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FINMAN 103 Module II
FINMAN 103 Module II
FINMAN 103 Module II
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MODULE II
Bank Organization, Management,
Supervision and Examination
INTRODUCTION
OBJECTIVES
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Lesson 1
2. Selection of stockholders
The organizers also have to contend themselves with the
selection of the stockholders. This is an essential consideration
in setting up a bank because it is on such choice that a bank
may depend its success or failure. To mention few things, the
organizers have to make sure that these men are of good moral
character, have adequate knowledge on the business of
banking, equipped with the necessary capital, known in the
community as honest and righteous citizens, and above all,
they are both willing and able to contribute to the bank’s
success. Such considerations regarding the tapping of men to
own the bank is of paramount importance because it is from
these group of men that members of the board of directors
may come from.
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a) That there should be not less than five (5) nor more
than fifteen (15) persons initially interested in
organizing and investing in the proposed bank, the
excess may be listed among the original subscribers in
the articles of Incorporation;
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LEARNING ACTIVITY
When the preliminary steps have been tackled, then the organizers
can proceed to the most exacting part of the job – the formal establishment
of the bank itself. In this regard, the Philippine banking laws and the
Corporation Code shall serve as guide to the organizers. To start with, the
New General Banking Act (Republic Act 879) requires that all banks shall be
established as corporations.
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Lesson 2
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Bank Location
Anyone imbued with business sense will perhaps know that the
poor location will be a deterrent to an otherwise profitable venture.
Customers always look for places which offer a wide variety of
conveniences in meeting their needs. Thus, a major importance to
any organizer is the suitable location of the proposed business. There
are many factors which will influence the choice of the bank’s
location. To fulfill the needs of strategies sites, the organizers must
have in mind the availability of transportation. Whether the location
is within the commercial district or not, the accessibility of the place
both to human and vehicular traffic should be considered. Also to
look for is the place’s of provision of facilities comprising consumers’
shopping needs. These will enhance the chances of the bank to
attract the greatest number of potential depositors and customers.
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The Securities and Exchange Commission, for its part, also duly
examines the papers to see to it that all requirements are met before
issuing the certificate of incorporation.
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LEARNING ACTIVITY
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Lesson 3
Board of Directors
1. Every director shall own at least one (1) share of the capital
stock of the corporation of which he is a director; the share
shall stand in his name in the books of the corporation.
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Bank Officers
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The officers of the bank are also responsible for the efficient
and harmonious administration of their duties. It is evident that they
should, therefore, be made liable for any losses incurred by the bank
through their negligence, misconduct, or inefficiency. Hence, men
with moral integrity, intellectual and physical capacities, and wide
and diverse experience in the field of banking and other businesses
are chosen to become officers of a bank.
Bank Operations
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Due to the training one gets from the bottom of the ladder by
actually doing the abovementioned functions, the person involved
would, upon his ascent on the ladder of success, indeed become a
very valuable asset as far as upper bank management is concerned.
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LEARNING ACTIVITY
Read the following and identify the word or group of words that is being
referred to in the sentence:
1. Why are men with moral integrity, intellectual and physical capacities,
and wide and diverse experience in the field of banking and other
businesses are chosen to become officers of a bank.
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Lesson 4
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External Supervision
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(1) file ex parte with the proper regional trial court, and
without requirement of prior notice or any other
action, a petition for assistance in the liquidation of
the institution pursuant to a liquidation plan adopted
by the Philippine Deposit Insurance Corporation for
general application to all closed banks. In case of
quasi-banks, the liquidation plan shall be adopted by
the Monetary Board. Upon acquiring jurisdiction, the
court shall, upon motion by the receiver after due
notice, adjudicate disputed claims against the
institution, assist the enforcement of individual
liabilities of the stockholders, directors and officers,
and decide on other issues as may be material to
implement the liquidation plan adopted. The
receiver shall pay the cost of the proceedings from
the assets of the institution.
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Mechanics of Examination
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Internal Controls
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Programming of Controls
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LEARNING ACTIVITY
Read the following and identify the word or group of words that is being
referred to in the sentence:
2. The first purpose of examination is to find out whether banks are doing
their business in conformity with the banking laws and that of the rules
and regulations of the Bangko Sentral ng Pilipinas and other
governmental agencies. Explain.
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MODULE SUMMARY
Congratulations! You have just studied Module II. Now you are ready
to evaluate how much you have benefited from your reading by answering
the summative test. Good Luck!!!
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SUMMATIVE TEST
When the preliminary steps have been tackled, then the organizers
can proceed to the most exacting part of the job – the formal establishment
of the bank itself. In this regard, the Philippine banking laws and the
Corporation Code shall serve as guide to the organizers. To start with, the
New General Banking Act (Republic Act 879) requires that all banks shall be
established as corporations.
Read the following and identify the word or group of words that is being
referred to in the sentence:
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