Banking Flashcards
(97 cards)
1
Q
If three elements are present it is a bank or engaged in banking therefore it has to obtain a license from
A
BSP and SEC
2
Q
caters to small and medium business enterprises.
A
Private development bank
4
Q
Limitation to stocks held by natural (filipino) person?
A
40% share
5
Q
What does the “thrift bank” include? (3)
A
- Savings and Mortgage Banks (monte de piedad)
- Saving and Loans Associations
- Private Development Bank
6
Q
MINIMUM CAPITAL REQUIREMENT of Commercial Bank
A
2.4 Billion Pesos
8
Q
MINIMUM CAPITAL REQUIREMENT of a Thrift Bank within Metro Manila
A
325 Million Pesos
10
Q
POWERS OF THE BANK (5)
A
- Bank extends credit
- Bank receives deposit
- You want to buy/sell foreign exchange
- Issues letters of credits
- Accept drafts
12
Q
Fact
A
Filipino individuals, 40%. For a group of persons, no more limitation. A bank can be owned by a family or a group of persons. As long as not one of them owns more than 40% of the bank.
13
Q
SERVICES THAT A BANK MAY RENDER (5)
A
- It can make collection and payment for the account of its customers
- A bank is authorized to buy and sell securities in behalf of customers
- Bank can act as your investment manager - entrust your excessive money to get more income than rate for savings or time deposits
- Receive money for safekeeping and other valuable objects
- Rent out safety deposit box
14
Q
MINIMUM CAPITAL REQUIREMENT of a Thrift Bank the head office of which is outside Metro Manila
A
52.5 Million Pesos
15
Q
Who may be a stockholder of a bank corporation?
A
natural and juridical person
16
Q
Fact
A
The difference between Filipino and foreign-owned corporation is that Filipinos (40% share is individual) for foreigners (the 40% limit is aggregate). Foreign held stocks, whether owned by natural persons or corporations owned by foreigners, collectively, shall not exceed 40% of the bank, it is because a bank is a nationalized activity. Making sure that Filipinos control the bank.
17
Q
Law that covers Philippine currency bank deposits and investment in government securities
A
RA 1405
18
Q
Fact
A
The common denominator to all these laws is any information about deposits, whether Philippine currency or foreign currency or funds or properties in the bank’s possession, is confidential. Bank cannot disclose to a third person that you have a deposit or that you have a trust fund in the bank. Otherwise, it will violate your right and it will give rise to a criminal offense.
19
Q
Limitation to stocks held by natural (foreigner) person?
A
40% aggregate
20
Q
Exceptions/cases where the account is disclosed without violating 1405: (3)
A
- If there is written permission/consent
- In case of impeachment
- In case there is a court order
22
Q
How does BSP exercise supervision over banks? (3)
A
- Issuance of rules and regulations
- Examination of obligation
- Imposition of sanctions
23
Q
Three laws concerning secrecy of information of bank funds received in the ordinary course of business:
A
- RA 1405
- RA 6426
- RA 8791
24
Q
Law regarding foreign currency bank deposits (dollars, euros etc..) Foreign currency deposit law
A
RA 6426
25
Q
GENERAL BANKING LAW
A
REPUBLIC ACT 8791
26
Q
GBL prohibits disclosure of any information about:
A
funds other than deposits as well as properties in the bank’s possession belonging to a private entity
27
Q
Agencies that exercise supervision over the banks: (2)
A
BSP and SEC
28
Q
is appointed when the bank is insolvent (assets are less than liabilities).
A
Recevier
29
Q
It is a contract or receipt for goods deposited with a warehouseman containing containing the latter’s undertaking to hold and deliver the said goods to a specified person, to his order, or to bearer. Same with quedan.
A
Warehouse Receipt
30
What are the objectives of the BSP? (4)
1. To provide policy direction in the areas of money, banking and credit – currency issued by the BSP represents a conditional obligation of the government (legal tender). There must be assets (before it was gold) to back-up the currency notes.
2. Promote peso stability
3. Promote price stability
4. Exercise supervision over banks and and quasi-banks
31
Elements of banking: (4)
1. Entity engaged in the lending of funds.
2. Funds obtained from the public.
3. Such funds are in the form of deposits.
4. Corporations authorized by the BSP.
32
Kinds of Banks (7)
1. Universal
2. Commercial
3. Thrift
4. Rural Bank
5. Islamic
6. Cooperative, and
7. Other banks that may be classified by the BSP
34
Remedies available to the BSP in case a bank violates any banking law, rules and regulations: (4)
1. BSP may impose a fine and other administrative functions—like disqualifications, suspension of erring directors and bank officers.
2. BSP can also SUSPEND the quasi-banking privilege or the foreign exchange operation, the discounting facility, and clearing facility by the bank.
3. To appoint a conservator or a receiver.
4. To order the closure of a bank in cases allowed by law.
35
3 Common forms of documents of title
1. Bill of lading
2. Dock warrant
3. Warehouse receipt
36
A person, natural or juridical, lawfully engaged in the business of storage of goods for profit.
Warehouseman
37
Fact about warehouse receipt
Depositor may demand the delivery of the goods based on the terms of the WR or can assign or negotiate or transfer it in favor of somebody else. The transferee or assignee, depending if he’s a holder for value or not, may demand delivery of the goods from the warehouseman.
38
Is a warehouse receipt a negotiable instrument or not?
NO it doesn’t comply with the requirements of negotiability (section 1, NIL)
39
Three parties to bill of lading
the carrier, the shipper, and the consignee.
40
is appointed when the bank is illiquid—its assets are not in cash or cannot be converted to cash right away.
Conservator
42
What is the obligation of a warehouseman?
To deliver goods and not money
43
WR as a document of title
it can be a negotiable or non-negotiable document of title. WR is a document of title. That instrument represents title over the goods covered by that instrument. It can be a negotiable or non-negotiable document.
44
Conditions before the warehouseman can be compelled to deliver: (3)
1. the lien/storage charges must be paid. – they are the lien to the property. Unless satisfied, warehouseman can withhold delivery.
2. The receipt must be surrendered to the warehouseman. – if not surrendered, it may have been negotiated to somebody else. The law makes it a crime for a warehouseman to deliver the goods without requiring surrender.
3. The claimant or depositor must acknowledge receipt of the goods.
45
Two basic parties to a warehouse receipt:
1. Warehouseman
2. Depositor or his assignee or any person who acquires the instrument from him [either the transferee or the holder for value]
46
the promise of the insurer is to make good only the loss of the insured. No person may secure insurance upon property in which he has no interest.
Contract of indemnity
48
one who acknowledges the receipt of the goods and one who has the obligation to safekeep the goods pending delivery to the person lawfully entitled to possession
Warehouseman
49
Fact
The law says that the warehouseman is supposed to deliver to the person lawfully entitled to possession and not necessarily to the depositor.
50
conditions set forth in section 8, paragraph (a) of the WRL.
a. Failure to satisfy the warehouseman’s lien –The lien consists of storage charges.
b. Failure to surrender the negotiable WR – it is even an offense for the WM to deliver the goods without requiring the surrender of the WR as a condition or the delivery. It is a must.
c. Non-willingness to acknowledge receipt of the goods
51
Kinds of checks(5)
1. Cashier's
2. Certified
3. Crossed
4. Memorandum
5. Traveller's
52
Law that governs the issuance of a bouncing check
Batas Pambansa Bilang 22
53
MINIMUM CAPITAL REQUIREMENT of Universal Bank
4.950 Billion Pesos
54
It is both an acknowledgment receipt and a bilateral contract between the warehouseman and the depositor.
Warehouse Receipt
55
Three essential elements of violation of BP 22:
1. The check must be issued for valuable consideration
2. When at the time the drawer issued the check, he had knowledge that he had no sufficient funds. - motive
3. At the time the check was presented for payment, the same was dishonored for insufficiency of funds or account loss.
56
Facts about check
Payee has the duty to inform the drawer that the check he issued has been dishonored and then he is given 5 days to make good the check. Written notice of dishonor raises the presumption that at the time the drawer issued the check, he had knowledge that he had no sufficient funds.
If the drawer pays the check within the 5-day banking period, that will already exonerate him.
NIL: a check must be presented within the 180-day period. If not, it becomes stale.
57
An account can be disclosed through a court order on any of the following cases: (7)
a. Where the subject matter of litigation is the money deposited
b. In case of bribery or dereliction of duty
c. Prosecution for unexplained wealth
d. Prosecution for violation of Graft and Corrupt Practices Act
e. In case of violation of the anti-money laundering law
f. In case of violation of the human security act
g. In case of garnishment
58
an agreement whereby one undertakes for a consideration to indemnify another against loss, damage, or liability arising from an unknown or contingent event.
Contract of Insurance
59
Requisites of a contract of insurance (5)
1. A subject matter in which the insured has an insurable interest.
2. Peril insured against which may be any contingent or unknown event, past or future, and a duration for the risk thereof.
3. A promise to pay or indemnify in a fixed or ascertainable amount.
4. A consideration for the promise.
5. A meeting of minds of the parties upon all the foregoing essentials.
60
a bill of exchange drawn on a bank payable on demand.
check
61
Nature and characteristics of insurance contract (7)
1. Consensual
2. Voluntary
3. Aleatory
4. Unilateral Contract
5. Conditional
6. Contract to indemnify
7. Personal Contract
62
In what cases will the warehouseman not be compelled to make delivery of the goods? Justified in withholding the delivery of the goods? (6)
1. Non-fulfillment with the conditions set forth in section 8, paragraph (a) of the WRL.
2. WM by himself or to a third person acquires information that the depositor is not the owner of the goods.
3. In case of conflicting claims on the same goods in the possession of the WM
4. If the goods are lost
5. If the goods are hazardous or perilous in nature
6. If the receipt is negotiated back to the warehouseman – W issues a WR to B, B negotiates to X, X negotiates to T, Y negotiates back to W.
63
perfected by the meeting of the minds of the parties.
consensual
64
it is a contract or receipt for the transfer of goods and their delivery to the person named therein, to his order or bearer. It involves the carrier, the shipper, and the consignee.
Bill of lading
65
parties may incorporate such terms and conditions as they may deem convenient which will be binding
Voluntary
66
each party having in view the character, credit, and conduct of the other.
personal contract
67
Distinguishing elements of the contract of insurance (5)
1. The insured possesses an interest of some kind susceptible of pecuniary or monetary estimation (insurable interest).
2. The insured is subject to a risk of loss through the destruction or impairment of that interest by the happening of designated perils.
3. The insurer assumes that risk of loss.
4. Such assumption is part of a general scheme to distribute actual losses among a large group of persons bearing somewhat similar risks.
5. As consideration for the insurer’s promise, the insured makes a ratable contribution called premium, to a general insurance fund.
68
Classifications of contracts of insurance (3)
1. Life insurance contract
2. non life i.c
3. contract of suretyship and bonding
69
The bank on which a check is drawn
payor bank
70
depends upon some contingent event.
Aleatory
71
Life insurance Contracts (3)
1. individual life
2. group life
3. industrial life
72
What are the offenses for which the WM would be held liable? (6)
1. Failure to exercise due diligence a in the preservation and safekeeping of the goods in his possession.
2. Failure to indicate the word “non-negotiable” if it is a non-negotiable WR.
3. Failure to notify the depositor in case of sale of the goods for being hazardous or perilous in nature.
4. Issuance of a receipt not backed up with delivery of the goods
5. Issuance of a receipt containing false statement – you make 100 sacks of palay to 1000
6. Failure to require the surrender of the WR if it’s negotiable.
73
refer to goods and not to money
Documents of title
74
non-life (3)
1. marine
2. fire
3. casualty
75
Concept of Insurance (3)
1. Thing insured – fire insurance, marine insurance, life/health/accident insurance, casualty/liability insurance.
2. Consideration for the contract – premium – amount is based on the extent of the liability which the insurer may incur under the contract.
3. Object or purpose – transfer and distribution of risk of loss, damage, or liability
76
grounds or reasons pleaded or offered by the defendant in a case, showing why the plaintiff, as a matter of law or fact, should not be given the relief he seeks.
Defenses
77
assertable against all parties, both immediate and remote, including holders in due course or holders through the latter.
Real defense
78
those available to prior parties among themselves but which are not good against a holder in due course. They include every defense available in actions under ordinary contract law. They are available only against that person or subsequent holder who stands in privity with the party seeking to enforce it. They can only be used between original parties or immediate parties or against one who is not a holder in due course.
personal defense
79
the name of a particular bank or company is written or appears between the parallel lines in which case the drawee bank must pay the check only upon presentment by such bank or company.
crossed specially
80
Any bank except the payor bank that handles a check during some phase of the collection process is
collecting bank
81
are available only against the holder who stands in privity with the party who is entitled to set up or those who are not or do not have the rights of a holder in due course. Affects only the validity of the agreement for which the instrument was issued. It is the underlying agreement that is in question.
personal or equitable defense
82
it is only one bill that is composed of several parts, each part being numbered and containing a reference to the other parts.
Bills in set
83
The first bank to receive a check for payment
depositary bank
84
subject to conditions the principal one of which is the happening of the event insured against.
conditional
85
it is one which has not been presented for payment within a reasonable time after its issue. It is valueless and, therefore, should not be paid. Banking practice presently regards as stale a check outstanding for more than 6 months. Banks will normally not pay such a check without consulting the depositor (drawer).
stale check
86
How may a negotiable instrument be discharged? (5)
1. By payment in due course by or in behalf of the principal debtor;
2. By payment in due course by the party accommodated, where the instrument is made or accepted for his accommodation;
3. By the intentional cancellation thereof by the holder;
4. By any other act which will discharge a simple contract for the payment of money;
5. When the principal debtor becomes the holder of the instrument at or after maturity in his own right.
89
a bill of exchange drawn by a bank upon itself, and is accepted by its issuance. Payable on demand to a payee. It is really the bank’s own check and may be treated as a promissory note with the bank as maker. It operates as an assignment of funds represented by the check to the credit of the payee or holder. A manager’s check is of the same nature, although instead of being signed by the cashier, it is the manager who signs the same for the bank. Deemed as cash.
Cashiers check
90
Purpose of certifying a check as regards the parties
to enable the holder to use it as money
91
Purpose of certifying a check (3)
a. certification is equivalent to acceptance.
b. where the holder of a check procures it to be accepted or certified, the drawer and all indorsers are discharged from liability thereon.
c. A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check.
92
Where checks are received by a bank merely for collection and deposit,
agency
93
purpose/effects of crossing a check (3)
a. the check may not be encashed but only deposited in the bank;
b. the check may be negotiated only once – to one who has an account with the bank; and
c. the act of crossing serves as a warning to the holder that the check has been issued for a definite purpose so that he must inquire if he has received the check pursuant to that purpose.
94
done by writing 2 parallel lines diagonally on the left top portion of the checks. It is one which bears across its face two parallel lines drawn diagonally, usually on the upper left side
crossed check
96
is any bank except the payor bank and the depositary bank, to which a check is transferred in the course of the collection process.
intermediate bank
97
payment made at or after the maturity of the instrument, to the holder thereof in good faith and without notice that his title is defective.
payment in due course
98
only the words “and Co.”or for payee’s account only” are written between the parallel lines or when nothing is written at all between said lines. In such case, the drawee bank must pay the check through the intervention of some bank or banker.
Crossed generally
99
in the form of an ordinary check, with the word “memorandum,” “memo” or “mem” written across its face, signifying that the maker or drawer engages to pay the bona fide holder absolutely, without any condition concerning its presentment. Such a check is an evidence of debt against the drawer, and although it may not be intended to be presented, has the same effect as an ordinary check, and if passed to a third person, will be valid in his hands like any other check.
memorandum check
100
It is one upon which the holder’s signature must appear twice, one to be affixed by him at the time it is issued and the second or counter-signature, to be affixed by him in the presence of the payee before it is paid, otherwise, it is incomplete.
Travellers check
101
Purpose of traveler's check
to provide the traveler safe and convenient method by which to supply himself with funds in almost all parts of the civilized world without the hazard of carrying the money on his person. The drawee (eg, American Express) is ordinarily not a bank.
102
Purpose of crossing a check:
to insure payment to the payee particularly when it’s forwarded by mail or when it’s entrusted to an agent.
103
imposing only on the insurer who promises to indemnify in case of loss.
unilateral contract
104
(general banking law) - funds other than deposits as well as properties in the bank’s possession belonging to a private entity.
RA 8791
106
one drawn by a depositor upon funds to his credit in a bank which a proper officer of the bank certifies will be paid when duly presented for payment. It is one which bears upon its face an agreement by the drawee bank that the check will be paid on presentation. The usual practice is by stamping or writing the word “certified” upon the check.
certified check
116
Cases where BP 22 is applicable:
1. Bouncing check – when it is presented for payment, on its due date, it is dishonored for insufficiency of funds. The mere issuance of a bouncing check is punishable. There are as many violations of BP 22 as there are number of checks involved (malum prohibitum).
2. Account closed/loss – maintain a certain amount to prevent this.
118
An entity engaged in the lending of funds obtained from the public in the form of deposits.
Bank
121
attach to the instrument and are available against all holders, whether in due course or not, but only by the party or parties entitled to raise them. Questions the legal validity of the instrument itself.
real or absolute defense
