WHEREAS,
the Philippine National Bank is an instrument of national monetary
policy with a significant role in the economic development of the
country under the program of the New Society; chanroblesvirtualawlibrary
WHEREAS, there is a pressing need for further revising the Charter of
the Philippine National Bank to enable it to effectively carry out the
task of providing the necessary financing for economic development:cralaw:red
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, de hereby
decree and order the 1975 Revised Charter of the Philippine National
Bank as follows:cralaw:red
THE 1975 REVISED CHARTER OF THE PHILIPPINE NATIONAL BANK
Section 1. This Decree shall be known as "THE 1975
REVISED CHARTER OF THE PHILIPPINE NATIONAL BANK."
Section 2. Name — Domicile and place of business —
Branches, agencies and other offices. — There is hereby created a bank
to be known as the Philippine National Bank. Its principal domicile and
place of business shall be in the Greater Manila Area. It may open and
maintain branches, agencies or other offices at such places in the
Philippines or abroad as its Board of Directors may deem feasible, with
the prior approval of the Monetary Board of the Central Bank of the
Philippines.
CORPORATE POWERS
Section 3. Corporate powers. — The Philippine
National Bank, upon its organization, shall be a body corporate and
shall have power: chanroblesvirtualawlibrary
a) To engage in the business of commercial banking by
accepting drafts and issuing letters of credit, discounting and
negotiating promissory notes, drafts, bills of exchange, and other
evidences of debts, receiving deposits, buying and selling foreign
exchange and gold or silver bullion, by acting as financial agent, and
by lending money against personal security or against securities
consisting of personal property or first mortgages on improved real
estate and the insured improvements thereon;chanroblesvirtualawlibrary
b) To accept and execute trusts and to carry on a
general trust business in accordance with the provisions of law
governing trust corporations;chanroblesvirtualawlibrary
c) To hold, own, purchase, acquire, sell mortgage,
dispose or otherwise invest or reinvest in high grade stocks, bonds,
debentures, securities and other evidence of indebtedness of other
corporations and of the government or its instrumentalities which are
issued for or in connection with any project or enterprise;chanroblesvirtualawlibrary
d) To organize and incorporate investment
and/or development financing subsidiaries whose capital stock may be
subscribed in whole or in part by the Bank: Provided, however, That the
controlling interest of not less than sixty-six and two-thirds per cent
(66-2/3%) of the authorized capital stock of such subsidiaries shall at
all times remain with the Bank: Provided, further, That the Bank may
organize and incorporate commercial banking subsidiaries without the
limitations imposed on allied undertakings, subject to the prior
approval of the Monetary Board: Provided, finally, That the
organization and incorporation of such subsidiaries shall be approved
by the President of the Philippines;chanroblesvirtualawlibrary
e) With the approval of the President of the
Philippines, to issue either in the Philippines or externally, all
types of bonds, promissory notes, debentures, certificates of
indebtedness, or other debt instruments whether secured, unsecured or
subordinated obligations, including but not limited to capital notes
under such terms and conditions as may be determined by the Board of
Directors, which may be:cralaw:red
1) Secured by credits against real estate or other
assets of the Bank but not in excess of 90% thereof, or without such
security and purely on an unsecured or subordinated basis;chanroblesvirtualawlibrary
2) Long-term, medium-term or short-term;chanroblesvirtualawlibrary
3) With fixed interest rate or floating interest rate;chanroblesvirtualawlibrary
4) Denominated either in the lawful legal tender of
the Philippines or in such foreign currencies which are eligible for
the foreign exchange reserves of the Central Bank of the Philippines;
and
5) With such other features and requirements which in
its discretion are deemed necessary.
These bonds, debentures, promissory notes, certificate of indebtedness,
or other debt instruments shall be unconditionally guaranteed as to
principal and interest by the Republic of the Philippines: Provided,
however, That the Bank is also authorized to issue these instruments
without the guaranty of the Republic of the Philippines;chanroblesvirtualawlibrary
These bonds, debentures, promissory notes, certificates of
indebtedness, or other instruments, shall be exempt, both as to
principal and interest, from any and all taxes imposed by the
Government or any of its subdivisions;chanroblesvirtualawlibrary
f) To guarantee foreign loans or credit accommodation
extended directly by foreign firms or person to domestic borrowers for
capital investment purposes; (Sec. 74, GBA, modified)
g) To engage or participate in the development of
secondary markets for government securities and short, medium and long
term papers;chanroblesvirtualawlibrary
h) 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 investment in equities shall not exceed twenty-five per
cent (25%) of the net worth of the Bank; (b) the investment in any one
enterprise shall not exceed ten per cent (10%) of the total net worth
of the Bank; (c) the total equity investment of the Bank in any single
enterprise shall remain a minority holding in that enterprise, except
where that enterprise is not a financial intermediary; (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;chanroblesvirtualawlibrary
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;chanroblesvirtualawlibrary
i) To borrow money, or incur indebtedness or contract
obligations in pursuance of its banking operations as set forth in this
decree;chanroblesvirtualawlibrary
j) To engage in the warehousing of rice, corn and
other grains, copra, sugar, tobacco, cotton and other basic commodities
as well as oil, gasoline and petroleum products;chanroblesvirtualawlibrary
k) To act as an official government depository with
full authority to maintain deposits of the government, its branches,
subdivisions and instrumentalities, and of government-owned or
controlled corporations, subject to the provisions of Section 118 of
Republic Act Numbered Two hundred sixty-five, as amended; chanroblesvirtualawlibrary
l) To prescribe its By-laws;chanroblesvirtualawlibrary
m) To adopt and use a seal;chanroblesvirtualawlibrary
n) To make contracts;chanroblesvirtualawlibrary
o) To sue and be sued;chanroblesvirtualawlibrary
p) To acquire, own and hold real and personal
property necessary to carry on its business, introduce improvements
thereon, and to sell, mortgage or otherwise dispose of such property
and improvements in accordance with the policies adopted by the Board;chanroblesvirtualawlibrary
q) To exercise the general powers mentioned in the
Corporation Law and the General Banking Act insofar as they are not
inconsistent or incompatible with the provisions of this Decree, as
well as such incidental powers as may be necessary to carry on and
engage in its business.
CAPITAL
Section 4. Authorized Capital Stock — Par Value —
Government Subscription and Payment — Sale of Shares. — The authorized
capital stock of the Bank shall be increased to TWO BILLION PESOS to be
divided into twenty million shares at par value of one hundred pesos
each. The Government shall increase its paid-in subscription of P700
million as of December 31, 1973 to P1 billion. Payment for the P300
million additional capital contribution to the Government shall be made
as follows:cralaw:red
a) In the form of cash to be authorized under the
corresponding appropriation upon recommendation of the Secretary of
Finance; or
b) In the alternative, in exchange for bonds or other
government securities which the Secretary of Finance is hereby
authorized to issue under such terms and conditions as he may
prescribe. chanroblesvirtualawlibrary
The increase in the authorized capital stock shall be divided into the
following classes of shares:cralaw:red
a) Preferred "A" shares which shall consist of one
million shares available for sale to or subscription by the general
public. These shares shall have the following features:cralaw:red
1) preferred as to dividends at ten per cent (10%);chanroblesvirtualawlibrary
2) Cumulative;chanroblesvirtualawlibrary
3) participating;chanroblesvirtualawlibrary
4) non-voting;chanroblesvirtualawlibrary
5) dividends thereon shall be exempt from income tax;chanroblesvirtualawlibrary
6) redeemable at the option of the Bank at the
prevailing book value but in no case less than par after five (5) years
from issuance thereof; and
7) convertible to Common shares at the option of the
holder in case the Bank fails to pay dividends thereon for two
consecutive years: Provided, however, That if the holder thereof
signifies his intention to convert the Preferred "A" shares to Common
shares, the Bank may, at its option, redeem said shares even before the
lapse of five (5) years counted from date of their issuance. chanroblesvirtualawlibrary
b) Preferred "B" shares which shall consist of two
million shares available for sale to or subscription by citizens of the
Philippines only. These shares shall have the following features:cralaw:red
1) preferred as to dividends;chanroblesvirtualawlibrary
2) cumulative;chanroblesvirtualawlibrary
3) participating;chanroblesvirtualawlibrary
4) non-voting;chanroblesvirtualawlibrary
5) dividends thereon shall be exempt from the income
tax; and
6) convertible to Common at the option of the holder
in case the Bank fails to pay dividends thereon for two consecutive
years.
c) Common "A" shares which shall consist of five
hundred thousand (500,000) shares exclusively available for
subscription at par by officers and employees of the Bank. These shares
shall have the following features:cralaw:red
1) preferred as to dividends;chanroblesvirtualawlibrary
2) cumulative;chanroblesvirtualawlibrary
3) participating;chanroblesvirtualawlibrary
4) non-voting;chanroblesvirtualawlibrary
5) dividends thereon shall be exempt from the income
tax; and
6) non-transferable except to qualified holders as
herein provided.
Transfer of any kind, including that by hereditary succession, to any
person other than officers or employees of the Bank shall not be valid
and shall not be registered in the books of the Bank. Moreover, such
transfer shall give rise to the Bank's right to acquire the shares so
transferred at part. The Board of Directors of the Bank shall prescribe
the terms and conditions for the distribution of Common "A" shares to
officers and employees of the Bank as well as for the Bank's
reacquisition of said shares from the holders thereof upon their
separation from the Bank or upon the transfer of said shares to any
person other than officers or employees of the Bank.
d) The balance of the increase in the authorized
capital stock shall be in Common shares.
The Board of Directors of the Bank may, at its discretion, increase the
number of any of the preferred shares as well as the Common "A" shares
by converting outstanding Common shares, if there are any available, to
such shares desired to be increased. Said increase shall be subject to
the approval of the President of the Philippines upon recommendation of
the Secretary of Finance. The Bank may take the necessary steps to have
its preferred shares listed in any duly registered stock
exchange. chanroblesvirtualawlibrary
Existing private stockholders may exercise their pre-emptive right.
The Government may at any time, upon recommendation by the Secretary of
Finance and the approval of the President of the Philippines, subscribe
to the balance of the Common shares: Provided, however, That upon the
lapse of five years from the listing of the preferred shares in any
duly registered stock exchange, but not later than December 31, 1980,
such preferred shares remaining unsold or unsubscribed shall be
automatically converted to Common shares and subscribed to by the
Government.
Payment of these government subscription may likewise be in the form of
cash to be authorized under the corresponding appropriation that may be
made from time to time or in exchange for bonds or other government
securities which the Secretary of Finance is hereby authorized to issue
under such terms and conditions as he may prescribe. These bonds or
other government securities may be retired in the manner provided for
in this Decree.
The Bank is also authorized to purchase its own shares that are held
privately.
Holders of Land Bank bonds may, under such terms and conditions as may
be prescribed by the Board of Directors of the Bank, exchange such
bonds for shares of the Bank offered for sale to the public.
Section 5. Who may vote Government-owned stock. — The
voting power of all the stock of the Bank owned and controlled by the
Republic of the Philippines shall be vested in the President of the
Philippines, or in such person or persons as he may from time to time
designate. chanroblesvirtualawlibrary
BANKING OPERATIONS IN GENERAL
Section 6. Loans and credit accommodations
authorized. — The Philippine National Bank is hereby authorized:cralaw:red
a) To purchase, discount or negotiate promissory
notes, drafts, bills of exchange and other evidences of debt issued or
drawn for agricultural, export, industrial, commercial and other allied
purposes with collaterals required by the Bank, or the proceeds of
which have been used or are to be used for such purposes;chanroblesvirtualawlibrary
b) To grant loans on, or to discount notes secured by
harvested and stored crops: Provided, That no loan on the security of
such harvested and stored crops shall exceed eighty per centum of the
fair market value thereof on the date of the loan: Provided, further,
That the crops used as collateral shall be insured for the benefit of
the Bank for their entire market value; and Provided, finally, That if
owing to any circumstances whatever, the value of the crops given as
security shall diminish, the debtor and/or mortgagor shall obligate
himself to furnish additional security or refund such part of the loan
as the Bank demand. The maturity of such loans shall not exceed one
year subject to extension, in the discretion of the Bank;chanroblesvirtualawlibrary
c) To grant loans for the production of rice, corn
and other grains, cotton, hemp, coconut, sugar, banana, tobacco, maguey
and other agricultural produce, not in excess of seventy per cent (70%)
of the estimated value of the production: Provided, however, That
before granting such loans, the Bank may require additional securities
in the nature of mortgages on real estate duly registered in the name
of the debtor and/or accommodation mortgagor, or chattel mortgage,
including those upon implements, or personal bonds with sufficient
surety or sureties, satisfactory to the Bank. chanroblesvirtualawlibrary
d) To grant medium-term or long-term loans and
advances against security of real estate and/or other acceptable assets
for the establishment, rehabilitation or expansion of agricultural,
export, industrial and other productive enterprises;chanroblesvirtualawlibrary
e) To grant loans against personal security, or
against security consisting of personal property or first mortgages on
improved real estate and the insured improvements thereon;chanroblesvirtualawlibrary
f) To make loans to any branch, subdivision or agency
of the Republic of the Philippines or to government-owned or controlled
corporations, subject to the conditions that such loans should be for
productive, revenue producing, or socio-economic projects pursuant to
the priorities established in the development program, as certified to
by the National Economic Development Authority, in the amount within
the borrowing entity's paying capacity, duly guaranteed by the National
Government through the Secretary of Finance upon authority of the
President of the Philippines with respect to principal, interest and
other charges: Provided, however, That loans covered by government
guarantees shall not exceed the ceiling prescribed by the Monetary
Board: Provided, finally, That such ceiling on government guarantees
shall exclude loans to government corporations with acceptable
collateral. However, such loans to government corporations shall
nonetheless be subject to the lending ceiling on loans to government
agencies and entities provided for in paragraph d of Section
7. chanroblesvirtualawlibrary
Section 7. Lending Ceilings. — The aggregate amount
of loan that may be granted by the Bank to any individual, partnership,
corporation, industry, or government agency or entity shall be as
follows:cralaw:red
a) The total liabilities to the Bank of any
individual, 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 cent (15%) of the
unimpaired capital and surplus of the Bank;chanroblesvirtualawlibrary
b) The Bank shall not make any loan upon the stock of
any other corporation as collateral if the market value of all such
stocks held as collateral exceeds an amount equal to fifteen (15%) per
centum of the unimpaired capital stock and surplus of the Bank;chanroblesvirtualawlibrary
c) The aggregate amount of loan for any single
industry shall at no time exceed thirty per cent (30%) of the Bank's
lending capacity. Lending capacity of the Bank shall be defined as the
maximum expansion for loans and credits that the Bank is authorized to
grant or extend which shall be computed as ten (10) times the Bank's
unimpaired capital and surplus, minus risk assets as defined herein,
plus the following:cralaw:red
1) Loans guaranteed by the government;chanroblesvirtualawlibrary
2) Loans fully secured by the holdout deposit;chanroblesvirtualawlibrary
3) Customer's liability acceptances covered by
marginal deposits on letters of credit;chanroblesvirtualawlibrary
Risk assets is defined as total assets minus the following:cralaw:red
1) Cash on hand;chanroblesvirtualawlibrary
2) Amount due from the Central Bank;chanroblesvirtualawlibrary
3) Evidences of indebtedness of the Republic of the
Philippines and of the Central Bank, and any other evidences of
indebtedness or obligations the servicing and repayment of which are
fully guaranteed by the Republic of the Philippines;chanroblesvirtualawlibrary
4) Loans to the extent covered by holdout on, or
assignment of, deposit maintained in the lending bank and held in the
Philippines;chanroblesvirtualawlibrary
5) Loans or acceptances under letters of credits to
the extent covered by margin deposits; and
6) Other non-risk items which the Monetary Board of
the Central Bank may, from time to time, authorized to be deducted from
total assets;chanroblesvirtualawlibrary
d) The aggregate amount of loans to Government
agencies and entities including government-owned and/or controlled
corporations shall at no time exceed the advances, deposits and paid-in
capital contributions of the Government, plus twenty per cent (20%) of
such total, except in emergency situations as determined by the
Monetary Board of the Central Bank;chanroblesvirtualawlibrary
e) The aggregate of long term loan and advances which
the Bank may grant against security of real estate or other acceptable
assets for the establishment, repairs or expansion of agricultural,
export, industrial or any other productive enterprise shall not exceed
the sum of the paid-up capital and unimpaired surplus, long-term
indebtedness and obligations plus thirty per cent (30%) of the total
deposit liabilities of the Bank. chanroblesvirtualawlibrary
Section 8. The following transactions shall be
excluded in the computation of the lending ceilings:cralaw:red
a) The discount of bills of exchange drawn in good
faith against actually existing values and discount of commercial or
business paper actually owned by the person negotiating the same shall
not be considered as money borrowed;chanroblesvirtualawlibrary
b) Loans secured by obligations of the Central Bank
or of the Philippine government;chanroblesvirtualawlibrary
c) Loans fully guaranteed by the government as to the
payment of principal and interest;chanroblesvirtualawlibrary
d) Loans to the extent covered by holdout on, or
assignment of deposits in the Bank and held in the Philippines or
abroad;chanroblesvirtualawlibrary
e) Loans and acceptances under the letter of credit
to the extent covered by margin deposits;chanroblesvirtualawlibrary
f) Loans for the establishment, promotion or
expansion of export trade or industry approved by the Monetary Board of
the Central Bank as excluded in the computation of the lending ceilings;chanroblesvirtualawlibrary
g) Other loans or credits which the Monetary Board of
the Central Bank may, from time to time, determine as excluded in the
computation of lending ceilings upon request of the Board of Directors
of the Bank.
Section 9. Additions to Lending Ceiling. — In
addition to the lending ceiling of fifteen (15%) per cent of the
unimpaired capital and surplus of the Bank referred to in paragraph 'a'
of Section 7, the total liabilities of any borrower may amount to (a) a
further fifteen (15%) per cent 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 cent (125%) of such additional liabilities; (b) a
further twenty (20%) per cent of the unimpaired capital and surplus of
the Bank when the loans are to be utilized for the establishment,
promotion, or expansion of export trade and industry.
BOARD OF DIRECTORS COMPOSITION AND ORGANIZATION
Section 10. Board of Directors — Composition — Per
Diems — Tenure. — The affairs and business of the Bank shall be
directed and its property managed and preserved, unless otherwise
provided in this Decree, 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 meeting of the
Board of Directors.
Section 11. Election of Members of the Board of
Directors — Election of Chairman. — 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, as such, 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 the
members: Provided, That no director, shareholder or employee of any
other bank shall be eligible as member of the Board of Directors of the
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 12. President, Executive Vice Presidents,
Senior Vice President and Vice Presidents — Election, Appointment and
Removal. — The Chief Executive of the Bank shall be the President who
shall be elected by the Board of Directors from among themselves with
the advise and consent of the President of the Philippines. 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, management, or government administration, or law, or
agriculture, or industry. He shall be assisted by one or more Executive
Vice Presidents 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 operations of the business of the Bank, and
who shall be chosen and removed for cause by the Board of Directors
upon recommendation of the President of the Bank. The salaries of the
President, Executive Vice Presidents, 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.
POWERS OF THE BOARD OF DIRECTORS
Section 13. The Board of Directors shall have, among
others, the following duties, powers and authority:cralaw:red
a) To formulate policies necessary to carry out
effectively the provisions of this Decree and adopt such by-laws, rules
and regulations for the effective operation of the Bank, in conformity
with this Decree and existing laws;chanroblesvirtualawlibrary
b) To adopt an annual budget for the effective
operation and administration of the Bank: Provided, that the expenses
for its personnel shall not exceed thirty per cent (30%) of the gross
income of the Bank for the preceding calendar year, including all
salaries, allowances, benefits and other emoluments of whatever kind
and nature;chanroblesvirtualawlibrary
c) To create, establish and operate a "Self-
Insurance System" in order to offset possible damage or loss of cash-in
transit that the Bank may suffer on account of cash and check
remittances to its branches and agencies and vice-versa, as well as
those that may arise from irregular encashments or negotiation of
checks, drafts, telegraphic transfers and similar instruments, or
losses arising from other forms of fraud;chanroblesvirtualawlibrary
d) To create and establish a "Provident Fund" which
shall consist of contributions made both the Bank and its officers or
employees to a common fund for the payment of benefits to such officer
or employee or his heirs under such terms and conditions as the Board
of Directors may fix;chanroblesvirtualawlibrary
e) In its direction, to accept assignments of, or as
payments, certificates of indebtedness of the Government or other such
similar securities: Provided, however, that the authority herein
granted shall not be used as regards backpay certificates: Provided,
further, that if, for any reason whatever, the Bank is compelled by
statute to accept assignments of, or as payment, certificates of
indebtedness, bonds or other such similar Government securities, such
certificates, bonds or securities can be used by the Bank in payment of
any and all taxes;chanroblesvirtualawlibrary
f) To compromise or release, in whole or in part, any
claim or settled liability to the Bank regardless of the amount
involved, under such terms and conditions it may impose to protect the
interests of the Bank. This authority to compromise shall extend to
claims against the Bank;chanroblesvirtualawlibrary
g) To prescribe such terms and conditions for loans
and credits as may be deemed necessary, consistent with the provisions
of this Charter;chanroblesvirtualawlibrary
h) To determine the procedure and requirement for the
acquisition of properties necessary for the business of the Bank;chanroblesvirtualawlibrary
i) To dispose of properties of the Bank, whether used
in the conduct of its business or acquired as a result of its banking
operations, by public bidding or private negotiated sale upon such
terms and conditions as it may impose.
PRESIDENT — POWERS AND DUTIES
Section 14. Powers and Duties of the President. — The
President of the Bank shall, among other powers and duties, execute and
administer the policies, measures, orders and resolutions approved by
the Board of Directors, and direct, and supervise the operations and
administration of the Bank.
Particularly, he shall the power and duty: chanroblesvirtualawlibrary
a) To grant loans with maturities of not more than
one year in sums not exceeding TWO HUNDRED FIFTY THOUSAND PESOS
(P250,000.00) to any individual, partnership or corporation. He shall
submit a report of such loans granted by him under this authority to
the Board of Directors at its next succeeding session;chanroblesvirtualawlibrary
b) To execute all contracts in behalf of the Bank and
to enter into all necessary obligations required or permitted by this
Decree upon proper authorization by the Board of Directors;chanroblesvirtualawlibrary
c) To report weekly to the Board of Directors the
main facts concerning the operations of the Bank during the preceding
week and to recommend changes in rates of discounts or exchange as well
as changes in policies which he may deemed advisable;chanroblesvirtualawlibrary
d) To submit an annual report to the President of the
Philippines on the result of the operations of the Bank;chanroblesvirtualawlibrary
e) To recommend the appointment, promotion, shifting
or removal of all subordinate officers and employees of the Bank;chanroblesvirtualawlibrary
f) To exercise the powers of general supervision and
administration attached to the position of President, and all other
powers that may be granted by the Board;chanroblesvirtualawlibrary
g) To delegate any of his powers, duties or functions
to any official of the Bank, with the approval of the Board of
Directors. chanroblesvirtualawlibrary
LEGAL COUNSEL
Section 15. Legal Counsel. — Any provision of laws,
existing executive orders and administrative orders to the contrary
notwithstanding, all legal cases and matters of the Philippine National
Bank shall be exclusively handled, controlled and supervised by a Chief
Legal Counsel of the Bank who shall be chosen and may be removed for
cause by the Board of Directors.
AUDITING DEPARTMENT
Section 16. Bank Auditor and personnel of the
Auditing Department — Appointment and removal — Salaries and expenses —
Audit reports. — The Commission on Audit shall be ex-officio auditor of
the Philippine National Bank and shall, with the approval of the Board
of Directors and the President of the Philippines, appoint a Bank
Auditor who shall be the head of the Auditing Department of the Bank.
The provisions of other laws to the contrary notwithstanding, the
salary of the Bank Auditor shall be fixed by the Commission on Audit,
with the approval of the Board of Directors and the President of the
Philippines.
All other employees of the Auditing Department shall be appointed or
removed by the Commission on Audit with the approval of the Board of
Directors, subject to the Civil Service Law and the established
personnel policies of the Bank. In making these appointments, the
Commission on Audit shall be guided by a list of qualified and eligible
personnel to be submitted by the Bank Auditor with a certification that
merit and seniority have been strictly observed. The salaries of these
employees shall be fixed by the Commission on Audit, with the approval
of the Board Directors and the President of the Philippines, in
accordance with the job evaluation program of the Bank. The Bank
Auditor and his subordinate personnel shall also receive such
allowances and privileges as may be authorized and approved by the
Board of Directors. chanroblesvirtualawlibrary
The operating expenses of the Auditing Department, including salaries
and traveling expenses of the employees thereof, shall be payable by
the Bank. The Board of Directors shall make the necessary appropriation
therefor which shall not exceed three (3%) per cent of the gross income
of the Bank during the preceding calendar year.
The Bank Auditor shall, quarterly or as often as the exigencies of the
service may require, submit an audit report on the financial condition
of the Bank, as well as the result of its operation, to the President
of the Philippines, the Secretary of Finance, the Commission on Audit
and the Board of Directors of the Bank. The report shall contain, among
other things, a statement of resources and liabilities, earnings and
expenses, the amount of capital stock, dividends paid, surplus
reserves, undivided profits, as well as the losses, bank debts,
suspended and overdue papers carried in the Bank's assets as of the day
in which the statements are compiled.
APPOINTMENT AND REMOVAL OF THE OTHER OFFICERS AND EMPLOYEES OF THE
PHILIPPINE NATIONAL BANK
Section 17. Other officers and employees, appointment
and removal — Salaries. — All other officers and employees of the Bank
shall be appointed and removed by the Board of Directors, on
recommendation of the President. Said officers and employees shall
belong to the exempt category under the Civil Service Law by reason of
the technical nature of their employment. Officers may be transferred
or re-assigned according to the sound judgment of the Board of
Directors. The duties and compensation of said officers and employees
shall be fixed by the Board of Directors upon recommendation of the
President: Provided, That whenever the Chairman or any member of the
Board, by order of the Board of Directors, shall temporarily or
permanently perform duties incumbent upon other officers, they may be
granted compensation therefor, subject to the written approval of the
President of the Philippines. chanroblesvirtualawlibrary
Section 18. Officers and employees prohibited from
striking. — It is declared policy of this Decree that the Bank is an
instrument of national monetary policy and its operation affect
national interest. Accordingly, the officers and employees of the Bank
shall not strike for the purpose of securing changes or modifications
in their terms and conditions of employment but such officers and
employees may belong to any labor organization which does not impose
the obligation to strike or to join in strike.
CONFIDENTIAL INFORMATION
Section 19. Inspection of the Bank; prohibition on
persons authorized to inspect Bank's condition. — The Bank shall be
subject to inspection by the appropriate department of the Central Bank
of the Philippines.
The head of the said department making the examination and his agent,
the Chairman and members of the Commission on Audit and their
representatives, or other officers designated by law to inspect or
investigate the condition of the Bank shall not reveal to any person
other than the President of the Philippines, the Secretary of Finance,
the Monetary Board of the Central Bank and the Board of Directors, the
details of the inspection or investigation.
Section 20. Confidential Information. — Banking
transactions relating to loans, credit accommodations, and all deposits
of whatever nature are confidential in character and may not be
examined, inquired or looked into by any person, government official,
bureau or office, except as provided in the preceding Section, or upon
written permission of the client, or upon order of a competent court,
after due hearing, and only in cases where the money deposited or the
transaction concerned is the subject matter of the litigation.
Production of banking records or giving testimony relative to the
details of Bank transactions or deposits may be ordered by a competent
court only after formal notice and hearing and due finding that the
transactions or deposits to which they pertain are the subject matter
of the litigation, or in cases of impeachment, bribery, or dereliction
of duty of public officials, or for violations of the Anti-Graft and
Corrupt Practices Law.
Section 21. Prohibition on Officers and Employees of
the Bank. — Except in the situations authorized in Section 19 and 20,
no officer or employee of the Bank shall reveal to any third person,
government official, bureau or office any information relative to the
details of banking transactions, all deposits of whatever nature, and
such other matters which the Board of Directors may classify as
confidential in character, unless authorized by the Board of Directors.
This prohibition shall not apply to the exchange of credit information
among government financial institutions or among banks, in accordance
with established banking practices.
PROHIBITION AGAINST OWNING STOCKS IN OR BEING INDEBTED TO THE BANK
Section 22. Prohibition against owning stock in or
incurring indebtedness to the Bank. — The Secretary of Finance, the
Governor of the Central Bank and the members of the Monetary Board of
the Central Bank, the officers and employees of the appropriate
department of supervision of the Central Bank, the officials of the
NEDA, the Chairman and members of the Commission on Audit, the Bank
Auditor and the employees of the Auditing Department are prohibited
form owning stock of the Bank in their personal capacity or from
becoming directly or indirectly indebted or liable for any credit
accommodation to the Bank.
This prohibition shall become effective one year from the date of
approval of this Revised Charter.
PROHIBITED TRANSACTIONS AFFECTING BANK PERSONNEL
Section 23. Loans to officers, directors and
employees — Restriction and limitations. — The National Bank shall not,
directly or indirectly grant loans to any director, officer, employee,
or agent of the Bank, and no loan shall be granted to a corporation,
partnership, or company wherein any member of the Board of Directors is
a shareholder, agent, or employee in any manner, except by the
unanimous vote of the members of the Board present, excluding the
member interested: Provided, That the total liabilities to the Bank of
any corporation wherein any of the members of the Board of Directors is
a shareholder, agent or employee in any manner, shall at no time exceed
five per centum of the surplus and paid-up capital of the Bank.
DISPOSAL OF REAL ESTATE ACQUIRED IN THE COLLECTION OF DEBTS
Section 24. Disposal of real estate and other
properties in the collection of debts. — Real estate and other
properties acquired by the Bank in the collection of debts or
investments by way of foreclosure or other means shall be sold or
disposed of in accordance with the policies and guidelines adopted by
the Board of Directors, within five years after date of their
acquisition.
The sale or disposal shall be effected either by private negotiations
and sale or by public bidding, in accordance with the policies and
guidelines to be established by the Board of Directors. chanroblesvirtualawlibrary
Section 25. Right of redemption of foreclosed
property — Right of possession during redemption period. — Within one
year from the registration of the foreclosure sale of real estate, the
mortgagor shall have the right to redeem the property by paying all
claims of the Bank against him on the date of the sale including all
the costs and other expenses incurred by reason of the foreclosure sale
and custody of the property, as well as charges and accrued interests.
The Bank may take possession of the foreclosed property during the
redemption period. When the Bank takes possession during such period,
it shall be entitled to the fruits of the property with no obligation
to account for them, the same being considered compensation for the
interest that would otherwise accrue on the account. Neither shall the
Bank be obliged to post a bond for the purpose of such possession.
RIGHT TO DEMAND ADDITIONAL COLLATERALS IN CASE OF DEFICIENCY
Section 26. Right to demand additional collaterals in
case of deficiency; advance maturity of obligations — Disposal of the
collaterals — Right to collect deficiency. — If for any cause
whatsoever any of the collaterals accepted by the Bank as security for
loans or other credit accommodations should decline or depreciate in
market value in whole or in part, or upon breach of any terms and
conditions contained in the contracts executed by the debtors, or in
case of multiple obligations with common collaterals, one of more but
not all obligations are due and demandable, the Bank may demand
additional collaterals or may forthwith declare any such obligation due
and payable. In case of failure to put up the required collaterals, the
Bank may, upon three (3) days notice, sell the said collaterals, either
in whole or in part, at a public or private sale at the option of the
Bank. At such public sale, the Bank may itself purchase the whole or
any part of the properties sold. In case of a private sale, after
deducting all costs or expenses of any kind for collection, sale or
delivery, the Bank shall apply the proceeds of the sale to payment of
the obligations and in case there is any deficiency, the debtor shall
remain liable to the Bank for such deficiency arising form the sale or
sales. chanroblesvirtualawlibrary
RIGHT OF THE DEBTOR TO THE SURPLUS OF SALES PROCEEDS AND LIABILITY FOR
DEFICIENCY
Section 27. The right of the debtor to surplus and
his liability for deficiency. — The debtor shall be entitled to collect
from the Bank that portion of the proceeds of the sale in excess of his
total outstanding obligations, including interests, charges thereon and
other expenses in the sale. If the proceeds of the sale of the
collaterals do not cover the full amount of the obligations together
with interest and charges thereon and the expenses of the sale, the
debtor shall be liable for the difference and the Bank may proceed by
legal action against him for deficiency.
This provision shall likewise apply to the sale of pledged properties.
Section 28. Prohibition against writing-off of loans
without prior Central Bank approval. — Writing-off of loans and
advances with an outstanding amount of one hundred thousand pesos or
more shall require the prior approval of the Monetary Board of the
Central Bank of the Philippines.
Section 29. Application of the Revised Penal Code. —
The provisions of Title Four, Chapter One of Act Numbered Thirty-Eight
Hundred and Fifteen, known as the Revised Penal Code, are hereby made
applicable to violations of law consisting in the making or causing to
be made, and circulating or causing to be circulated, forged notes and
bonds in imitation of those of the Bank.
Section 30. Prohibited Interest or Fees With
Reference to Obtaining Loans. — A director, officer, employee, or agent
of the Bank shall not directly or indirectly have any pecuniary
interest in any loan from the Bank. Neither shall he charge, exact,
demand or receive any fee, charge or commission in any form for his
service or the use of his influence in obtaining a loan. Any violation
of this Section shall be punished as hereinafter established in Section
37 of this Decree. chanroblesvirtualawlibrary
NET PROFITS
Section 31. Allocation of net profits. — At the close
of the calendar year, the Bank shall determine the net results of its
operations in the calculation of which adequate allowances shall be
made for probable losses. Of the net profits arrived at, at least fifty
(50%) per cent shall be set aside for the declaration of dividends
corresponding to the shares of the Government and the private
stockholders. The remaining net profits shall be accumulated in the
surplus account which shall be utilized for such purposes as may be
authorized by the Board of Directors.
DIVIDENDS OF GOVERNMENT SHARES
Section 32. Payment of dividends corresponding to
Government-owned shares. — The dividends declared corresponding to the
shares of the Government shall be set aside and are hereby appropriated
to form a special securities sinking fund which shall be used for the
sole purpose of retiring the Government bonds and/or other securities
issued by the Secretary of Finance pursuant to Section Four of this
Revised Charter. This special fund shall be deposited with the Bank
which it was created shall have been accomplished. Any and all income
that may accrue thereon shall form part of the fund. After the
retirement and payment of the bonds, including the interest thereon,
shall have been made from the special fund, the residue remaining shall
be used to pay for additional Government subscription that may be
authorized by the President of the Philippines on the unissued shares
of the authorized capital stock of the Bank. Thereafter, all dividends
corresponding to the Government-owned shares shall be paid into the
Treasury of the Philippines for the general funds thereof. chanroblesvirtualawlibrary
TAX ON TRANSACTIONS WITH THE REPUBLIC AND ITS AGENCIES
Section 33. Documentary and science stamp taxes. —
Documents, instruments, or deeds of any kind, stock certificates,
checks, drafts, acceptances, certificates of deposit, bills of
exchange, promissory notes, letters of credit, indemnity and/or
performance bonds, or similar instruments made, issued, signed,
accepted, or transferred by the Bank in favor of, or for the account or
benefit of the Republic of the Philippines, its branches, subdivisions,
or instrumentalities shall be exempt from any and all documentary and
science stamp taxes upon approval of the Secretary of Finance.
LEGAL EXISTENCE
Section 34. Term of Legal Existence. — The legal
existence of the Bank shall be for a period of fifty years, counting
from the date of approval of this 1975 Revised Charter of the Bank.
ILLEGAL USE OF THE WORD "NATIONAL"
Section 35. Prohibition against use of word
"National" — Penalty for violation. — All banks other than the
Philippine National Bank and such other banks now licensed to do
business in the Philippines whose name already includes the word
"National" are prohibited from using the word "National" as portion of
their name or title, and any violation of this prohibition shall
subject the party chargeable therewith to a penalty of not less than
one hundred pesos for each day during which it is committed or repealed.
REPEAL AND SEPARABILITY CLAUSES
Section 36. Repeal of Acts inconsistent herewith. —
All acts, executive orders, administrative orders, proclamations, rules
and regulations or parts thereof inconsistent with any of the
provisions of this Decree are hereby repealed or modified
accordingly. chanroblesvirtualawlibrary
If any provision or section of this Decree or the application thereof
to any person, association or circumstances is held invalid, the other
pertinent provisions or sections of this Decree and their application
to such person, association or circumstances shall not be affected
thereby.
PENALTIES
Section 37. Penalties for violation of the provisions
of this Decree. — Any director, officer, employee or agent of the Bank,
who violates or permits the violation of any of the provisions of this
Decree, or any personding or abetting the violations of any of the
provisions of this Decree, shall be punished by a fine not to exceed
ten thousand pesos or by imprisonment of not more than five years or
both such fine and imprisonment. chanroblesvirtualawlibrary
Section 38. The provisions of Republic Act numbered
Two hundred and sixty-five, as amended, and Three hundred thirty-seven,
as amended, insofar as they are applicable and not in conflict with any
provision of this Decree, shall apply to the Philippine National Bank.
Section 39. This Decree shall take effect upon its
approval.
Done in the City of Manila,
this 8th day of May, in the year of Our Lord, nineteen hundred and
seventy-five.
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