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This page features the full text of
Republic Act No. 7353
"Rural
Banks Act of 1992"
AN
ACT PROVIDING FOR THE CREATION, ORGANIZATION AND OPERATION OF RURAL
BANKS,
AND FOR OTHER PURPOSES.
REPUBLIC
ACT NO. 7353AN
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."
chanrobles virtuallaw libraryred
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.chanrobles virtual law library
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. chanrobles virtuallaw libraryred
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.cralaw:red
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 Section 26 of this Act. chanrobles virtuallaw libraryred
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. chanrobles virtuallaw libraryred
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.cralaw:red
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.chanrobles virtuallaw libraryred
A
rural bank shall be allowed to foreclosure lands mortgaged to it;
Provided,
That said lands shall be covered under Republic Act No. 6657.cralaw:red
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. chanrobles virtuallaw libraryred
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.chanrobles virtuallaw libraryred
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. chanrobles virtuallaw libraryred
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 Section 9 of Republic Act No. 337, as amended.cralaw:red
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.cralaw:red
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.
Sec.
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.cralaw:red
Sec.
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. chanrobles virtuallaw libraryred
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 Sections 32, 33
and 34 of Republic Act No. 265, as amended.cralaw:red
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.cralaw:red
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.cralaw:red
Sec.
12. In addition to the operations
specifically authorized in this Act, any rural bank may;
(a) Accept
savings and time deposits; chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(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; chanrobles virtuallaw libraryred
(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 Section 72 of Republic Act No.
337,
as amended; and
(h) Extend
financial assistance to private and public employees in accordance with
the provisions of Sections 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; chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
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 Section 21-B of the same Act.chanrobles virtual law library
Sec.
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; chanrobles virtuallaw libraryred(b) Warehousing
and other post-harvest facilities; chanrobles virtuallaw libraryred
(c) Fertilizer
and agricultural chemical and pesticides distribution;
(d) Farm
equipment distribution; chanrobles virtuallaw libraryred
(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. chanrobles virtuallaw libraryred
Sec.
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; chanrobles virtuallaw libraryred
(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.
Sec.
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. chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
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.chanrobles virtual law library
Sec.
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.cralaw:red
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.chanrobles virtuallaw libraryred
Sec.
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.cralaw:red
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.cralaw:red
Sec.
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.cralaw:red
(a) Its
deposit liabilities shall be subjected to only one third (1/3) of
reserves
normally required for rural banks.chanrobles virtual law library chanrobles virtuallaw libraryred(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 chanrobles virtuallaw libraryred
(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.
Sec.
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.chanrobles virtual law library
chanrobles virtuallaw libraryred
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.chanrobles virtual law library
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. chanrobles virtuallaw libraryred
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.cralaw:red
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.cralaw:red
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.cralaw:red
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.cralaw:red
(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 chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(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 chanrobles virtuallaw libraryred
(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 chanrobles virtuallaw libraryred(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 chanrobles virtuallaw libraryred
(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.chanrobles virtual law library
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 Section 20 and by
said register of deeds as provided in Section 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. chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
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 therefor.cralaw:red
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.cralaw:red
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. chanrobles virtuallaw libraryred
Approved:
April 2, 1992
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