan or loans from time to time repayable in ten years,
with interest at the rate of two per cent per annum, against security
which may be offered by any stockholder or stockholders of the Rural
Bank: Provided — "(a) That the
Monetary Board is convinced that the resources of the Rural Bank are
inadequate to meet the legitimate credit requirements of the locality
wherein the Rural Bank is established; Sec. 4. Section fourteen of the same Act is amended to read as follows: "Section 14.
All Rural Banks created and organized under the provisions of this Act,
with net assets not exceeding seven hundred thousand pesos, shall be
exempt from the payment of all taxes, charges and fees of whatever
nature and description." Sec. 5. Section sixteen of the same Act is amended to read as follows: "Section 16.
Any justice of the peace, in his capacity as notary ex-officio, shall
administer the oath to or acknowledge the instruments of any Rural Bank
and its borrowers or mortgagors, free from all charges, fees and
documentary stamp tax, collectible under the existing laws, relative to
any loan or transaction not exceeding two thousand pesos." Sec. 6. Section seventeen of the same Act is amended to read as follows: "Section 17.
Any register of deeds shall accept from any Rural Bank and its
borrowers or mortgagors for registration, free from all charges, fees,
and documentary stamp tax, collectible under existing laws, any
instrument, whether voluntary or involuntary, relating to loans or
transactions extended by a Rural Bank in an amount not exceeding two
thousand pesos; Provided, however, That charges if any shall only be
collectible on the amount in excess of two thousand pesos; and that in
instruments related to assignments of several mortgages consolidated in
a single deed, charges or fees, if any, shall be levied only on the
amount in excess of two thousand pesos of the consideration in the
assignment of each mortgage." Sec. 7. Section twenty-three of the same Act is amended to read as follows: "Sec. 23.
Any justice of the peace or register of deeds who shall demand or
accept, directly or indirectly, any gift, fee, commission or other form
of compensation in connection with the service or shall arbitrarily or
without reasonable cause delay the acknowledgment or administration of
oath or the registration of documents required to be performed by said
justice of the peace as provided in section sixteen and by said
register of deeds as provided in section seventeen of this Act, shall
be punished by a fine of not more than one thousand pesos or by
imprisonment for not more than one year, or both, at the discretion of
the court." Sec. 8. Section twenty five of the same Act is amended to read as follows: "Sec. 25.
The Monetary Board of the Central Bank shall submit a report to the
Congress as of the end of each calendar year of all the rules and
regulations promulgated by it in accordance with the provisions of this
Act, as well as its other actuations in connection with Rural Banks,
together with an explanation of its reasons therefor." Sec. 9. This Act shall take effect upon its approval.cralaw Approved: June 15, 1954 |