GENERAL BANKING LAW permission.

The Human Security Act does not have

a provision overriding the secrecy of foreign
-Fit and Proper Rule is a rule that provides that in
currency deposits.
order to maintain the quality of bank management
and afford better protection to depositors and the
public in general, the Monetary Board shall
-Under the PDIC Charter, splitting of deposits occurs
prescribe, pass upon and review the qualifications
whenever a deposit account with an outstanding
and disqualifications of individuals elected or
balance of more than ₱500,000 maintained under
appointed bank directors or officers and disqualify
the name of natural or juridical persons is broken
those found unfit. After due notice to the board of
down and transferred into two or more accounts in
directors of the bank, the Monetary Board may
the name/s of natural or juridical persons or entities
disqualify, suspend or remove any bank director or
who have no beneficial ownership on transferred
officer who commits or omits an act which render
deposits in their names within 120 days
him unfit for the position. In determining whether
immediately preceding or during a bank-declared
an individual is fit and proper to hold the position of
bank holiday, or immediately preceding a closure
a director or officer of a bank, regard shall be given
order issued by the Monetary Board for the
to his integrity, experience, education, training, and
purpose of availing of the maximum deposit
competence. (Section 16, R.A. 8791)
insurance coverage. It is punishable as a crime. (Sec.
26).
-DOSRI stands for Directors, Officers, Stockholders
and their Related Interests. The DOSRI rule provides
-Under the Anti-Money Laundering Act, the AMLAC
that no director or officer of any bank shall, directly
may apply for a bank inquiry order from the Court
or indirectly, for himself or as the representative or
of Appeals if there is probable cause that the bank
agent of others, borrow from such bank nor shall he
deposit relates to an unlawful activity, such as the
become a guarantor, endorser or surety for loans
violation of the Anti-Graft Law and Plunder; that the
from such bank to others, or in any manner be an
power of the AMLAC to inquire under the Anti-
obligor or incur any contractual liability to the bank,
Money Laundering Act is an exception to the
except with the written approval of the majority of
Foreign Currency Deposit Act.
all the directors of the bank, excluding the director
concerned. The purpose of the rule is to ensure that
all dealings of a bank with any of its directors,
officers or stockholders and their related interests -the Anti-Money Laundering Council as a rule does
shall be upon terms not less favorable to the bank not have the authority to freeze bank deposits. The
than those offered to others. (Section 36, R.A. exception would be under the Terrorism Financing
8791). Prevention & Suppression Act of 2012 which
provides that upon its own initiative, or at the Anti-
Terrorism Council’s request, the AMLC may issue an
ex parte order to freeze without delay property or
-The Supreme Court has held that the powers of a
funds: (a) related in any way to TF or terrorism; or
conservator to revoke the previous actions of the
(b) of any person, group of persons, terrorist
management or board of a bank does not extend to
organization, or association, in relation to whom
perfected contracts, otherwise the obligation of
there is probable cause to believe that they are
contracts would be impaired.
committing or attempting or conspiring to commit,
or participating in or facilitating the commission of
financing of terrorism or acts of terrorism. The
-Under Banking Law, a bank placed under
freeze order shall be effective for a period not
receivership may no longer be rehabilitated. [Sec.
exceeding 20 days, but may be extended for up to 6
30, NCBA, as amended by RA 11211; Sec. 12(a),
months by the CA. [Sec. 11, TFPSA.
PDIC Charter].

-The order of the Monetary Board may be

-Under Banking Law, the receiver may terminate or
questioned on a petition for certiorari on the
revoke any contract that is grossly disadvantageous
ground that the action taken was in excess of
to the closed bank.
jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction. The
petition of certiorari may only be filed by the
-Under the Law on Bank Secrecy, foreign currency
stockholders of record representing the majority of
deposits are confidential and may not be inquired
the capital stock within 10 days from receipt by the
into except upon the depositor’s written
board of directors of the bank of the order directing to the first degree of affinity or consanguinity. The
receivership, liquidation or conservatorship. Brothers are second degree relatives and as such,
cannot be considered DOSRI accounts.

- the maximum number of BOD in a merge bank is

21. -

-Bank deposits are funds obtained by a bank from

the public which are relent by such bank to its own
borrowers. Deposit substitutes are alternative
forms of obtaining funds from the public, other
than deposits, through the issuance, endorsement,
or acceptance of debt instruments for the own
account of the borrower, for the purpose of
relending or purchasing of receivables and other
obligations. These instruments may include, but
need not be limited to, bankers acceptances,
promissory notes, participations, certificates of
assignment and similar instruments with recourse,
and repurchase agreements.

-Under the new General Banking law ( RA 8791 ),

banks are now allowed to grant loans against the
security of its own shares as long as this is done
with prior BSP approval but in case of foreclosure,
the foreclosed shares must be disposed of within 6
months from acquisition.

-Under the single borrower’s limit, the total amount

of loans, credit accommodations and guarantee
that the bank may extend to any person shall not
exceed 25% of the bank’s net worth. While the law
sets the ceiling at 20% of the bank’s networth, it
also empowers the BSP to modify the ceiling. The
current SBL as set by BSP is 25% of the Bank’s net
worth.

-Restricition on DOSRI transactions:

(I)The Transanctions must be approved by at least

majorityy of the entire board excluding the director
concerned;

(II) The required approval shall be entered upon

the records he bank and copy of such entry shall be
submitted to the BSP;

(III) Unless the loan is non-risk, the loan must not

exceed the book value of the paid up shares of the
borrowing DOSRI and the amount of unencumbered
deposits. (Section 36 of RA 8791).

-The "related interest" referred to under DOSRI

extends only to the spouse of any Director, Officer
or Stockholder, his ascendants and descendants up