Article 162Supplement v1, p. 162

COMMERCIAL LAWS SUPPLEMENT

Section 19. The Central Bank of the Philippines shall

extend technical assistance to any rural bank in the

process of organization or during the course of operations

whenever it is requested to do so or whenever the

Monetary Board deems it necessary to preserve, protect

and

promote

the

objectives

of

this

Act:

Provided,

however, That said assistance shall be without cost or

obligation on the part of the rural bank.

Section 20. Any city or municipal trial court in his

capacity as notary public ex officio shall administer the

oath to or acknowledgement the instruments of any rural

bank and to borrowers or mortgagors, fee from all

charges, fees and documentary stamp tax, collectible

under existing laws, relative to any loan or transaction not

exceeding

Fifty

thousand

pesos

(P50,000),

or

such

amount

as

the

Secretary

of

Finance,

upon

recommendation of the Monetary Board may prescribe

as may be necessary to promote and expand the rural

economy.

Section 21 . Any Register of Deeds shall accept from any

rural

bank

and

its

borrowers

and

mortgagors

for

registration, free from all charges, fees and documentary

stamp tax, collectible under existing laws, any instrument,

whether voluntary or involuntary, relating to loans or

transaction extended by a rural bank in an amount not

exceeding

Fifty

thousand

pesos

(P50,000):

Provided,

however, That charges, if any, shall be collectible on the

amount in excess of Fifty thousand pesos (P50,000); and

that in instruments related to assignments of several

mortgage consolidated in a single deed, if any, shall be

levied only on the amount in excess of Fifty thousand

pesos (P50,000) of the consideration in the assignments

of each mortgage, of such amount as the Secretary of

Finance, upon recommendation of the Monetary Board

may prescribe as may be necessary to promote and

expand the rural economy.

Section 22. Any rural bank organized under this Act may,

pursuant to regulations promulgated for the purpose by

the Monetary Board, be required to contribute to the

Central Bank an annual fee to help defray the cost of

maintaining

the

appropriate

supervising department

within the central bank in an amount to be determined

by

the

Monetary

Board

but

in

no

case to exceed

one-fortieth of one percent (1/40 of 1%) of its average total

assets

during

the

preceding

year,

as shown on its

end-of-month balance sheets, after deducting its cash on

hand and amounts due from banks, including the Central

Bank.

Section 23. Every individual acting as officer or employee

of

a

rural

bank

and

handling

funds

or

securities

amounting to Five thousand pesos (P5,000) or more than

one (1) year, shall be covered by an adequate bond as

determined by the Monetary Board; and the bylaws of the

rural bank may also provide for the bonding of other

employees or officers of rural banks.

Section 24. For the purpose of carrying out the objectives

of this Act, the Central Bank is authorized to require the

services

and

facilities

of

any

department

or

instrumentality of the Government or any officer or

employee

of

any

such

department

or

government

instrumentality.

Section 25. Rural banks organized and operated under

the provisions of this Act shall act as agents of the

Philippine

National

Bank,

the

Land

Bank

of

the

Philippines and the Development Bank of the Philippines

in places where these banks have no offices, subject to

accreditation guidelines.

Section 26. Without prejudice to any prosecution under

any law which may have been violated a fine of not more

than ten thousand pesos (P10,000) or imprisonment of

not less than six (6) months but not more than ten (10)

years, or both, at the discretion of the court, shall imposed

upon:

a. Any officer, employee, or agent of a rural bank who

shall:

1. Make fake entries in any bank report or statement

thereby affecting the financial interest of or causing

damage to, the bank or any person;

2. Without order of a court of competent jurisdiction,

disclose

any

information

relative

to

the

funds

or

properties in the custody of the bank belonging to private

individuals, corporations, or any other entity;

3. Accept gifts, fees or commission or any other form of

remuneration in connection with the approval of a loan

from said bank; or

4. Overvalue or aid in overvaluing any security for the

purpose of influencing in any way the action of the bank

on any loan; or

5. Appear and sign as guarantor, indorser, or surety for

loans granted; or

6. Violate any of the provisions of this Act.

b. Any applicant for a loan from, or borrower of a rural

bank who shall:

1. Misuse, misapply, or divert the proceeds of the loan

obtained by him from its declared purpose; or

2. Fraudulently overvalue property offered as security for

loan from said bank; or

3. Give out or furnish false misrepresentation of material

facts for the purpose of obtaining, renewing, or increasing

a loan or extending the period thereof; or

4. Attempt to defraud the said bank in the event of court

action to recover a loan; or

5. Offer any officer, employee, or agent of a rural bank as a

gift, fee, commission, or other form of compensation in

order to influence such bank personality in approving an

application; or

6. Dispose or encumber the property or the crops offered

as security for the loan.

c. Any examiner, or officer or employee of the Central

Bank of the Philippines or other department, bureau,

office, branch or agency of the Government who is

assigned to examine, supervise, assist or render technical

services to rural banks and who shall connive or aid in the

commission of the same.

Section 27. Any municipal trial court judge or register of

deeds who shall demand or accept, directly or indirectly,

any gift, fee, commission or other form of compensation

in connection with the service, or the registration of

documents required to be as provided in Section 20 and

by said register of deeds as proposed in Section 21 of this

Act, shall be punished by One thousand pesos (P1,000) or

by imprisonment for not more than one (1) year, or both,

at the discretion of the court.

Section 28. Any bank not organized under this Act and

any person, association, or corporation doing the business

of banking, not authorized under this Act which shall use

the words "Rural Bank" as part of the name or title of such

bank or of such person, association, or corporations, shall

be punished by a fine of not less than Fifty pesos (P50) for

each day during which said words are so used.

Section 29. The Monetary Board of the Central Bank shall

submit a report to the Congress of the Philippines as the

end of each calendar year of all the rules and regulations

promulgated by it in accordance with the provisions of

this Act, as well as its other actuations in connection with

rural banks, together with an explanation of its reasons

therefor.

Section 30. If any provision or section of this Act or the

application thereof to any person or circumstances is held

invalid, the other provisions or sections of this Act, and

the application of such provision or section to other

persons or circumstances, shall not be affected thereby.

Section 31. Republic Act No. _____, as amended, is hereby

repealed. The provisions of Republic Act No. 265, as

amended, and Republic Act No. 337, as amended, insofar

as they are applicable and not in conflict with any

provision of this Act, are hereby made a part of this Act.

© Compiled by RGL

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