Podcast
Questions and Answers
What is the primary purpose of conservatorship for a bank?
What is the primary purpose of conservatorship for a bank?
- To restore effective management and liquidity. (correct)
- To permanently close the bank's operations.
- To initiate bankruptcy proceedings.
- To manage customer deposits.
Which authority is responsible for appointing a conservator for a problem bank?
Which authority is responsible for appointing a conservator for a problem bank?
- The Department of Finance.
- The Monetary Board. (correct)
- The Securities and Exchange Commission.
- The bank's board of directors.
What is the maximum duration that a conservatorship can last?
What is the maximum duration that a conservatorship can last?
- Six months.
- One year. (correct)
- Two years.
- Indefinitely.
Which of the following conditions would result in a bank being placed under receivership?
Which of the following conditions would result in a bank being placed under receivership?
What is one of the grounds under which a bank may be declared insolvent?
What is one of the grounds under which a bank may be declared insolvent?
Which of the following actions is prohibited for borrowers in relation to securing a loan?
Which of the following actions is prohibited for borrowers in relation to securing a loan?
What is the consequence of offering compensation to bank officials to influence loan approval?
What is the consequence of offering compensation to bank officials to influence loan approval?
According to the regulations, who is allowed to act as a trustee or administer trust operations?
According to the regulations, who is allowed to act as a trustee or administer trust operations?
What is one of the responsibilities of a trust entity in managing funds or property?
What is one of the responsibilities of a trust entity in managing funds or property?
Which of the following is NOT a power of a trust entity?
Which of the following is NOT a power of a trust entity?
What is the implication of employing casual or non-regular personnel in banking operations?
What is the implication of employing casual or non-regular personnel in banking operations?
In a legal context, who can be appointed as guardian or trustee for an incompetent person?
In a legal context, who can be appointed as guardian or trustee for an incompetent person?
What is one outcome of attempting to defraud the bank during legal proceedings?
What is one outcome of attempting to defraud the bank during legal proceedings?
What is the minimum number of hours that banks must transact business on working days?
What is the minimum number of hours that banks must transact business on working days?
Which of the following is NOT a prohibited transaction for bank directors, officers, employees, or agents?
Which of the following is NOT a prohibited transaction for bank directors, officers, employees, or agents?
How many hours must banks that choose to operate on non-working days conduct business?
How many hours must banks that choose to operate on non-working days conduct business?
Which of the following services is a bank authorized to provide?
Which of the following services is a bank authorized to provide?
What must banks do if they decide to open on days other than working days?
What must banks do if they decide to open on days other than working days?
Which activity is banks explicitly prohibited from engaging in?
Which activity is banks explicitly prohibited from engaging in?
Which of the following is allowed for banks with prior approval of the Monetary Board?
Which of the following is allowed for banks with prior approval of the Monetary Board?
What defines 'working days' for banks?
What defines 'working days' for banks?
What is the maximum percentage of voting stock in a domestic bank that foreign individuals and non-bank corporations can own or control?
What is the maximum percentage of voting stock in a domestic bank that foreign individuals and non-bank corporations can own or control?
How should the citizenship of a corporation that is a stockholder be determined?
How should the citizenship of a corporation that is a stockholder be determined?
Which of the following relationships is classified as a family group under the General Banking Law?
Which of the following relationships is classified as a family group under the General Banking Law?
Which of the following statements about public officials serving as officers of private banks is true?
Which of the following statements about public officials serving as officers of private banks is true?
What is required for a universal or commercial bank to open a branch outside the Philippines?
What is required for a universal or commercial bank to open a branch outside the Philippines?
When considering corporate stockholdings, how are two or more corporations owned by the same family group treated?
When considering corporate stockholdings, how are two or more corporations owned by the same family group treated?
What responsibility does a bank have regarding its branches and offices?
What responsibility does a bank have regarding its branches and offices?
Which type of bank is subject to a different prohibition regarding public officials serving as officers?
Which type of bank is subject to a different prohibition regarding public officials serving as officers?
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Study Notes
Foreign Stockholdings
- Foreign individuals and non-bank corporations are limited to owning up to 40% of the voting stock in a domestic bank.
- Ownership percentage is determined by the citizenship of individual stockholders; for corporate stockholders, it follows the citizenship of controlling individuals, regardless of incorporation location.
Stockholdings of Family Groups
- Individuals related within the fourth degree of consanguinity or affinity are regarded as family groups, necessitating disclosure in transactions with the bank.
Corporate Stockholdings
- Corporations held by the same family group must disclose their related interests in all dealings with the bank.
Prohibition on Public Officials
- Public officials, whether elected or appointed, cannot serve as officers of private banks unless specified by the Rural Banks Act or other existing laws.
Bank Branches
- Universal and commercial banks can open branches domestically and internationally with Bangko Sentral's approval.
- Other banks must adhere to relevant laws governing their branching.
- Banks can use branches for selling products from associated companies with prior Monetary Board approval.
Banking Days and Hours
- Banks must operate for at least six hours on working days; additional hours on weekends or holidays are permitted with Bangko Sentral notification.
- Working days are typically Monday through Friday, barring holidays.
Other Banking Services
- Responsibilities include custodial services, acting as financial agents, collections and payments, managing investment accounts, and renting safety deposit boxes.
Prohibition to Act as Insurer
- Banks are prohibited from directly engaging in insurance business as insurers.
Prohibited Transactions for Bank Personnel
- Engagement in fraudulent transactions, false reporting, unauthorized information disclosure, acceptance of undue remuneration for approvals, and outsourcing essential banking functions is strictly forbidden.
Prohibited Transactions for Borrowers
- Fraudulent property valuation, misrepresentation for loans, defrauding banks during recovery processes, and offering inducements for approval of loans are prohibited.
Employment Restrictions
- Casual or non-regular personnel cannot be employed in areas involving bank deposits, as per Republic Act No. 1405 (Banks Secrecy Law).
Trust Operations
- Only authorized entities can act as trustees or manage trust properties, required to exercise diligence similar to that expected in similar enterprises.
Trust Operations Powers
- Powers include acting as a trustee, executors of estates, guardians, managing trusts, and establishing common trust funds as regulated by the Monetary Board.
Conservatorship
- Conservatorship serves as temporary management for problem banks, with appointments by Bangko Sentral; the term cannot exceed one year.
Receivership
- Defined as a state where a bank is declared insolvent and forbidden from conducting business, with specific conditions outlined for this determination including inability to pay liabilities and asset insufficiency.
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