ORGANIZATION, MANAGEMENT AND ADMINISTRATION OF BANKS, QUASI-

BANKS AND TRUST ENTITIES

I. Organization of Banks

a. Conditions/requirements:

1. STOCK CORPORATION

RCCP

a. Banks so organized as a stock corporation may only issue par

value stocks
b. SEC. 2. Corporation Defined. – A corporation is an artificial
being created by operation of law, having the right of succession
and the powers, attributes, and properties expressly authorized
by law or incidental to its existence. SEC. 3. Classes of
Corporations. – Corporations formed or organized under this
Code may be stock or nonstock corporations. Stock
corporations are those which have capital stock divided into
shares and are authorized to distribute to the holders of such
shares, dividends, or allotments of the surplus profits on the
basis of the shares held. All other corporations are nonstock
corporations. Page 2 of 73 SEC. 4. Corporations Created by
Special Laws or Charters. – Corporations created by special
laws or charters shall be governed primarily by the provisions of
the special law or charter creating them or applicable to them,
supplemented by the provisions of this Code, insofar as they are
applicable. SEC. 5. Corporators and Incorporators,
Stockholders and Members. – Corporators are those who
compose a corporation, whether as stockholders or
shareholders in a stock corporation or as members in a
nonstock corporation. Incorporators are those stockholders or
members mentioned in the articles of incorporation as originally
forming and composing the corporation and who are signatories
thereof.

i. SEC. 16. Grounds When Articles of Incorporation or

Amendment May be Disapproved. – The Commission may
disapprove the articles of incorporation or any amendment
thereto if the same is not compliant with the requirements of
this Code: Provided, That the Commission shall give the
incorporators, directors, trustees, or officers a reasonable
time from receipt of the disapproval within which to modify
the objectionable portions of the articles or amendment. The
following are grounds for such disapproval: xxx No articles of
 incorporation or amendment to articles of incorporation of
banks, banking and quasi-banking institutions, preneed,
insurance and trust companies, NSSLAS, pawnshops, and
other financial intermediaries shall be approved by the
Commission unless accompanied by a favorable
recommendation of the appropriate government agency to
the effect that such articles or amendment is in accordance
with law.
b. GENERAL BANKING ACT

Section 2. Only duly authorized persons and entities may engage in the
lending of funds obtained from the public through the receipt of deposits or
the sale of bonds, securities, or obligations of any kind, and all entities
regularly conducting such operations shall be considered as banking
institutions and shall be subject to the provisions of this Act, of the Central
Bank Act, and of other pertinent laws.

c. Section 9. The Securities and Exchange Commissioner shall not register

the articles of incorporation of any bank, or any amendment thereto,
unless accompanied by a certificate of authority issued by the Monetary
Board, under its official seal. Such certificate shall not be issued unless
the Monetary Board is satisfied from the evidence submitted to it: (a) that
all the requirements of existing laws and regulations to engage in the
business for which the applicant is proposed to be incorporated have been
complied with; (b) that the public interest and economic conditions, both
general and local, justify the authorization; and (c) that the amount of
capital, the financing organization, direction and administration, as well as
the integrity and responsibility of the organizers and administrators
reasonably assure the safety of the interests which the public may entrust
to them.

d. Section 10. The Securities and Exchange Commissioner shall not register

the by-laws of any bank or banking institution, or any amendment thereto,
unless accompanied by a certificate of the Monetary Board to the effect
that such by-laws or amendment thereto are in accordance with law.

e. Section 12. At least sixty per cent (60%) of the capital stock of any
banking institution which may be established after the approval of this Act
shall be owned by citizens of the Philippines.

f. Section 13. At least two-thirds of the members of the board of directors of

any bank or banking institution which may be established after the
approval of this Act shall be citizens of the Philippines.

g. Section 14. No foreign bank or banking corporation formed, organized or

existing under the laws other than those of the Republic of the Philippines
 shall be permitted to transact business in the Philippines, or maintain by
itself or assignee any suit for the recovery of any debt, claims, or demand
whatsoever, until after it shall have obtained, upon order of the Monetary
Board, a license for that purpose from the Securities and Exchange
Commissioner. Any officer, director or agent of any such corporation who
transacts business in the Philippines without the said license shall be
punished by imprisonment for not less than one year nor more than ten
years and by a fine of not less than one thousand pesos nor more than ten
thousand pesos.

h. For the issuance of such license to any foreign bank, the Securities and
Exchange Commissioner shall collect a fee in proportion to the corporate
capital of such bank in accordance with the schedule established in
section eight of Act Numbered Fourteen hundred and fifty-nine, as
amended.

i. No order for a license shall be issued by the Monetary Board unless and
until it is convinced that the public interest and economic conditions, both
general and local, justify the issuance of such order; that the foreign bank
or banking corporation is solvent and in sound financial condition; and that
a duly appointed agent in the Philippines has been authorized to accept
summons and legal processes.

j. Section 16. The Monetary Board, by the affirmative vote of at least five of

its members and with the approval of the President of the Philippines, may
revoke the license to transact business in the Philippines of any foreign
bank or banking corporation not formed, organized, or existing under the
laws of the Philippines, if the said Board finds after due investigation at
which such bank or banking corporation is given a chance to be heard by
itself or counsel, that the foreign bank or banking corporation is in
imminent danger of insolvency or that its continuance in business will
involve probable loss to those transacting business with it. After the
revocation of its license, it shall be unlawful for any such foreign bank or
banking corporation to transact business in the Philippines unless its
license is renewed or reissued. After the revocation of such license the
Solicitor General shall take such proceedings as may be proper to protect
creditors of such foreign bank or banking institution and the public.

Required
Bank Category Minimum Capitalization

Universal Banks

Head Office Only P3.00 billion

Up to 10 branches1 6.00 billion
11 to 100 branches2 15.00 billion
More than 100 branches3 20.00 billion

Commercial Banks

Head Office Only P2.00 billion

Up to 10 branches4 4.00 billion
11 to 100 branches5 10.00 billion
More than 100 branches6 15.00 billion

Thrift Banks

Head Office in National Capital Region (NCR)

Head Office Only P500 million

Up to 10 branches7 750 million
11 to 100 branches8 1.00 billion
More than 100 branches9 2.00 billion

Head Office in all Other Areas Outside NCR

Head Office Only P200 million

Up to 10 branches10 300 million
11 to 100 branches11 400 million
More than 100 branches12 800 million

Rural Banks and Cooperative Banks

Head Office in NCR

Head Office Only P50 million

Up to 10 branches13 75 million
11 to 100 branches14 100 million
More than 100 branches15 200 million

Head Office in All Other Areas Outside NCR

(All Cities up to 3rd class municipalities)

Head Office Only P20 million

Up to 10 branches16 30 million
11 to 100 branches17 40 million
More than 100 branches18 80 million

Head Office in All Other Areas Outside NCR

(4th class to 6th class municipalities)

Head Office Only P10 million

Up to 10 branches19 15 million
11 to 100 branches20 20 million
More than 100 branches21 40 million