Article 150p. 150

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

hold

or

convey

real

property

under

the

following

circumstances:

52.1. Such as shall be mortgaged to it in good faith by way

of security for debts;

52.2. Such as shall be conveyed to it in satisfaction of

debts previously contracted in the course of its dealings;

or

52.3. Such as it shall purchase at sales under judgments,

decrees, mortgages, or trust deeds held by it and such as

it shall purchase to secure debts due it.

Any

real

property

acquired

or

held

under

the

circumstances enumerated in the above paragraph shall

be disposed of by the bank within a period of five (5) years

or as may be prescribed by the Monetary Board: Provided ,

however , That the bank may, after said period, continue to

hold

the

property

for

its

own

use,

subject

to

the

limitations of the preceding Section. (25a)

SECTION 53. Other Banking Services . — In addition to

the operations specifically authorized in this Act, a bank

may perform the following services:

53.1. Receive in custody funds, documents and valuable

objects;

53.2. Act as financial agent and buy and sell, by order of

and for the account of their customers, shares, evidences

of indebtedness and all types of securities;

53.3. Make collections and payments for the account of

others

and

perform

such

other

services

for

their

customers

as

are

not

incompatible

with

banking

business;

53.4. Upon prior approval of the Monetary Board, act as

managing agent, adviser, consultant or administrator of

investment management/advisory/consultancy accounts;

and

53.5. Rent out safety deposit boxes.

The bank shall perform the services permitted under

Subsections 53.1, 53.2, 53.3 and 53.4 as depositary or as an

agent. Accordingly, it shall keep the funds, securities and

other effects which it receives duly separate from the

bank's own assets and liabilities.

The

Monetary

Board

may

regulate

the

operations

authorized by this Section in order to ensure that such

operations

do

not

endanger

the

interests

of

the

depositors and other creditors of the bank.

In case a bank or quasi-bank notifies the Bangko Sentral

or publicly announces a bank holiday, or in any manner

suspends

the

payment

of

its

deposit

liabilities

continuously for more than thirty (30) days, the Monetary

Board may summarily and without need for prior hearing

close

such

banking

institution

and

place

it

under

receivership

of

the

Philippine

Deposit

Insurance

Corporation. (72a)

SECTION 54. Prohibition to Act as Insurer . — A bank

shall not directly engage in insurance business as the

insurer. (73)

SECTION 55. Prohibited Transactions . —

55.1. No director, officer, employee, or agent of any bank

shall — (a) Make false entries in any bank report or

statement or participate in any fraudulent transaction,

thereby affecting the financial interest of, or causing

damage to, the bank or any person;

(b) Without order of a court of competent jurisdiction,

disclose to any unauthorized person any information

relative to the funds or properties in the custody of the

bank belonging to private individuals, corporations, or any

other entity: Provided , That with respect to bank deposits,

the provisions of existing laws shall prevail;

(c) Accept gifts, fees or commissions or any other form of

remuneration in connection with the approval of a loan or

other credit accommodation from said bank;

(d) Overvalue or aid in overvaluing any security for the

purpose of influencing in any way the actions of the bank

or any bank; or

(e) Outsource inherent banking functions.

55.2. No borrower of a bank shall — (a) Fraudulently

overvalue property offered as security for a loan or other

credit accommodation from the bank;

(b)

Furnish

false

or

make

misrepresentation

or

suppression of material facts for the purpose of obtaining,

renewing,

or

increasing

a

loan

or

other

credit

accommodation or extending the period thereof;

(c) Attempt to defraud the said bank in the event of a

court

action

to

recover

a

loan

or

other

credit

accommodation; or

(d) Offer any director, officer, employee or agent of a bank

any

gift,

fee,

commission,

or

any

other

form

of

compensation in order to influence such persons into

approving

a

loan

or

other

credit

accommodation

application.

55.3. No examiner, officer or employee of the Bangko

Sentral or of any department, bureau, office, branch or

agency of the Government that is assigned to supervise,

examine, assist or render technical assistance to any bank

shall commit any of the acts enumerated in this Section

or aid in the commission of the same. (87-Aa)

The making of false reports or misrepresentation or

suppression of material facts by personnel of the Bangko

Sentral ng Pilipinas shall constitute fraud and shall be

subject to the administrative and criminal sanctions

provided under the New Central Bank Act .

55.4. Consistent with the provisions of Republic Act No.

1405 , otherwise known as the Banks Secrecy Law, no

bank shall employ casual or nonregular personnel or too

lengthy probationary personnel in the conduct of its

business involving bank deposits.

SECTION 56. Conducting Business in an Unsafe or

Unsound Manner . — In determining whether a particular

act or omission, which is not otherwise prohibited by any

law, rule or regulation affecting banks, quasi-banks or

trust entities, may be deemed as conducting business in

an unsafe or unsound manner for purposes of this

Section, the Monetary Board shall consider any of the

following circumstances:

56.1. The act or omission has resulted or may result in

material loss or damage, or abnormal risk or danger to

the safety, stability, liquidity or solvency of the institution;

56.2. The act or omission has resulted or may result in

material

loss

or

damage

or

abnormal

risk

to

the

institution's depositors, creditors, investors, stockholders

or to the Bangko Sentral or to the public in general;

56.3. The act or omission has caused any undue injury, or

has

given

any

unwarranted

benefits,

advantage

or

preference to the bank or any party in the discharge by

the director or officer of his duties and responsibilities

through manifest partiality, evident bad faith or gross

inexcusable negligence; or

56.4. The act or omission involves entering into any

contract

or

transaction

manifestly

and

grossly

disadvantageous to the bank, quasi-bank or trust entity,

whether or not the director or officer profited or will

profit thereby.

Whenever a bank, quasi-bank or trust entity persists in

conducting its business in an unsafe or unsound manner,

the

Monetary

Board

may,

without prejudice to the

administrative sanctions provided in Section 37 of the

New Central Bank Act , take action under Section 30 of

the same Act and/or immediately exclude the erring bank

from clearing, the provisions of law to the contrary

notwithstanding. (n)

SECTION 57. Prohibition on Dividend Declaration . — No

bank or quasi-bank shall declare dividends greater than

its accumulated net profits then on hand, deducting

therefrom its losses and bad debts. Neither shall the bank

© Compiled by RGL

150 of 211