Banking Samplex

8/10/2019 Banking Samplex

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BANKING SAMPLEX SUGGESTED ANSWERS

1. CHAPTER 7 AND 5

Responsibility and Primary Objective of the Bangko Sentral (Chapter 7 Bangko Sentral p. 289)

Under the New Central Banking Act:

o Responsibility of Bangko Sentral is to provide policy directions in areas of money, banking and

credit.

o

It shall havesupervision over the operationsof banks

o It also exercises such regulatory powers over operations of finance companies and non- banking

financial institutions performing quasi banking functions, hereafter referred to as quasi banks, andinstitutions performing similar functions.

o The primary objective of the Bangko Sentral is to maintainprice stability conducive to a balanced

and sustainable growth of the economy.

o It shall alsopromote and maintain monetary stability and the convertibility of the peso.

Busuego v. CA 199

o BSP, through the Monetary Board, is the government agency charged with responsibility of

administering the monetary banking and credit system of the country and is granted the power of

supervision and examination over banks and non bank financial institutions performing quasi

banking functions of which savings and loan associations.

Close now, Hear later scheme (Chapter 5 Prohibited Transactions and Cessation of Banking Business p. 247) Law does not contemplate prior notice and hearing before a bank may be directed to stop operations and

placed under receivership. When the law provides for filing of a case within 10 days after receiver takes

charge of assets of the bank, it is unmistakable that assailed actions should precede filing of the case.

Legislature could not have intended to authorize no prior notice and hearing in closure of bank and at the

same time allow a suit to annul it on basis of absence there ofCentral Bank of Philippines v. CA 1993

Law does not require previous hearing of before the Monetary Board can implement its resolution closing a

bank since MBs actions is subject to judicial scrutiny as provided by law.

This scheme is grounded on practical and legal considerations to prevent unwarranted dissipation of banks

assets and as a valid exercise of police power to protect depositors, creditors, stockholders and general

public. Due process does not necessarily require prior hearing; a hearing or an opportunity to be heard

maybe subsequent to the closure. One can just imagine the dire consequences of a prior hearing; bank runs

would be the order of the day, resulting in panic and hysteria. In the process, fortunes may be wiped out

and disillusionment will run the gamut of the entire banking community Vide Rural Bank of Buhi v. CA1988

2. CHAPTER 5

Grounds for a bank to be placed under receivership - The Monetary Board shall institute proceedings for

receivership whenever it finds that a bank or quasi-bank:

Is unable to pay its liabilities as they become due in the ordinary course of business; provided that this shall

not include inability to pay caused by extraordinary demands induced by financial panic in the banking

community;

Has insufficient realizable assets to meet its liabilities; Cannot continue in business without involving probable loss to its depositors or creditors; or

Has willfully violated a cease and desist order that has become final, involving acts or transactions which

amount to fraud or a dissipation of the assets of the institution.

3.

What are the requisites for in-camera inspection of bank deposits?1. Theres a pending case in court

2. Account must be properly identified

3. Inspection must be limited to the subject matter

What is survivorship agreement?

Survivorship agreement joint owners of a deposit agree that either of them could withdraw any part or

whole of the account during the lifetime of both; and the balance upon the death of either belongs to the

survivor


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Explain survivorship agreement is not valid per se but it may be contrary to law

Survivorship agreement is not contrary to law but may be violative as it can be a mere cloak to hide

inofficious donations to transfer property in fraud

What is warehousing agreement?Warehousing agreement agreement whereby one entity holds in trust the real property of a bank, which

is in excess of the limitation on investments on real estate at 50% of the capital assets- Not valid

4. CHAPTER 8

If your friend has no other currency to pay for her indebtedness, would you accept the following:

a. 1-dollar coin with an age of 10 years

NO. Art 1249 of NCC states that all payments of debts shall be in currency stipulated and if not possible

currency in legal tender. DOLLAR IS NOT THE LEGAL TENDER IN THE PHILIPPINES.

b. P50 with 2/5 of the surface is lost YES. BSP shall not replace notes under mutilated condition and without compensation to bearer. Mutilated

condition: (1) identification is impossible, (2) signs of filing, clipping, (3) notes lost MORE THAN 2/5 of

surface or all signatures. ONLY 2/5 IS LOST.

c. P70 for denomination of 25c

YES. Maximum amount of coins to be considered as legal tender is P100.00 for denominations of 1-

sentimo, 5-sentimo, 10-sentimo, and 25-sentimo coins. P70 IS WELL WITHIN THE LIMIT.

d. P20 without the signature of the President

YES. BSP shall not replace notes under mutilated condition and without compensation to bearer. Mutilated

condition: (1) identification is impossible, (2) signs of filing, clipping, (3) notes lost more than 2/5 of

surface or ALL signature. ONLY SIGNATURE OF PRESIDENT IS MISSING.

e. P100 note which is 364 years old

NO. Retirement of old notes. BSP may call for replacement of notes (more than 5 yrs old). Notes shallremain legal tender for 1 year from date of call. After period, such shall cease to be legal tender but can be

exchanged at par and without charge in BSP during following year. After said period, notes and coins not

exchanged shall cease to be a liability of BSP and shall be demonetize. IF BSP HAS CALLED FOR

REPLACEMENT, NO.

f. P25 for denominations of 10c

YES. Maximum amount of coins to be considered as legal tender is P100.00 for denominations of 1-

sentimo, 5-sentimo, 10-sentimo, and 25-sentimo coins. P25 IS WELL WITHIN THE LIMIT.

5. CHAPTERS 1, 4 AND 5

Bank p. 2 Quasi Bank p. 37

Entities engaged in lending of

funds obtained in the form of

deposits. Sec. 3.2 GBL

Entities engaged in borrowing of funds, through the issuance , endorsement or

assignment with recourse to acceptance of deposit substitutes for purposes of

relending or purchasing of receivables and other obligations. Sec. 4 GBL

In this connection, deposit substitutes is an alternative form of obtaining funds

from the public, other than deposits, through the issuance, endorsement, or

acceptance of debt instruments for the borrowers own account, for the purpose

of relending or purchasing of receivables and other obligations. These

instruments may include but need not be limited to bankers acceptance,

promissory notes, participations, certificates of assignment and similar

instruments with recourse and repurchase agreementsSec. 94 NCBA

Commercial Bank p. 124 Savings/Mortgage Bank - I couldnt find it in the


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book/notes. So I used Blacks Law. Sorry!

General powers incident to corporations

All such powers as may be necessary to carry on the

business of commercial banking such as

o accepting drafts and issuing letters of credit

o Discounting and negotiating Promissory

Notes, drafts, Bills of Exchange, and otherevidences of debt

o Accepting or creating demand deposits

o Receiving other types of deposits and deposit

substitutes

o buying and selling foreign exchange and gold

or silver bullion acquiring marketable bonds

and other debt securities

o extending credit, subject to rules as the

monetary board may promulgate these rules may include

determination for bonds and other

debt securities eligible for

investment, the maturities andaggregate amount of such

investmentSec. 29

An institution in the nature of a bank, formed or

established for the purpose of receiving deposits

of money, for the benefit of the persons

depositing, to accumulate the produce of so muchthereof as shall not be required by the depositors,

their executors or administrators, at compoundinterest, and to return the whole or any part of

such deposit, and the produce thereof, to the

depositors, their executors or administrators,

deducting out of such produce so much as shall berequired for the necessary expenses attending the

management of such institution, but deriving no

benefit whatever from any such deposit or the

produce thereof.

Receiver p. 231 Conservator p. 225 Liquidator p. 230

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 theprovisions 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, executedin 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 ofquasi-banks.- Sec. 69 GBL

The grounds and procedures for

placing a bank under

conservatorship, as well as, the

powers and duties of the

conservator appointed for the bank

shall be governed by the provisionsof Section 29 and the last two

paragraphs of Section 30 of the

New Central Bank Act: Provided,

That this Section shall also apply to

conservatorship proceedings of

quasi-banks. - Sec. 67 GBL

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 theMonetary 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. Sec. 68 GBL

Bank Depositor Minor p. 97 Bank Depositor

Minors are vested with the special capacity and power, in their own

right and in their own names, to make savings or time deposits with

and withdraw the same as well as receive interests thereon form

banking institutions, without assistance of their parents or guardians,

provided the following are met

1. at least 7 years of age2. able to read and write

3. have sufficient discretion

4. not otherwise disqualified by any other incapacity

Parents may nevertheless deposit for their minor children and

guardians in their wards.

Minors in their own right and in their own name may also make

deposits and withdraw in Thrift Banks and may receive dividends

- I dont really get what hes asking for

here but in the book, along with the sub-

chapter regarding Minors as depositors,

the only other depositor Dizon refers to

is Corporations. So I really dont know.

Check out p. 96 nalang.
http://thelawdictionary.org/institution/http://thelawdictionary.org/compound-interest/http://thelawdictionary.org/compound-interest/http://thelawdictionary.org/institution/http://thelawdictionary.org/institution/http://thelawdictionary.org/compound-interest/http://thelawdictionary.org/compound-interest/http://thelawdictionary.org/institution/


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and interest. Provided however that if any guardian shall give notice

in writing to any thrift bank not to make payments of deposits,

dividends or interest to the minor of whom he is the guardian, then

such payment shall be made only to the guardian.

6.

a. How state discourages and regulates loans obtained from a bank by its own director, officers and

stockholders.

b. How diffusion of bank ownership is carried out

Ownership of stocks in banks by corporations

The total voting stocks which any corporation, including its wholly or majority owned

subsidiaries, may own in any bank shall not exceed thirty percent (30%) of the voting stock ofthat bank

In the case of a corporation which is wholly owned, or the majority of the voting stock of which is

owned, by any one person or by persons related to each other within the third degree of

consanguinity or affinity, that corporation may own not more than twenty percent (20%) of the

voting stock of any bank.

c. The process of liquidation of a bankrupt bank and the defenses available if any to such move.

Procedure for liquidation - The receiver shall then:

1. File ex parte with the proper regional trial court, and without the requirement of prior notice or

any other action, a petition for assistance in the liquidation of the institution pursuant to a liquidation

plan adopted by the Philippine Deposit Insurance Corporation in the case of a bank or by the Monetary

Board in the case of a quasi-bank;

2. Upon acquiring jurisdiction, the court shall, upon motion by the institution, assist the

enforcement of individual liabilities of the stockholders, directors and officers, and decide on other issues

as may be material to implement the liquidation plan adopted; and

3. Convert the assets of the institution to money, dispose of the same to creditors and other parties,

for the purpose of paying the debts of such institution in accordance with the rules on concurrence and

preference of credit under the Civil Code of the Philippines and he may, in the name of the institution,

institute such actions as may be necessary to collect and recover accounts and assets of, or defend any

action against, the institution.

7. GULLAS V. PNB

FACTS: The United States Veterans Bureau issued a warrant payable to the order of Francico Sabectoria Bacos.

Paulino Gullas and Pedro Lopez signed as endorsers of the aforementioned check. Thereupon, it was cashed by

the Philippine National Bank. Subsequently, the treasury warrant was dishonored. The bank sent notices by mail

to Mr. Gullas which could not be delivered to him at that time because he was in Manila. The bank then

proceeded to apply the outstanding balances of Mr. Gullas account with the part payment of the subject check.

ISSUE: Whether or not PNB properly set off the account of Gullas with the payment of the indorsed check.


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HELD: No. Although PNB had with respect to the deposit of Gullas a right of set off, its remedy was not

enforced properly. Notice of dishonor is necessary in order to charge an indorser and that the right of action

against him does not accrue until the notice is given. Prior to the mailing of notice of dishonor, and withoutwaiting for any action by Gullas, the bank made use of the money standing in his account to make good for the

treasury warrant. The action of the bank was prejudicial to Gullas. As such, Gullas should be awarded nominal

damages because of the premature action of the bank.

8. CHAPTER 3

Secrecy of Bank Deposits

Purpose:

(1) give encouragement to the people to deposit their money in banking institution

(2) discourage private hoarding of depositors so that could be used in economic development

All deposits of whatever nature with bas including investment bonds are considered absolutely confidential and

may not be examined, inquired or looked into even by government officials

RA 8367 prohibits inquire or disclosure of deposits

Exception: (1) written permission of depositor, (2) impeachment, (3) order of court in case of bribery or

dereliction or (4) subject matter of litigation

It shall also apply to foreign currency deposits with the only exception of written permission

In Islamic banks that only exceptions are: (1) inspection of bank auditor, (2) written permission by depositor (3)

subject matter of litigation

Exceptions to Secrecy of Deposits

Accounts can be garnished to insure satisfaction of judgment as there is no real inquiry and some disclosure are

merely incidental

Congress not intended for debtors to escape

General exemption against garnishment shall not apply to foreign transients

Foreign currency deposits of a foreigner who was convicted of crime of rape may be garnished to satisfy

judgment

Under RA 1405 and Anti-Money Laundering Act, the secrecy of deposits do not apply

BSP can also inquire in deposits for periodic and special examinations

Ombudsman has the In-Camera Inspection power to look into deposits provided that there is a pending case is

court and1.) the account must be properly identified

2.) inspection limited to the subject matter

CIR can also look into deposits to determine gross estate of a decedent or he has applied for compromise taxliability

9. CHAPTER 3

Rules of RA 1405 Secrecy of Bank Deposits Act

All deposits of whatever nature with banks or banking institutions in the Philippines including investments

in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, arehereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into

by any person, government official, bureau or office, except upon written permission of the depositor, or in

cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of


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public officials, or in cases where the money deposited or invested is the subject matter of the litigation.-

Sec 2

It shall be unlawful for any official or employee of a banking institution to disclose to any person other than

those mentioned in Section two hereof any information concerning said deposits.Sec. 3

Sanction

Any violation of this law will subject offender upon conviction, to an imprisonment of not more than five

years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.Sec. 5Exceptions

Upon written permission of depositor

In cases of impeachment

Upon order of competent court in cases of bribery, dereliction of duty of public officials or

in cases where money deposited or invested is the subject matter of litigation

Purpose of Bank Secrecy - policy of the Government to give encouragement to the people to deposit their

money in banking institutions and to discourage private hoarding so that the same may be properly utilized by

banks in authorized loans to assist in the economic development of the country.Sec. 1

Since this is a hypothetical case, Im not really sure of the answer, but Im guessing bank and manager are both

liable under Sec. 5 of the BSL since the scenario doesnt fall under the exceptions.

10. CHAPTER 1

Classification of banks

1. Commercial banks

Commercial banks, including Government banks and foreign banks with existing local branches, may

invest in equities of allied undertakings. Equity investments shall not be included in non-relatedactivities.

2. Thrift banks

Thrift banks shall include savings and mortgage banks, private development banks, and stocksavings and loan associations organized under existing laws and any banking corporation that may be

organized for the following purposes:

1. Accumulating the savings of depositors and investing them together with capital loans secured bybonds, mortgages in real estate and insured improvements thereon, chattel mortgage, bonds, and other forms of

security or in loans for personal and household finance, whether secured or unsecured, or in financing for home

building and home development, in readily marketable and debt securities; in commercial papers, and accounts

receivables, drafts, bills of exchange, acceptances or notes arising out of commercial transactions; and in such

other investments and loans which the Monetary Board will determine as necessary in the furtherance of

national economic objectives;

2. Providing short term working capital, or medium- and long-term financing to businesses engaged inagriculture, services, industry and housing; and

3. Providing diversified financial and allied services for its chosen market and constituencies especiallyfor small and medium enterprises and individuals.

3. Rural banks

The rural banking system is the need to promote comprehensive rural development with the end in view of the

following:

1. A more equitable distribution of opportunities, income and wealth;

2. A sustained increase of goods and services produced by the nation for the benefit of thepeople; and


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3. An expanding productivity as a key to raising the quality of life for all.

11.CHAPTER 1

Quasi-banks entities engaged in the borrowing of funds through the issuance, endorsement, or assignment

with recourse or acceptance of deposit substitutes for purposes of relending or purchasing of receivables and

other obligations

Banksentities engaged in the lending of funds obtained in the form of deposits

12. CHAPTER 9

Unclaimed balances includes credits or deposits of money, bullions, security and any evidence of

indebtedness with banks, loan associations and trust corporations in favor of any person (1) known to be dead or

(2) who has not made further deposits or withdrawal during the preceding 10 years or more

Governed by Act No. 3936Requiring Banks to Transfer Unclaimed Balances to Insular Treasury

Such unclaimed balances, together with crease and proceeds shall be deposited to the Treasurer to the credit of

the government.

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