Article 152p. 152

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

CHAPTER VI Cessation of Banking Business

SECTION 68. Voluntary Liquidation . — In case of the

voluntary liquidation of any bank organized under the

laws of the Philippines, or of any branch or office in the

Philippines of a foreign bank, written notice of such

liquidation shall be sent to the Monetary Board before

such liquidation is undertaken, and the Monetary Board

shall have the right to intervene and take such steps as

may be necessary to protect the interests of creditors. (86)

SECTION 69. Receivership and Involuntary Liquidation .

— The grounds and procedures for placing a bank under

receivership or liquidation, as well as the powers and

duties of the receiver or liquidator appointed for the bank

shall be governed by the provisions of Sections 30, 31, 32,

and 33 of the New Central Bank Act : Provided , That the

petitioner or plaintiff files with the clerk or judge of the

court in which the action is pending a bond, executed in

favor of the Bangko Sentral, in an amount to be fixed by

the court. This Section shall also apply to the extent

possible to the receivership and liquidation proceedings

of quasi-banks. (n)

SECTION 70. Penalty for Transactions After a Bank

Becomes Insolvent . — Any director or officer of any bank

declared insolvent or placed under receivership by the

Monetary Board who refuses to turn over the bank's

records and assets to the designated receivers, or who

tampers with banks records, or who appropriates for

himself

or

another party or destroys or causes the

misappropriation and destruction of the bank's assets, or

who receives or permits or causes to be received in said

bank any deposit, collection of loans and/or receivables, or

who pays out or permits or causes to be paid out any

funds of said bank, or who transfers or permits or causes

to be transferred any securities or property of said bank

shall be subject to the penal provisions of the New

Central Bank Act . (85a)

CHAPTER VII Laws Governing Other Types of

Banks

SECTION 71. Other Banking Laws . — The organization,

ownership and capital requirements, powers, supervision

and general conduct of business of thrift banks, rural

banks and cooperative banks shall be governed by the

provisions of the Thrift Banks Act, the Rural Banks Act ,

and the Cooperative Code , respectively.

The organization, ownership and capital requirements,

powers, supervision and general conduct of business of

Islamic banks shall be governed by special laws.

The provisions of this Act, however, insofar as they are not

in conflict with the provisions of the Thrift Banks Act, the

Rural Banks Act , and the Cooperative Code shall likewise

apply to thrift banks, rural banks, and cooperative banks,

respectively. However, for purposes of prescribing the

minimum ratio which the net worth of a thrift bank must

bear to its total risk assets, the provisions of Section 33 of

this Act shall govern. (n)

CHAPTER VIII Foreign Banks

SECTION 72. Transacting Business in the Philippines . —

The entry of foreign banks in the Philippines through the

establishment of branches shall be governed by the

provisions of the Foreign Banks Liberalization Act.

The

conduct

of

offshore

banking

business

in

the

Philippines shall be governed by the provisions of the

Presidential Decree No. 1034 , otherwise known as the

"Offshore Banking System Decree." (14a)

SECTION 73. Acquisition of Voting Stock in a Domestic

Bank . — Within seven (7) years from the effectivity of this

Act and subject to guidelines issued pursuant to the

Foreign Banks Liberalization Act, the Monetary Board

may authorize a foreign bank to acquire up to one

hundred percent (100%) of the voting stock of only one (1)

bank organized under the laws of the Republic of the

Philippines.

Within

the

same

period,

the

Monetary

Board

may

authorize any foreign bank, which prior to the effectivity

of this Act availed itself of the privilege to acquire up to

sixty percent (60%) of the voting stock of a bank under

the Foreign Banks Liberalization Act and the Thrift Banks

Act, to further acquire voting shares of such bank to the

extent necessary for it to own one hundred percent

(100%) of the voting stock thereof.

In the exercise of this authority, the Monetary Board shall

adopt measures as may be necessary to ensure that at all

times

the

control

of

seventy

percent

(70%)

of

the

resources or assets of the entire banking system is held

by banks which are at least majority-owned by Filipinos.

Any right, privilege or incentive granted to a foreign bank

under this Section shall be equally enjoyed by and

extended under the same conditions to banks organized

under the laws of the Republic of the Philippines. (Secs. 2

and 3, RA 7721 )

SECTION 74. Local Branches of Foreign Banks . — In the

case of a foreign bank which has more than one (1)

branch in the Philippines, all such branches shall be

treated as one (1) unit for the purpose of this Act, and all

references to the Philippine branches of foreign banks

shall be held to refer to such units. (68)

SECTION 75. Head Office Guarantee . — In order to

provide

effective

protection

of

the

interests

of

the

depositors and other creditors of Philippine branches of a

foreign bank, the head office of such branches shall fully

guarantee the prompt payment of all liabilities of its

Philippine branch. (69)

Residents

and

citizens

of

the

Philippines

who

are

creditors of a branch in the Philippines of a foreign bank

shall have preferential rights to the assets of such branch

in accordance with existing laws. (19)

SECTION 76. Summons and Legal Process . — Summons

and legal process served upon the Philippine agent or

head of any foreign bank designated to accept service

thereof shall give jurisdiction to the courts over such

bank, and service of notices on such agent or head shall

be as binding upon the bank which he represents as if

made upon the bank itself.

Should the authority of such agent or head to accept

service of summons and legal processes for the bank or

notice to it be revoked, or should such agent or head

become mentally incompetent or otherwise unable to

accept service while exercising such authority, it shall be

the duty of the bank to name and designate promptly

another agent or head upon whom service of summons

and processes in legal proceedings against the bank and

of notices affecting the bank may be made, and to file

with the Securities and Exchange Commission a duly

authenticated nomination of such agent.

In the absence of the agent or head or should there be no

person authorized by the bank upon whom service of

summons, processes and all legal notices may be made,

service of summons, processes and legal notices may be

made

upon

the

Bangko

Sentral

Deputy

Governor

In-Charge of the supervising and examining departments

and such service shall be as effective as if made upon the

bank or its duly authorized agent or head.

In case of service for the bank upon the Bangko Sentral

Deputy

Governor

In-Charge

of

the

supervising

and

examining departments, the said Deputy Governor shall

register and transmit by mail to the president or the

secretary of the bank at its head or principal office a copy,

duly certified by him, of the summons, process, or notice.

The sending of such copy of the summons, process, or

notice shall be a necessary part of the services and shall

complete the service. The registry receipt of mailing shall

be prima facie evidence of the transmission of the

summons, process or notice. All costs necessarily incurred

by the said Deputy Governor for the making and mailing

and sending of a copy of the summons, process, or notice

© Compiled by RGL

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