REPUBLIC ACT NO. 7353 - AN ACT
PROVIDING FOR THE CREATION, ORGANIZATION AND OPERATION OF RURAL BANKS,
AND FOR OTHER PURPOSES
Section 1. This Act shall be known and cited as the "Rural
Banks Act of 1992."
Sec. 2. The State hereby recognizes the need to
promote comprehensive rural development with the end in view of
attaining a more equitable distribution of opportunities, income and
wealth, a sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and in expanding
productivity as a key to raising the quality of life for all,
especially the underprivileged.
Towards these ends, the State hereby encourages and assists in the
establishment of a rural banking system designed to make needed credit
available and readily accessible in the rural areas on reasonable
terms.
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 farmers and merchants, or to cooperatives of such farmers
and merchants and, in general, to the people of the rural communities,
and to supervise the operation of such banks.
Sec. 4. No rural bank shall be operated without a
Certificate of Authority from the Monetary Board of the Central Bank.
Rural banks shall be organized in the form of stock corporations. Upon
consultation with the rural banks in the area, 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: provided, that a cooperative or corporation
owning or controlling the whole or majority of the voting stock of the
rural bank shall be subject to special examination and to such rules
and regulations 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 fully owned and held directly or
indirectly by citizens of the Philippines or corporations, associations
or cooperatives qualified under Philippine laws to own and hold such
capital stock: provided, that any provisions of existing laws to the
contrary notwithstanding, stockholdings in a rural bank shall be exempt
from any ownership ceiling for a period of ten (10) years from the
approval of this Act: provided, further, that any such exemption shall
require the approval of the Monetary Board. If subscription of private
shareholders to the capital stock of a rural bank cannot be secured or
is not available, or insufficient to meet the normal credit needs of
the locality, the Land Bank of the Philippines, the Development Bank of
the Philippines, or any government-owned or controlled bank or
financial institution, on representation of the said private
shareholders but subject to the investment guidelines, policies and
procedures of the bank of financial institution 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 and
unimpaired, capital of the private stockholders 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 Land Bank of the Philippines, the Development
Bank of the Philippines or any government-owned or controlled bank or
financial institution may be sold at any time at market value to
private individuals who are citizens of the Philippines: provided,
finally, that in the sale of shares of stock subscribed by the Land
Bank of the Philippines, the Development Bank of the Philippines or any
government-owned or controlled bank or financial institution, the
registered stockholders shall have the right of preemption within one
(1) 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.
Sec. 5. All members of the Board of Directors of
the rural bank shall be citizens of the Philippines at the time of
their assumption to office: provided, however, that nothing in this Act
shall be construed as prohibiting any appointive or in any capacity in
the bank.
No director or officer of any rural bank shall, either directly or
indirectly, for himself or as the representative or agent of another,
borrow any of the deposits or funds of such banks, nor shall he become
a guarantor, indorser, or surety for loans from such bank to others, or
in any manner be an obligor for money borrowed from the bank or loaned
by it except with the written approval of the majority of the directors
of the bank, excluding the director concerned. Any such approval shall
be entered upon the records of the corporation and a copy of such entry
shall be transmitted forthwith to the appropriate supervising
department. The director/officer of the bank who violates the
provisions of this section shall be immediately dismissed from his
office and shall be penalized in accordance with Sec. 26 of this
Act.
The Monetary Board may regulate the amount of credit accommodations
that may be extended directly to the directors, officers or
stockholders of rural banks of banking institutions. However, the
outstanding credit accommodations which a rural bank may extend to each
of its stockholders owning two percent (2%) or more of the subscribed
capital stock, its directors, or officers shall be limited to an amount
equivalent to the respective outstanding deposits and book value of the
paid-in capital contributions in the bank.
Sec. 6. Loans or advances extended by rural banks
organized and operated under this Act shall be primarily for the
purpose of meeting the normal credit needs of farmers, fishermen 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.
Loans may be granted by rural banks on the security of lands without
Torrens Title where the owner of private property can show five (5)
years or more of 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 (5) 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 Department of Agrarian Reform or other
governmental 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 Department
of Agrarian Reform or corresponding governmental agency; or of
homesteads 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 the notices for the
presentation of the final proof shall also be furnished the creditor
rural bank and, if the borrower applicants fail to present the final
proof within thirty (30) days from date of notice, the creditor rural
bank may do so for then at their expense: provided, furthermore, that
the applicant for homestead or free patent has already made
improvements on the land and 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 found later to be within the
forest zone shall be for the sole account of the rural bank.
The foreclosure of mortgages covering loans granted by rural banks and
executions of judgment thereon involving real properties levied upon by
sheriff shall be exempt from the publications in newspapers now
required by law where the total amount of loan, excluding interests due
and unpaid, does not exceed One Hundred thousand Pesos (P100,000) 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
municipal public market, the rural bank, the barangay hall, and the
barangay public market, if any, where the land mortgaged is situated
during the period of sixty (60) days immediately preceding the public
auction or execution of judgment. Proof of publication as required
herein shall be accomplished by an 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 is foreclosed, the homesteader or free patent holder, as
well as his heirs shall have the right to redeem the same within one
(1) year from the date of foreclosure in the case of land not covered
by a Torrens Title or one (1) year from the date of the registration of
the foreclosure in the case of land covered by a Torrens Title:
provided, finally, that in any case, borrowers, especially those who
are mere tenants, need only to secure their loans with the procedure
corresponding to their share.
A rural bank shall be allowed to foreclosure lands mortgaged to it;
Provided, that said lands shall be covered under Republic Act No. 6657.
Sec. 7. With the view to ensuring the balanced
rural economic growth and expansion, rural banks may, within limits and
conditions fixed by the Monetary Board, devote a portion of their
loanable funds to meeting the normal credit needs of small business
enterprises; Provided, that loans shall not exceed fifteen percent
(15%) of the net worth of a rural bank or such amount as the Monetary
Board may prescribe as may be warranted by prevailing economic
conditions, and of essential enterprises or industries, other than
those which are strictly agricultural in nature.
Sec. 8. 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 Land Bank of the
Philippines, the Development Bank of the Philippines or any
government-owned or controlled bank or financial institution shall
subscribe within thirty (30) days to the 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 the subscription or such amount as may be necessary to
promote and expand rural economic development: provided, however, that
shares of stock issued to the Land Bank of the Philippines, the
Development Bank of the Philippines or any government-owned or
controlled bank or financial institution, may, pursuant to this
section, at any time, be paid off at par and retired in whole or in
part if the rural bank has accumulated enough capital strength to
permit retirement of such shares, or if an offer is received form
private sources to replace the equity investment of the Land Bank of
the Philippines, the Development Bank of the Philippines or any
government owned or controlled bank or financial institution with an
equivalent investment or more in the equity of such bank. In case of
retirement of stock or replacement of equity investments of the Land
Bank of the Philippines, the Development Bank of the Philippines or of
any government-owned or controlled bank or financial institution, the
registered private shareholders of the rural bank shall have the right
of preemption within one (1) year from the date of offer in proportion
to their respective holdings.
Stocks held by the Land Bank of the Philippines, the Development Bank
of the Philippines or by any government-owned or controlled bank or
financial institution, 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 from the date of
issuance in the amount of four percent (4%) on the first and second
years, six percent (6%) on the third and fourth years, eight percent
(8%) on the fifth and sixth years, ten percent (10%) on the seventh and
eighth years and twelve percent (12%) on the ninth to the fifteenth
years without preference; Provided, however, that if such stock of the
Land Bank of the Philippines, the Development Bank of the Philippines
or any government owned or controlled bank or financial institution is
sold to private shareholders, the same may be converted into common
stock of the class provided for in Section 10 hereof: 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
stockholders, 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
stocks so transferred shall be surrendered and cancelled and the
corresponding common stocks shall be issued.
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 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 to private shareholders which, together with a
copy of the Articles of Incorporations, as amended, 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 Articles of
Incorporation on file with said office.
The Securities and Exchange Commission shall not register the amended
Articles of Incorporation unless accompanied by the Certificate of
Authority required under Sec. 9 of Republic Act No. 337, as amended.
All supervised past due and restructured past due loans, including
those covered under existing rehabilitation programs of the Central
Bank, and fifty percent (50%) of non-supervised past due and
restructured past due loans including accrued interest thereon of rural
banks organized under Republic Act No. 720, as amended, as of December
31, 1986, shall be converted into preferred stocks of the rural bank
and issued in favor of the Land Bank of the Philippines, the
Development Bank of the Philippines or any government-owned or
controlled bank or financial institution: provided, that penalties
thereon are hereby waived except accrued interest on arrearages:
provided, further, that the equivalent penalties due from corresponding
farmers are likewise waived: provided, further, that rural banks that
prefer to settle their arrearages under a plan of payment or a
combination of both plan of payment and conversion may do so in
accordance with existing regulations and provisions of this Act:
provided, furthermore, that rural banks shall match these preferred
stocks with private equity in equal annual installments over a period
of fifteen (15) years to begin three (3) years after conversion;
Provided, finally, that the Central Bank, the Land Bank of the
Philippines, the Development Bank of the Philippines and any
government-owned or controlled bank or financial institution shall
continue to rediscount subject to their respective programs, policies
and guidelines against papers evidencing a loan granted by a rural bank
in order to achieve the declared policy and promote the objectives of
this Act.
Sec. 9. The Land Bank of the Philippines, the
Development Bank of the Philippines or any government-owned or
controlled bank or financial institution may obtain from any source as
may be authorized under existing laws and regulations such amounts as
it may require for the purpose of subscribing to the shares of stock of
rural banks, and of granting loans to such banks as provided in Section 13 of this Act.
SECTION 10. Stock certificates shall be issued to
represent the contributions to capital stock of the rural bank by the
Government through the Land Bank of the Philippines, the Development
Bank of the Philippines or any government-owned or controlled bank or
financial institution, 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, organizing under
this Act.
SECTION 11. The power to supervise the operation of
any rural bank by the Monetary Board as herein indicated shall consist
in placing limits to the maximum credit allowed to any individual
borrower; in prescribing the interest rate, in determining the loan
period and loan procedures, in indicating the manner in which technical
assistance shall be extended to rural banks, in imposing a uniform
accounting system and manner keeping the accounts and records of rural
banks; in instituting periodic surveys of loan and lending procedures,
audits, test-check of cash and other transactions of the rural banks;
in conducting training courses for personnel of rural banks; and, in
general, in supervising the business operations of the rural banks.
The Central Bank shall have the power to enforce the laws, orders,
instructions, rules and regulations promulgated by the Monetary Board,
applicable to rural banks; to require rural banks, their directors,
officers and agents to conduct and manage the affairs of the rural
banks in a lawful and orderly manner; and, upon proof that the rural
bank or its Board of Directors, or officers are conducting and managing
the affairs of the bank in a manner contrary to laws, orders,
instructions, rules and regulations promulgated by the Monetary Board
or in a manner substantially prejudicial to the interest of the
Government, depositors or creditors, to take over the management of
such bank when specifically authorized to do so by the Monetary Board
after due hearing process until a new board of directors and officers
are elected and qualified without prejudice to the prosecution of the
persons responsible for such violations under the provisions of
Section s 32, 33 and 34 of Republic Act No. 265, as amended.
The management of the rural bank by the Central Bank shall be without
expense to the rural bank, except such as is actually necessary for its
operation, pending the election and disqualification of a new board of
directors and officers to take place of those responsible for the
violations or acts contrary to the interest of the Government,
depositors or creditors.
The director and the examiners of the department of the Central Bank
charged with the supervision of rural banks are hereby authorized to
administer oaths to any director, officer or employee of any rural bank
or to any voluntary witness and to compel the presentation of all
books, documents, papers or records necessary in his or their judgment
to ascertain the facts relative to the true condition of any rural bank
or to any loan.
SECTION 12. In addition to the operations
specifically authorized in this Act, any rural bank may;
(a) Accept savings and time deposits;
(b) Open current or checking accounts, provided the
rural bank has net assets of at least Five Million pesos (P5,000,000)
subject to such guidelines as may be established by the Monetary Board;
(c) Act as correspondent for other financial
institutions;
(d) Act as a collection agent;
(e) Act as official depository of municipal, city or
provincial funds in the municipality, city or province where it is
located, subject to such guidelines as may be established by the
Monetary Board.
(f) Rediscount paper with the Philippine National
Bank, the Land Bank of the Philippines, the Development Bank of the
Philippines or any banking institution, including its branches and
agencies. Said institution shall specify the nature of paper deemed
acceptable for rediscount, as well as the rediscount rate to be charged
by any of these institutions;
(g) Offer other banking services as provided in
Sec. 72 of Republic Act No. 337, as amended; and
(h) Extend financial assistance to private and public
employees in accordance with the provisions of Section s 5 or Republic
Act No. 3779, as amended.
With written permission of the Monetary Board of the Central Bank, any
rural bank may act as trustee over estates or properties of farmers and
merchants;
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 No. 337, as amended, or from operating under
an expanded authority as provided in Sec. 21-B of the same Act.
SECTION 13. Subject to such guidelines as may be
established by the Monetary Board, rural banks may invest in equities
of allied undertakings as hereinafter enumerated: provided, that: (a)
the total investment to equities shall not exceed twenty-five percent
(25%) of the net worth of the rural bank; (b) the equity investment in
any single enterprise shall be limited to fifteen percent (15%) 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: provided, further, that equity investment shall not be
permitted in non-related activities;
Allied undertakings shall include;
(a) Banks, financial institutions and non-bank
financial intermediaries;
(b) Warehousing and other post-harvest facilities;
(c) Fertilizer and agricultural chemical and
pesticides distribution;
(d) Farm equipment distribution;
(e) Trucking and transportation of agricultural
products;
(f) Marketing of agricultural products;
(g) Leasing; and
(h) Other undertakings as may be determined by the
Monetary Board.
SECTION 14. The Land Bank of the Philippines, the
Development Bank of the Philippines or any government-owned or
controlled bank or financial institution shall within sixty (6) 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 (10)
years, with concessional rates of interest, 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;
(b) That there is a dearth of private capital in the
said locality; and
(c) That it is not possible for the stockholders of
the rural bank to increase the paid-up capital thereof.
SECTION 15. All rural banks created and organized
under the provisions of this Act shall be exempt from the payment of
all taxes, fees and charges of whatever nature and description, except
the corporate income tax and local taxes, fees and charges, for a
period of five (5) years from the date of commencement of operations.
All rural banks in operation as of the date of approval of this Act
shall be exempt from the payment of all taxes, fees and charges of
whatever nature and description, except the corporate income tax and
local taxes, fees and charges, for a period of five (5) years from the
approval of this Act.
SECTION 16. In an emergency or when a financial
crisis is imminent, the Central Bank may give a loan to any rural bank
against assets of the rural bank which may be considered acceptable by
a concurrent vote of a least four (4) members of the Monetary Board.
In normal times, the Central Bank may rediscount against paper
evidencing a loan granted by a rural bank to any of its customers which
can be liquefied within a period of three hundred sixty (360) days;
Provided, however, that for the purpose of implementing a nationwide
program of agricultural and industrial development, rural banks are
hereby authorized, under such terms and conditions as the Central Bank
shall prescribe, to borrow, on a medium or long-term basis, funds that
the Central Banks or any other government financing institution shall
borrow from the Development Bank of the Philippines or other
international or foreign-lending institutions for the specific purpose
of financing the abovestated agricultural and industrial program.
Repayment of loans obtained by the Central Bank of the Philippines or
any other government-financing institution form said foreign lending
institutions under this section shall be guaranteed by the Republic of
the Philippines.
SECTION 17. Deposits of rural banks with
government-owned or controlled financial institutions like the Land
Bank of the Philippines, the Development Bank of the Philippines, and
the Philippine National Bank are exempted from the Single Borrower's
Limit imposed by the General Banking Act.
In areas where there are no government banks, rural banks may deposit
in private banks more than the amount prescribed by the Single
Borrower's Limit, subject to Monetary Board regulations.
SECTION 18. To encourage consolidation and mergers of
rural banks, there are five (5) or more rural banks within the region
that merge and consolidate within three (3) years from the enactment of
this Act, the merged or consolidated entity will be given the following
incentives for a period of seven (7) years.
(a) Its deposit liabilities shall be subjected to
only one third (1/3) of reserves normally required for rural banks.
(b) Its reserve requirement can all be maintained
under interest-bearing government securities but kept unencumbered with
government financial institutions or the Central Bank; and
(c) It shall have unrestricted branching right within
the region, free from any assessment or surcharges required in setting
up a branch but under coordination with the Central Bank which will
have to assess that there are qualified personnel, control and
procedures to operate the branch.
SECTION 19. The Central Bank of the Philippines shall
extend technical assistance to any rural bank in the process of
organization or during the course of operations whenever it is
requested to do so or whenever the Monetary Board deems it necessary to
preserve, protect and promote the objectives of this Act; Provided,
however, that said assistance shall be without cost or obligation on
the part of the rural bank.
Sec. 20. Any city of municipal trial court judge
in his capacity as notary public ex officio shall administer the oath
or acknowledge the instruments of any rural bank and its borrowers or
mortgagors, free from all charges, fees and documentary stamp tax,
collectible under existing laws, relative to any loan or transaction
not exceeding Fifty thousand pesos (P50,000) or such amount as the
Secretary of Finance, upon recommendation of the Monetary Board may
prescribe as may be necessary to promote and expand the rural economy.
Sec. 21. Any register of Deeds shall accept from
any rural bank and its borrowers and 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 transaction extended by a rural bank in an amount
not exceeding Fifty thousand pesos (P50,000); Provided, however, that
charges, if any, shall be collectible on the amount in excess of Fifty
thousand pesos (P50,000); and that in instruments related to
assignments of several mortgages consolidated in a single deed, if any,
shall be levied only on the amount in excess of Fifty thousand pesos
(P50,000) of the consideration in the assignment of each mortgage, or
such amount as the Secretary of Finance, upon recommendation of the
Monetary Board, may prescribe as may be necessary to promote and expand
the rural economy.
Sec. 22. Any rural bank organized under this Act
may, pursuant to regulations promulgated for the purpose by the
Monetary Board, be required to contribute to the Central Bank an annual
fee to help defray the cost of maintaining the appropriate supervising
department within the Central Bank in an amount to be determined by the
Monetary Board but in no case to exceed one fortieth of one percent
(1/40 of 1%) of its average total assets during the preceding years, as
shown on its end-of-month balance sheets, after deducting its cash on
hand and amounts due from banks, including the Central
Bank.
Sec. 23. Every individual acting as officer or
employee of a rural bank and handling funds or securities amounting to
Five thousand pesos (P5,000) or more, in any one (1) year, shall be
covered by an adequate bond as determined by the Monetary Board; and
the bylaws of the rural bank may also provide for the bonding of other
employees or officers of rural banks.
Sec. 24. For the purpose of carrying out the
objectives of this Act, the Central Bank is authorized to require the
services and facilities of any department or instrumentality of the
Government or any officer or employee of any such departments or
government instrumentality.
Sec. 25. Rural banks organized and operated under
the provisions of this Act shall act as agents of the Philippine
National Bank, The Land Bank of the Philippines, the Development Bank
of the Philippines in places where these have no offices, subject to
accreditation guidelines.
Sec. 26. Without prejudice to any prosecution
under any law which may have been violated, a fine of not more than Ten
thousand pesos (P10,000), or imprisonment for not less than six (6)
months but more than ten (10) years, or both, at the discretion of the
court, shall be imposed upon.
(a) Any officer, employee, or agent of a rural bank
who shall:
(1) Make false entries in any bank report or
statement thereby affecting the financial interest of, or causing
damage to, the bank or any person; or
(2) Without order of a court of competent
jurisdiction, disclose any information relative to the funds or
properties in the custody of the bank belonging to private individuals,
corporations, or any other entity; or
(3) Accept gifts, fees or commission or any other
form of remuneration in connection with the approval of a loan from
said bank; or
(4) Otherwise or aid in overvaluing any security for
the purpose of influencing in any way of the action of the bank on any
loan; or
(5) Appear and sign as guarantor, indorser, or surety
for loans granted; or
(6) Violate any of the provisions of this Act.
(b) Any applicant for a loan from, or borrower of a
rural bank who shall:
(1) Misuse, misapply, or divert the proceeds of the
loan obtained by him from its declared purpose; or
(2) Fraudulently overvalue property offered as
security for a loan from said bank; or
(3) Give out or furnish false or willful
misrepresentation of material facts for the purpose of obtaining,
renewing, or increasing a loan or extending the period thereof; or
(4) Attempt to defraud the said bank in the event of
court action to recover a loan; or
(5) Offer any officer, employee or agent of a rural
bank as a gift, fee, commission or other form of compensation in order
to influence such bank personnel into approving a loan application; or
(6) Dispose or encumber the property or the crops
offered as security for the loan.
(c) Any examiner, or officer or employee of the
Central Bank of the Philippines or of any department, bureau, office,
branch or agency of the Government who is assigned to examine,
supervise, assist or render technical service to rural banks and who
shall connive or aid in the commission of the same.
Sec. 27. Any municipal trial court judge 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 judge as provided in
Sec. 20 and by said register of deeds as provided in Sec. 21 of
this Act, shall be punished by a fine of not more than One thousand
pesos (P1,000) or by imprisonment for not more than one (1) year, or
both, at the discretion of the court.
Sec. 28. Any bank not organized under this Act and
any person, association, or corporation doing the business of banking,
not authorized under this Act which shall use the words "Rural Bank" as
part of the name or title of such bank or of such person, association,
or corporation, shall be punished by a fine of not less than Fifty
pesos (P50) for each day during which said words are so used.
Sec. 29. The Monetary Board of the Central Bank
shall submit a report to the Congress of the Philippines 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 therefore.
Sec. 30. If any provision or section of this Act
or the application thereof to any person or circumstances is held
invalid, the other provisions of sections of this Act, and the
application of such provision or section to other persons or
circumstances, shall not be affected thereby.
Sec. 31. Republic Act No. 720, as amended, is
hereby repealed. The provisions of Republic Act No. 265, as amended,
and Republic Act No. 337, as amended, insofar as they are applicable
and not in conflict with any provision of this Act, are hereby made a
part of this Act.
Sec. 32. This act shall take effect upon its
approval.
Approved: April 2, 1992
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