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General banking fcda

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GENERAL BANKING LAW (RA 8791)
ORGANIZATION OF A BANK
Is a stock corporation
Funds are obtained from public
(at least 20 persons)
Minimum capital req’ts are met
STOCKHOLDINGS IN A BANK
- Individuals and corporations may own or
control up to 40% of bank’s stockholdings
TYPES OF BANKS
1) Commercial bank general
2) Universal bank general + powers of investment
house; expanded commercial bank
3) Thrift bank savings/mortgage/stock savings; under
Thrift Bank Act
4) Rural bank normal credit needs of farmers,
cooperatives; under Rural Bank Act
5) Cooperative Bank under Cooperative Act
6) Islamic Bank under Shariah Law
7) Government-owned bank for public purpose
BANKS
QUASI-BANKS
Function
Lend funds
Borrow funds
Sources
of funds
BANK
DEPOSITS
DEPOSIT
SUBSITUTES
BOARD OF DIRECTORS
o 5-15 members with 2 of them: independent
director (other than bank official/employee)
o Monetary board may disqualify, suspend or
remove any director (fit and proper rule)
LOANS MADE BY BANK
- shall not apply to a cooperative bank to its
cooperative shareholders
1) Risk-based capital
- Minimum ratio: net worth of a bank must bear to
its total risk assets
- 10% but 8% recommended internationally
2) Single Borrower’s Limit (SBL)
- Maximum limit to a single borrower
o Per law: 20% of net worth
o Per circular: ≤ 25% of net worth
- Additional limit (if adequately secured)
o 10% of bank’s net worth
RESTRICTIONS ON BANK EXPOSURE TO DOSRI
G.R: No bank D/O shall borrow from such bank nor shall
become a guarantor/indorser/surety for loans
Exception: Written approval of majority of BOD
excluding D concerned
LOAN LIMIT TO DOSRI: limited to unencumbered
deposits and BV of Paid-In bank contribution

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GENERAL BANKING LAW (RA 8791) ORGANIZATION OF A BANK ✓ Is a stock corporation ✓ Funds are obtained from public (at least 20 persons) ✓ Minimum capital req’ts are met STOCKHOLDINGS IN A BANK ✓ - Individuals and corporations may own or control up to 40% of bank’s stockholdings TYPES OF BANKS 1) Commercial bank – general 2) Universal bank – general + powers of investment house; expanded commercial bank 3) Thrift bank – savings/mortgage/stock savings; under Thrift Bank Act 4) Rural bank – normal credit needs of farmers, cooperatives; under Rural Bank Act 5) Cooperative Bank – ...
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