Banking Laws Flashcards
Rules on SBL.
1) The total amount of loans, credit accommodations and guarantees extended by a bank to any person, partnership, association, corporation or other entity shall at no time exceed twenty-five percent (25%) of the net worth of such bank
2) The total amount of loans, credit accommodations and guarantees prescribed in (1) may be increased by an additional ten percent (10%) of the net worth of such bank provided the additional liabilities of any borrower are adequately secured by trust receipts, shipping documentsm warehouse receipts or other similar documents transferring or securing title covering readily marketable, non-perishable goods which must be fully covered by insurance.
What is Joint and Solidary Signature Practice?
This requires as an additional security for a loan granted to a corporation, the joint and solidary signature of a major stockholder or corporate officer of the borrowing corporation.
Requisites of DOSRI accounts.
1) The borrower is a director, officer, or any stockholder of a bank and related interest;
2) He contracts a loan or any form of financial accommodation;
3) The loan or financial accommodation is from:
a) his bank; or
b) a bank that is a subsidiary of a bank holding company of which both his bank and the lending bank are subsidiaries or in which a controlling option of the shares is owned by the same interest that owns a controlling portion of the shares of his bank.
4) The loan or financial accommodation of the DOS, singly or with that of his related interest, is in excess of 5% of the capital and surplus of the lending bank or in the maximum amount permitted by law, whichever is lower.
Who are covered under the rule on DOSRI accounts?
1) Directors of the lending bank;
2) Officers
3) Stockholders - those whose stockholdings, individually and/or together with any of the following persons, amount to two percent (2%) or more of the total subscribed capital stock of the bank:
a) His spouse or relative within the first degree of affinity/consanguinity or relative by legal adoption, partnership wherein any of the foregoing is a general partner; and
b) A co-owner, with the stockholder or the stockholder’s spouse, or relative mentioned above, of property/right/interest mortgaged, pledged or assigned to secure the loan or credit accommodations, except when the mortgage,pledge or assignment covers only said co-owner’s undivided interest
4) Related Interest
What is the procedural requirement in DOSRI accounts?
No director or officer of any bank shall, directly or indirectly, borrow from such bank nor shall be guarantor, endorser or surety for loans from such bank to others, or in any manner be an obligor or incur any contractual liability to the bank, EXCEPT with the written approval of the majority of all the directors of the bank, excluding the director concerned. The written approval shall not be required for loans, other credit accommodations and advances granted to officers under a fringe benefit plan approved by the Bangko Sentral.
What are the powers of a conservator?
1) To take charge of the assets, liabilities, and the management thereof
2) To reorganize the management;
3) To exercise all powers necessary to restore its viability, with the power to overrule or revoke the actions of the previous management and board of directors of the bank or quasi-bank; and
4) Collect all monies and debts due to the said bank
Enumerate the Non-Risk Loans (Exclusions from SBL).
1) Loans and other credit accommodations secured by obligations of the Bangko Sentral or the Philippine Government;
2) Loans and other credit accommodations covered by assignment of deposits maintained in the lending bank and held in the Philippines;
3) Loans, credit accommodations and acceptance under Letters of Credit to the extent covered by margin deposits;
4) Other loan or credit accommodations which the MB may specify as non-risk items
