BANK CLASSIFICATION UNIVERSAL BANKS

GOVERNING LAW

BUSINESS NAME RULES

PURPOSE -

SCOPE/POWERS/AUTHORITY The powers of a commercial bank The powers of an investment house The power to invest in non-allied enterprises The general powers incident corporations All such powers as may be necessary to carry on 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 other evidences 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 o Acquiring marketable bonds and other debt securities o Extending credit subject to such rules as the Monetary Board may promulgate Accept savings and time deposits Open current or checking accounts o Bank must has at least Php20M worth of net assets o Subject to the guidelines established by the Monetary Board Shall be allowed to clear its demand deposit operations with the BSP and the PCHC Acts as correspondent for other financial institutions Acts as collection agent for government entities subject to the guidelines set forth by the MB Acts as official depository of national agencies and municipal, city or provincial funds where the thrift bank is located subject to the guidelines set forth by the MB Rediscount paper with the PNB, Land Bank of the Philippines and the DBP Issue, buy and sell mortgage and chattel mortgage subject to the guidelines set forth by the MB Purchase, hold and convey real estate under the same conditions as those governing commercial banks Engage in quasi-banking and money market operations subject to the guidelines set forth by the MB

COMMERCIAL BANKS

Only a bank that is granted universal/commercial banking authority may represent itself to the public as such in connection with its business name

Republic Act No. 7906: Thrift Banks Act

THRIFT BANKS

Allowed to adopt and use any name With the following words affixed after its business name: A Thrift Bank, Savings Bank, A Private Development Bank or A Stock Savings and Loan Association

Accumulating the savings of depositors and investing them, together with capital loans secured by bonds, mortgages, and others and investing them in the furtherance of economic objectives Providing short-term working capital, medium- and long-term financing, to businesses engaged in agriculture, services, industry and housing Providing diversified financial and allied services for its chosen market and

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BANK CLASSIFICATION

GOVERNING LAW

BUSINESS NAME RULES

PURPOSE constituencies specially for small and medium enterprises and individuals -

SCOPE/POWERS/AUTHORITY Open domestic letters of credit Extend credit facilities to private and government employees Extend credit against the security of jewelry, precious stones and articles of similar nature subject to the guidelines set forth by the MB Offer other banking services

Republic Act No. 7353: Rural Banks Act

RURAL BANKS

May adopt a corporate name or use a business name/style Required words: Rural or Coop, A Cooperative Bank or A Rural Bank Required size: at least one-half of the size of the business name Fine for unauthorized usage: Php50 per day -

To make needed credit available and readily accessible in the rural areas Meeting the normal credit needs of farmers, fishermen and farm families owning or cultivating land dedicated to agricultural production as well as the normal credit needs of cooperatives and merchants Organized by the majority of shares of which is owned and controlled by, cooperatives primarily to provide financial and credit services to cooperatives Membership of a cooperative bank shall include only cooperatives and federations of

Give preference to application of farmers and merchants in granting loans Where there are no government banks, rural banks may deposit in private banks more than the amount prescribed by the Single Borrowers Limit subject to Monetary Board obligations

COOPERATIVE BANKS

Republic Act No. 6938: Cooperative Code

To carry on banking and credit services for the cooperatives To receive financial aid or loans from the Government and the BSP for and in behalf of the cooperative banks and primary cooperatives and their federations engaged in businesses and supervise the lending and collection of loans To mobilize savings of its members for the benefit of the cooperative movement To act as a balancing medium for the surplus of funds of cooperatives and their federations To discount bills and promissory notes issued and drawn by cooperatives To issue negotiable instruments to facilitate the activities of cooperatives

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BANK CLASSIFICATION

GOVERNING LAW

BUSINESS NAME RULES

PURPOSE cooperatives -

SCOPE/POWERS/AUTHORITY To issue debentures subject to the approval of and under conditions and guarantees to be prescribed by the Government To borrow money from banks and other financial institutions within the limits prescribed by the BSP To carry out all other functions as may be prescribed by the Cooperative Development Authority subject to prior approval by the BSP Authorized to operate an investment house pursuant to PD 129 and as a venture capital corporation pursuant to PD 1688 May have a direct interest as a shareholder, partner, owner or any other capacity in any commercial, industrial, agricultural, real estate or development project under mudarabah form of partnership or musharaka joint venture agreement or by decreasing participation, or otherwise invest under any of the various contemporary Islamic financing techniques or modes of investment for profit sharing May carry on commercial operations for the purpose of realizing its investment banking objectives by establishing enterprises or financing existing enterprises or otherwise by participating in any way with other companies May perform all business ventures and transactions as may be necessary to carry out the objectives of its charter within the framework of the Islamic banks financial capabilities and technical considerations provided that these shall not involve any riba or other activities prohibited by the Islamic Sharia principles

To promote and accelerate the socioeconomic development of the Autonomous Region by performing banking, financing and investment operations To establish and participate in agricultural, commercial and industrial ventures based on the Islamic concept of banking -

ISLAMIC BANKS

Republic Act No. 6848: Charter of Al Amanah Islamic Investment Bank of the Philippines

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