Section 5Sec./Art. 5

Section 7 of the same Act is hereby amended to read as follows:

"Section 7 (a). Whenever upon examination by the Corporation condition of any insured bank, it shall be disclosed that an insured bank or its directors or agents have committed, are committing or about to commit unsafe or unsound practices in conducting the business of the bank, or have violated, are violating or about to violate any provisions of any law or regulation to which the insured bank is subject, the Board of Directors shall submit the report of the examination to the monetary board to secure corrective action thereon. If no such corrective action is taken by the Monetary Board within sixty (60) days from the submission of the report, the Board of Directors shall,motu propio,institute corrective action which it deems necessary.

The Board of Directors may issue a cease and desist order and require the bank or its directors or agents concerned to correct the practices or violations within sixty (60) days. However, If the practice or violation is likely to cause insolvency or substantial dissipation of assets or earnings of the bank, or is likely to seriously weaken the interests of its depositors and the Corporation, the period to take corrective action shall not be more than fifteen (15) days. The order may also include the imposition of fines provided in Section 16 (f) hereof. The Board of Directors shall duly inform the Monetary Board of the Central Bank of the Philippines of action it has taken with respect to such pratices or violations.

If the bank violates the cease and desist order or fails to correct the practices or violations as required within the period prescribed herein, the corporation shall terminate the insured status of the bank on the Corporation, the bank and the depositors and their deposits shall be governed by Section 6 (h) hereof.

"(b) The actions and proceedings provided in the preceding subsection may be undertaken by the Corporation if, in its opinion, an insured bank or its directors or agents have violated, are violating or about to violate any provision of this Act or any order, rule or instruction issued by the Corporation or any written condition imposed by the Corporation in connection with any transaction with or grant by the Corporation."