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PRESIDENTIAL DECREE NO. 171
PRESIDENTIAL DECREE NO. 171
- AMENDING PRESIDENTIAL DECREE NO. 64, RELATIVE TO THE CHARTER OF THE
PHILIPPINE NATIONAL BANK
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WHEREAS,
Presidential Decree No. 5 of September 27, 1972 amending the Charter of
the Philippine National Bank, adopted and approved into law, House Bill
No. 2483, which was pending before Congress at the time of the
promulgation of the Proclamation No. 1081 dated September 21, 1972;chanroblesvirtualawlibrary
WHEREAS, Presidential Decree No. 5 was amended by Presidential Decree
No. 64 to incorporate certain changes and modifications, particularly
certain proposals recommended in the report of an official banking
survey commission;chanroblesvirtualawlibrary
WHEREAS, the Bank Charter needs further amendment and modification in
order that it can carry out its assigned role in the economic
development of the country under the program of the New Society;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief of all the
Armed Forces of the Philippines, pursuant to Proclamation No. 1081,
dated September 21, 1972, as amended and in order to effect desired
changes and reforms in the social, economic and political structures of
our society, do hereby order and decree as follows:cralaw:red
Section 1. Sub-section (h) of Section two of Republic
Act Numbered Thirteen Hundred, as amended, is further amended to read
as follows: chanroblesvirtualawlibrary
"Sec. 2. Corporate powers and duties. — The said
National Bank, upon its organization, shall be a body corporate and
shall have the power:cralaw:red
xxx
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"(h) To invest in stocks, bonds and other secured
collaterals having maturities of not more than thirty years: PROVIDED,
THAT THE BANK MAY ORGANIZE AND INCORPORATE AN INVESTMENT AND/OR
DEVELOPMENT FINANCING SUBSIDIARY, WHOSE CAPITAL STOCK MAY BE SUBSCRIBED
IN WHOLE OR IN PART BY THE BANK: PROVIDED, FURTHER, THAT THE
CONTROLLING INTEREST OF NOT LESS THAN SIXTY-SIX AND TWO-THIRDS
(66-2/3%) PERCENT OF THE AUTHORIZED CAPITAL STOCK OF SUCH SUBSIDIARY
SHALL AT ALL TIMES REMAIN WITH THE BANK: AND PROVIDED, FINALLY, THAT
THE ORGANIZATION AND INCORPORATION OF SUCH SUBSIDIARY SHALL BE APPROVED
BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES."
Section 2. Sub-sections (g) and (h) of Section Five
of Republic Act Numbered Thirteen Hundred, as amended, to read as
follows:cralaw:red
"Sec. 5. Loans and investments authorized. — Total
liabilities of a single borrower. — Additional liabilities and security
required. — Said National Bank is hereby authorized:cralaw:red
xxx
xxx
xxx
(g) To invest in equities of the following allied
undertakings: warehousing companies, leasing companies, storage
companies, safe deposit box companies, trust companies, companies
engaged in the management of mutual funds but not in the mutual funds
themselves, banks other than rural banks and such other similar
activities as the Monetary Board of the Central Bank of the Philippines
may declare as appropriate from time to time: Provided, however, That
(a) the total investments in equities on ALLIED UNDERTAKINGS AS HEREIN
PROVIDED shall not exceed twenty-five percent (25%) of the net worth of
the Bank; (b) the investment in any one enterprise AS AN ALLIED
UNDERTAKING shall not exceed ten percent (10%) of the net worth of the
Bank; (c) the investment of the Bank in any single enterprise AS AN
ALLIED UNDERTAKING SHALL REMAIN A MINORITY HOLDING IN THAT ENTERPRISE
except where the enterprise is not a financial intermediary; and (d)
the investment in other banks shall be deducted from the Bank's net
worth for purposes of computing the prescribed ratio of net worth to
risk assets. Equity investments shall not be permitted in non-related
activities, NOT OTHERWISE PROVIDED IN THIS ACT.
Where the allied undertaking is a wholly-owned or majority controlled
subsidiary of the Bank, it shall be subject to examination by the
Central Bank."
(h) To grant loans to cooperatives as well as to
individual members of such cooperatives: Provided, That in the grant of
said loans the collateral requirements elsewhere required in this Act
may be waived in appropriate cases.
The aggregate amount of loan for any single industry shall at no time
exceed twenty (20%) per cent of the Bank's lending capacity.
"THE TOTAL LIABILITIES TO THE BANK OF ANY INDIVIDUALS, INCLUDING THE
LIABILITIES OF THE INDIVIDUAL'S SPOUSE, OR OF ANY CORPORATION OR FIRM
FOR MONEY BORROWED, INCLUDING IN THE LIABILITIES OF THE CORPORATION OR
FIRM THE LIABILITIES OF THE SEVERAL MEMBERS THEREOF, SHALL AT NO TIME
EXCEED FIFTEEN PER CENTUM (15%) OF THE UNIMPAIRED CAPITAL AND SURPLUS
OF THE BANK. BUT 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, AND IN ADDITION TO THE FIFTEEN PER
CENTUM (15%) OF THE UNIMPAIRED CAPITAL AND SURPLUS OF THE BANK,
HEREINBEFORE PROVIDED FOR, THE TOTAL LIABILITIES OF ANY BORROWER MAY
AMOUNT TO A FURTHER FIFTEEN PER CENTUM OF THE UNIMPAIRED CAPITAL AND
SURPLUS OF THE BANK PROVIDED SUCH ADDITIONAL LIABILITIES ARE SECURED BY
SHIPPING DOCUMENTS, WAREHOUSE RECEIPTS OR OTHER SIMILAR DOCUMENTS
TRANSFERRING OR SECURING TITLE COVERING READILY MARKETABLE,
NON-PERISHABLE STOCKS, WHEN SUCH STAPLES HAVE A MARKET VALUE EQUAL TO
AT LEAST ONE HUNDRED TWENTY-FIVE PER CENTUM (25%) OF SUCH ADDITIONAL
LIABILITIES.
"PROVIDED, FURTHER, THAT THE CEILING ON THE TOTAL LIABILITIES OF ANY
PERSON, CORPORATION, OR FIRM FOR MONEY BORROWED SHALL EXCLUDE (a) LOANS
SECURED BY OBLIGATIONS OF THE CENTRAL BANK OR OF THE PHILIPPINE
GOVERNMENT, (b) LOANS TO THE EXTENT COVERED BY HOLDOUT ON, OR
ASSIGNMENT OF, DEPOSITS IN THE BANK AND HELD IN THE PHILIPPINES OR
ABROAD, (c) LOANS AND ACCEPTANCES UNDER LETTER OF CREDIT TO THE EXTENT
COVERED BY MARGIN DEPOSITS, AND (d) OTHER LOANS OR CREDITS WHICH THE
MONETARY BOARD MAY FROM TIME TO TIME SPECIFY AS NON-RISK ASSETS. chanroblesvirtualawlibrary
"The Bank shall not make any loan upon the stock of any other
corporation as collateral if the aggregate market value of all such
stocks held as collateral exceeds an amount equal to ten (10%) per
centum of the unimpaired capital stock and surplus of the Bank.
"The term 'loan' whenever used in this Act shall include overdrafts and
the limitations contained in this section shall apply to any loan of
any kind whenever secured wholly or partly by real estate mortgage."
Section 3. Section Six of Republic Act Numbered
Thirteen hundred, as amended, is further amended to read as follows:cralaw:red
"Sec. 6. Board of Directors — Composition — Per Diems
— Tenure. — The affairs and business of the National Bank shall be
directed and its property managed and preserved, unless otherwise
provided in the Act, by a Board of Directors consisting of nine members
duly elected as hereinafter provided for a TERM OF ONE YEAR or after
their successors are duly elected and qualified and who shall be paid a
per diem of two hundred fifty pesos for each session of the Board of
Directors."
Section 4. Section Seven of Republic Act Numbered
Thirteen Hundred, as amended, is further amended to read as follows:cralaw:red
"Sec. 7. Election of Board of Directors — Election of
Chairman and Vice-Chairman of the Board of Directors. — Annually on the
first Tuesday after the first Monday in March, the stockholders shall
meet to elect the members of the Board of Directors FOR THE CURRENT
YEAR, each stockholder or proxy to be entitled to as many votes as he
may have shares of stocks, registered in his name on the thirty-first
of January last preceding and held by him at the time of the election.
Immediately after the election, the directorate shall be organized as
such and elect from among themselves a chairman, the President of the
Bank shall be ex-officio vice-chairman, who shall assist the chairman
and act in his stead in case of absence or incapacity. In case of
incapacity or absence of both the chairman and vice-chairman, the Board
of Directors shall designate a temporary chairman from among its
members: Provided, That no director, shareholder or employee of any
other bank shall be eligible as member of the Board of Directors of the
National Bank: Provided, further, That no person shall be elected
director of the Bank unless he is a natural born citizen of the
Philippines, not less than thirty-five years of age, of good moral
character and has attained proficiency, expertise and recognized
competence in one or more of the following: banking, finance,
economics, law, agriculture, business management, public utility or
government administration."
Section 5. Section Eight of Republic Act Numbered
Thirteen Hundred, as amended, is further amended to read as
follows: chanroblesvirtualawlibrary
"Sec. 8. President and Vice-President — Appointment
and Removal — Salaries. — The Chief Executive of the Bank shall be the
President, who shall be elected by the Board of Directors from among
themselves. No person shall be elected President of the Bank unless he
is at least forty years of age, of good moral character and reputation,
with at least ten years previous experience in banking, and has a
reputed proficiency, expertise and recognized competence in banking and
economics, or finance, or management, or government administration, or
law, or agriculture, or industry. He shall be assisted by an executive
vice-president who shall have the same qualifications as the President
who shall have the same qualifications as the President and such number
of senior vice-presidents and vice-presidents as may be necessary for
the efficient operation of the business of the Bank, and who shall be
chosen and may be removed for cause by the Board of Directors. The
salaries of the President, Executive Vice-President, the Senior
Vice-Presidents and Vice-Presidents shall be fixed by the Board of
Directors in line with the policy declared by the President of
the Philippines." chanroblesvirtualawlibrary
Section 6. Repealing Clause. — All acts, executive
orders, administrative orders, proclamations, rules and regulations or
parts thereof inconsistent with any of the provisions of this Act are
hereby repealed or modified accordingly.
Section 7. This Decree shall take effect immediately.
This Decree shall take effect immediately.
Done in the City of Manila,
this 10th day of April, in the year of Our Lord, nineteen hundred and
seventy-three.
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