ORGANIZATION,

MANAGEMENT &
ADMINISTRATION
BY GROUP 1
DISCUSSION
OVERVIEW
01 CLASSIFICATIONS AND POWERS OF BANKS

02 HANDS-ON
POWERS AND SCOPE OF AUTHORITIES OF BANKS

03 SECTION X2101.1
 Section X101 Classifications, Powers and
Scope of Authorities of Banks

LASSIFICATIONS
C
OF BANKS
01 Banks are classified into the following subject to the
power of the Monetary Board to create other classes or
kinds of banks:

A. Universal banks (UBs)

B. Commercial banks (KBs)
C. Thrift banks (TBs)
which shall be composed of:
savings and mortgage bank
stock savings and loan associations
private development banks

D. Rural banks (RBs)

E.Cooperative banks (Coop Banks)

F.Islamic banks (IBs)

 POWERS
AND SCOPE OF
AUTHORITIES

02
OF BANKS
UNIVERSAL BANKS
A UB shall have the authority to exercise, in addition to the powers and
services authorized for a KB as enumerated in Item “b(2)” and the
following:

a) the powers of an investment house

(b) the power to invest in non-allied enterprises
(c) the power to own up to one hundred
percent (100%) of the equity in a TB, an RB, a financial allied enterprise, or
a non-financial allied enterprise
(d) in case of publicly-listed UBs, the power
to own up to one hundred percent (100%) of the voting stock of only one other
UB or KB.

A.
 C OMMERCIAL BANKS (KBS)
KB have the powers to exercise all such powers to carry out commercial
banking such as accepting drafts and issuing letters of credit, discounting and
negotiating promissory notes, drafts, bills of exchange and other evidences of
debt, accepting or creating demand deposits, receiving other types of deposit
substitutes, buying and selling foreign exchange and gold or silver bullion,
acquiring marketable bonds and other debt securities, and extending credit.

Commercial banks may also:

(a) Invest in allied enterprises
(b) purchase, hold or convey real estate
(c) receive custody funds, documents and valuable objects
(d) act as financial agent and buy and sell by order of and for the account of
their customers, evidences of indebtedness and all types of securities
(e) make collections and payments for the account of others
(f) upon prior approval of the Monetary Board act as managing agent, adviser,
consultant or administrator of investment accounts
(g) rent out safety deposit box

B.
(h) engage in quasi-banking functions
 THRIFT BANKS (TBS) C.
Thirft banks may perform the following:
(a) grant loans, whether secured or unsecured
(b) invest in readily marketable bonds and other debt securities, commercial papers and accounts receivable,
drafts, bills of exchange, acceptances or commercial notes
(c) Issue domestic letters of credit
(d) extend credit facilities to private and government employees
(e) extend credit against the security of jewelry and similar items
(f) accept savings and time deposits
(g) rediscount paper with Land Bank of the Phils,Devt Bank of the Phils, and other GOCCs
(h) accept foreign currency deposits
(i)  act as correspondent for other financial institutions
(j)  purchase, hold or convey real estate
(k) Offer other banking services provided in Sec 53 of RA no. 8791.
(l) Buy and sell foreign exchange.
With prior approval of the Monetary Board, thrift banks may also:
(m) open current or checking accounts
(n) engage in trust, quasi-banking functions and money market operations
(o)  act as collection agent for government
entities
(p)  act as official depository
or national agencies and local government funds in the local government unit
the bank is located
(q)  issue mortgage and chattel mortgage certificates
(r)   invest in equity of allied undertakings
(s) Issue foreign letters of credit
(t)   Pay/accept/negotiate import/export draft bills of exchange
 RURAL BANKS (RB’S)
Rural banks may perform the following:
(a)     extend  loans and advances to farmers, fishermen, farm families,
cooperatives, merchants, private and public employees
(b)     accept savings and time deposits
(c)     act as correspondent for other financial institutions
(d)     rediscount paper with Land Bank of the Phils, Devt Bank of the Phils or
any other bank
(e)      act as collection agent
(f)      offer other banking services provided in Sec 53 of RA 8791. 
(g)     buy and sell foreign exchange
D.
With prior approval of the Monetary Board, an RB may perform:
(h)     accept current or checking account provided rural bank has a net asset
of at least PHP5 million
(i)      accept negotiable order of withdrawal accounts
(j)      act as trustee over estates/properties of farmers and merchants
(k)     act as official depository of local government unit in the local
government unit where bank is locates
(l)      sell domestic drafts
(m)   invest in allied undertakings.
 C OOPERATIVE  BANKS

 A COOP BANK SHALL PRIMARILY PROVIDE

FINANCIAL, BANKING AND CREDIT SERVICES
COOPERATIVES AND THEIR MEMBERS, AND TO
GENERAL PUBLIC. IT MAY ALSO PERFORM ANY
OR ALL OF THE BANKING SERVICES OFFERED
BY OTHER TYPES OF BANKS SUBJECT TO PRIOR
APPROVAL OF THE BSP.
E.
 ISLAMIC BANKS
An islamic bank, insofar as not inconsistent or incompatible with RA 6848, may
perform:

(a) open savings accounts for safekeeping with no participation in profit or loss
unless authorized by the holder
(b) accept investment account placements and invest the same for a term with the
bank's funds in Islamically permissible transactions on participation basis
(c)  accept foreign currency deposits
(d)  buy and sell foreign exchange
(e)  handle remittances and fund transfers
(f)   accept drafts and issue letters of credit, negotiate notes and bills of exchange
and other evidence of indebtedness
(g) act as collection agent
(h)  provide financing
(i)   handle storage operations for goods or commodity financing
(j)   issue shares for the account of institutions and companies assisted by the bank
(k)  undertake various investments in all transactions allowed by Islamic Shari'a

F.
(l)   other services allowed by Monetary Board.
 3. SECTION X2101.1
AUTHORITY OF THRIFT BANKS TO
ISSUE FOREIGN LETTERS OF
CREDIT AND
PAY/ACCEPT/NEGOTIATE
IMPORT/EXPORT DRAFTS/BILLS
OF EXCHANGE
With the prior of the monetary board approval, TB’s may be authorized to
issue foreign letters of credit and pay, accept, negotiate import or export
draft/bills of exchange, subject to compliance with the following conditions:
(a)    A minimum capital requirement of 1.0 Billion
(b)   Ten percent ( 10% ) risk based capital adequacy ratio (CAR)
(c)    CAMELS composite rating not lower “3” with management component
score not lower than “3” in the latest examination of the banks.
(d)   The Risk management system should be appropriate to its appropriate
to its operation, characterized by clear delineation of responsibility for risk
management, adequate risk management system, appropriately structured risk
limit, effective internal control system and complete, timely and efficient
risk reporting system.
(e)   Articles of incorporation
Add a little bit with
(f)     Correspondent banking relationship of bodyreputable
text foreign banks.
(g)    Appointment of the officer with actual 2 years of experience as in charge in the or at least
assistant in charge of import and export financing operations in a UB/KB who will be in charge of the
said operations.
(h)   Appointment of bank personnel with actual experience or specific training in import or export
financing operations who will handle the said operations.
(i)      No net weekly regular and liquidity reserve deficiencies during the
12 week period to the preceding the date of application.
(j)     No deficiency in asset and liquid asset cover for FCDU liabilities for 3 months.
(k)    No deficiency in liquidity floor requirement for government funds held during 12 week period.
(l)      No float items outstanding for more than 60 calendar days in the Due to/from head
offices/department and from BSP accounts exceeding 1 percent of the total resources.
(m) No unbooked valuations reserve
(n)   Compliant with the single borrowers loan limit.
(o)   Compliant with the limit on real estate and improvements including
bank equipment.
(p)   No uncorrected finding and unsafe and unsound banking practices.
(q)   Generally compliant with banking laws,rules, and regulations.
(r)     No past due obligations with the BSP or with any FI.
THANKS
A LOT
BY GROUP 1