Article 172Supplement v1, p. 172

COMMERCIAL LAWS SUPPLEMENT

owned by the person negotiating the same, shall not be

considered as money borrowed for the purpose of this

Section: Provided , finally , That certain types of contingent

liabilities of borrowers may be included among the total

liabilities as may be determined by the Monetary Board.

Loan accommodations granted by thrift banks to any

other bank, as well as deposits maintained by them in

any bank licensed to do business in the Philippines, shall

be subject to the loan limit of any single borrower as

herein prescribed.

SECTION 12. Investment in Allied Undertakings . — Subject

to such guidelines as may be established by the Monetary

Board,

thrift

banks

may

invest

in equities of allied

undertakings as hereinafter enumerated: Provided , That:

(a) the total investments in equities shall not exceed

twenty-five percent (25%) of the net worth of the thrift

bank; (b) the equity investment in any single enterprise

shall be limited to fifteen percent (15%) of the net worth of

the thrift bank; (c) the equity investment of the thrift bank

in any single enterprise shall remain a minority holding in

that enterprise; and (d) the equity investment in other

banks shall be subject to the same provisions governing

similar investments of commercial banks and shall be

deducted from the investing bank's net worth for the

purpose of computing of the prescribed ratio as provided

in

Section

9

hereof:

Provided ,

further ,

That

equity

investments

shall

not

be

permitted

in

non-related

activities.

Where

the

allied

activity

is

a

wholly-

or

majority-owned subsidiary of the thrift bank, the Bangko

Sentral may subject it to examination.

Investment in allied undertaking shall include institutions

engaged in the following activities:

(a) Banking and financing;

(b) Warehousing and other post-harvesting activities;

(c) Fertilizer and agricultural chemical and pesticides

distribution;

(d) Farm equipment distribution;

(e) Trucking and transportation of agricultural products;

(f) Marketing of agricultural products;

(g) Leasing; and

(h) Other undertakings as may be determined by the

Monetary Board.

CHAPTER V Supervision

SECTION 13. Supervisory Powers of the Monetary Board .

— The power to supervise the operation of any thrift bank

by the Monetary Board shall consist in placing limits to

the maximum credit allowed to any individual borrower;

in indicating the manner in which technical assistance

shall be extended to thrift banks; in imposing a uniform

accounting system and manner of keeping the accounts

and records of thrift banks; in instituting periodic surveys

of loans and lending procedures, audits, test-check of

cash

and

other

transactions

of

the thrift banks; in

conducting training courses for personnel of thrift banks;

and, in general, in supervising the business operations of

the thrift banks.

The Bangko Sentral shall have the power to enforce the

laws,

orders,

instructions,

rules

and

regulations

promulgated by the Monetary Board applicable to thrift

banks; to require thrift banks, their directors, officers and

agents to conduct and manage the affairs of the thrift

bank in a lawful and orderly manner; and upon proof that

the thrift bank or its board of directors or officers are

conducting and managing the affairs of the bank in a

manner contrary to laws, orders, instructions, rules and

regulations promulgated by the Monetary Board or in a

manner substantially prejudicial to the interest of the

government, depositors, creditors, or the general public,

to appoint a conservator pursuant to Section 29 of

Republic

Act

No.

7653

without

prejudice

to

the

prosecution of persons responsible for such violations

under the provisions of Sections 36 and 37 of Republic Act

No. 7653 .

The director and examiners of the department of Bangko

Sentral charged with the supervision of thrift banks are

hereby authorized to administer oaths to any director,

officer or employee of any thrift bank or to any voluntary

witness and to compel the presentation of all books,

documents, papers or records necessary in his or their

judgment to ascertain the facts relative to the true

conditions of any thrift bank or to any loan.

CHAPTER VI Incentives

SECTION 14. Reserve Requirement Differential . — Reserve

requirement imposed on thrift banks by the Monetary

Board shall enjoy equitable preferential terms over those

imposed

on

commercial

banks:

Provided ,

That

the

Monetary Board may change reserve differentials for the

purpose

of

stimulating

economic

growth

in

the

countryside,

thereby

promoting

national

economic

development.

SECTION 15. Liberalized Branching Rules . — Thrift banks

shall have unrestricted branching right within the region,

free from any assessment or surcharges required in

setting up a branch, but under coordination with the

Bangko Sentral which will have to assess that there are

qualified personnel, control and procedures to operate

the branch.

SECTION 16. Notices of Statement of Condition . — Subject

to Monetary Board approval, a thrift bank may publish its

statement

of

condition

in

a

newspaper

of

general

circulation, or post it in the most conspicuous area of its

premises, municipal building, municipal public market,

barangay hall and barangay public market if there be any,

where the thrift bank concerned is located.

CHAPTER VII Exemptions

SECTION 17. Tax Exemptions . — All thrift banks, whether

created or organized under this Act or in operation as of

the date of effectivity of this Act, shall be exempt from

payment of all taxes, fees and charges of whatever nature

and description, except the corporate income taxes and

local taxes, fees and charges for a period of five (5) years,

counted from the date of commencement of operations

for thrift banks created under this Act and from the date

of the effectivity of this Act for existing thrift banks.

SECTION 18. Exemption from Publication Requirement .

— The foreclosure of mortgage covering loans granted by

thrift

banks

and

executions

of

judgments

thereon

involving real properties and levied upon by a sheriff shall

be exempt from publication requirements where the

total amount of the loan, excluding interest due and

unpaid, does not exceed One hundred thousand pesos

(P100,000) or such amount as the Monetary Board may

prescribe,

as

may

be

warranted

by

the

prevailing

economic conditions and by the nature of service of

customers served by each category of the thrift bank. It

shall be sufficient publication in such cases if the notice

of foreclosure and execution of judgment are posted in

the

conspicuous

area

of

a

thrift

bank's

premises,

municipal building, the municipal public market, the

barangay hall, and the barangay public market, if there

be any, where the land mortgaged is situated within a

period of sixty (60) days immediately preceding the

public auction of the execution of judgment. Proof of

publication as required herein shall be accomplished by

an affidavit of the sheriff or officer conducting the

foreclosure sale or execution of judgment and shall be

attached with the records of the case.

A

thrift

bank

shall

be

allowed

to

foreclose

lands

mortgaged to it: Provided , That said lands shall be

covered under Republic Act No. 6657 .

SECTION 19. Exemption from Notarial Charges . — Any

metropolitan, municipal, or municipal circuit trial court

© Compiled by RGL

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