Capitalization

RA 7906 Ownership and Capital Requirements.

Sec. 8. Ownership. — At least forty percent (40%) of the voting stock of a thrift bank
which may be established after the approval of this Act shall be owned by citizens of the
Philippines, except where a new bank may be established as a result of a merger or
consolidation of existing thrift banks with foreign holdings in which case, the resulting foreign
holdings shall not be increased but may be reduced and, once reduced, shall not be increased
thereafter beyond sixty percent (60%) of the voting stock of thrift banks. The percentage of the
foreign-owned voting stocks shall be determined by the citizenship of individual stockholders
and in case of corporations owning shares, by the citizenship of each stockholder in the said
corporations. Any provision of existing laws to the contrary notwithstanding, stockholdings in a
thrift bank shall be exempt from any ownership ceiling for a period of ten (10) years from the
effectivity of this Act. Sec. 9. Combined Capital Accounts of Thrift Banks. — The combined
capital accounts of each thrift bank shall not be less than an amount equal to ten percent (10%)
of its risk assets which is defined as its total assets minus the following assets: (a) Cash on
hand; (b) Amounts from the Bangko Sentral; (c) Evidences of indebtedness of the Republic of
the Philippines and of the Bangko Sentral, and any other evidences of indebtedness or
obligations the servicing and repayment of which are fully guaranteed by the Republic of the
Philippines; (d) Loans to the extent covered by hold-out on, or assignment of deposits
maintained in the lending bank and held in the Philippines; and (e) Other non-risk items as the
Monetary Board may, from time to time, authorize to be deducted from total assets. The
Monetary Board shall prescribe the manner of determining the total assets of banking
institutions for purposes of this Section.

Thrift Banks

Head Office in National Capital Region (NCR)

Head Office Only P500 million

Up to 10 branches7 750 million
11 to 50 branches8 1.00 billion
More than 50 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 50 branches11 400 million
More than 50 branches12 800 million

Operations

These banks are financial institution that relieve the monopoly stress and offer their
account holders facilities like savings accounts, mortgage loans, etc. The purpose is to accept
deposits and provide mortgage loans to their customers. The interest on the savings deposited
by the customers in the bank is high. In contrast, the customers’ curiosity about the mortgage
loan is relatively lower than commercial banks and credit unions. They formed these thrift banks
to offer their customers mortgage loan facilities, enabling them to make savings from time to
time. It also focuses on relieving the mortgage and lending market from a monopoly of domestic
or foreign banking institutions. These banks also offer mortgages at lower costs and savings
accounts that pay a higher rate of interest in comparison to national and international banking
institutions. These banks operate in the best interest of the local people. For this reason, they
offer savings accounts and mortgage loans that could benefit the locals.

List of Thrift Banks in the Philippines

Various banks are operating as thrifts. A few of them are below: –

 Allied Savings Bank (Now PNB Savings Bank)

 City Savings Bank
 Business and Consumers Bank (A Development Bank)
 Citystate Savings Bank
 Bank One Savings and Trust Corporation
 Legazpi Savings Bank, Inc.
 Luzon Development Bank
 Dumaguete City Development Bank
 EIB Savings Bank, Inc.
 LBC Development Bank
 Lemery Savings and Loan Bank, Inc.
  Cordillera Savings Bank, Inc.
 Sampaguita Savings Bank, Inc.
 GSIS Family Bank
 Liberty Savings Bank Inc.
 BDO Elite Savings Bank, Inc.
 Inter-Asia Development Bank
 ISLA Bank, Inc.
 Life Savings Bank, Inc.

REFERENCES

RA 7906 Ownership and Capital Requirements, (Feb 23,1995)

https://www.bsp.gov.ph/Regulations/Banking%20Laws/RA7906.pdf