BANKING LAWS COURSE OUTLINE, AY 2014

A. General Banking Law of 2000 (R.A. 8791)

1. State Policy
2. Banks, Defined and Classified (Secs. 1 to 3, 8 to 22)
Cases:
Simex International v. Court of Appeals, 183 SCRA 360, 366-367 (1990
Metropolitan Bank and Trust Company vs. Cabilzo, G.R. No. 154469,
December 6, 2006
Serrano vs. Central Bank, G.R. No. L-30511, February 14, 1980, 96 SCRA 96
3. Distinction of banks from quasi-banks and trust entities (Secs. 4 to 7)
5. Diligence required of banks
Consolidated Bank v. CA & Diaz, G.R. No. 138569. Sept. 11, 2003
PNB v. Pike, G.R. No. 157845, Sept. 20, 2005
BPI v. Lifetime Marketing, G.R. No. 176434, June 25, 2008
BPI v. Casa Montessori, G.R. No. 149454, May 28, 2004
Central Bank vs. Citytrust Bank, G.R. No. 141835, Feb. 4, 2009
6. Organization, Management and Administration of Banks, Quasi-Banks and Trust
Entities
A. Organization
B. Stockholdings
C. Fit and proper rule
D. Limitation on compensation and benefits of directors and officers
E. Prohibition on public officials
F. Branches
G. Banking days
H. Rule on strikes and lockouts

7. Bank powers and liabilities (Secs. 34 to 53)
A. Operations of Universal Banks
B. Operations of Commercial Banks

8. Nature of bank funds and bank deposits (sec. 33)
A. Kinds of Deposit
1. Demand deposits
Drawing against uncollected deposits (DAUD)
Current accounts of bank officers
2. Savings deposit
3. Negotiable Order of Withdrawal (NOW) Account
4. Time deposits
5. Deposit Substitute Operations
6. Foreign Currency Deposits
7. Anonymous and Numbered Accounts
Cases:
Central Bank of the Philippines vs. Morfe, 63 SCRA 114, 119
Bank of the Philippine Islands vs. Court of Appeals, G.R. No. 104612, May
10, 1994
The Consolidated Bank and Trust Corporation vs. Court of Appeals, G.R.
No. 138569, September 11, 2003.
BPI Family Bank vs. Franco G.R. No. 123498, November 23, 2007.
Bank of the Philippine Islands vs. Casa Montessori Internationale, G.R. No.
149454, May 28, 2004.
Bank of the Philippine Islands vs. Court of Appeals, G.R. No. 104612, May
10, 1994.
BPI vs. Roxas, G.R. No. 157833, October 15, 2007
Associated Bank vs. Tan, G.R. No. 156940, December 14, 2004, 446 SCRA
282
Banco de Oro Savings and Mortgage Bank vs. Equitable Banking Corp.,
G.R. No. L-74917, January 20,1988
Bank Of The Philippine Islands Vs. Court Of Appeals, G.R. No. 136202, Janu-
ary 25, 2007
Philippine Commercial International Bank vs. Court of Appeals, G.R. No.
121413, January 29, 2001
B. Minors and Corporations as Depositors
C. Matured Time Deposits
D. Risk-based capital

9. Grant of loans and security requirements
A. Ratio of net worth to total risk assets
B. Single borrowers limit
C. Restrictions on bank exposure to DOSRI (directors, officers, stockholders and
their related interests)
D. Loans against Real Estate
E. Loans against chattels and other intangible properties
F. Loan purposes and grant
G. Unsecured loans
H. Other security requirements
I. Amortization on loans
J. Prepayment of loans
K. Foreclosure of real estate mortgage
L. Renewal or extension of loans and other credit accommodations
M. Provisions for losses and write-offs
Cases:
GC Dalton Industries, Inc., v. Equitable PCI Bank, G.R. No. 171169, August
24, 2009
Equitable PCI Bank vs. Ng Sheurig Ngor, G.R. No. 171545, December 19,
2007
Floirendo vs. Metropolitan Bank and Trust Co., G.R. No. 148325, September
3, 2007.
Trade & Investment Development Corporation of the Philippines vs.
Roblett Industrial Construction Corporation, G.R. No. 139290, May 19, 2006
New Sampaguita Builders Construction vs. Philippine National Bank, G.R.
No. 148753, July 30, 2004

10. Other provisions
A. Major investments
B. Ceiling on investments in certain assets
C. Acquisition of real estate
D. Other banking services
E. Unsafe or unsound banking practices
F. Prohibition on dividend declaration

11. Penalties for violations
a) Fine, imprisonment
b) Suspension or removal of director or officer
c) Dissolution of bank

B. The New Central Bank Act (R.A. 7653)

1. State policies
2. Creation of the Bangko Sentral ng Pilipinas (BSP)
3. Responsibility and primary objective
4. Monetary board - powers and functions
5. How the BSP handles banks in distress
a) Conservatorship
b) Closure Close Now, Hear Later
Cases:
Rural Bank of San Miguel v. Monetary Board, G.R. No. 150886, February
16, 2007
Banco Filipino Savings and Mortgage Bank v. Ybanez, G.R. No. 148163,
December 6, 2004
c) Receivership
d) Liquidation

6. Legal Tender, Legal tender power

7. How the BSP handles exchange crisis
a) Domestic monetary instability
b) Abnormal movements in the monetary aggregates, credit or price level
c) Foreign Exchange
d) Liquidity problems of banks

C. Law on Secrecy of Bank Deposits (R.A. 1405, as amended)
1. Purpose
2. Prohibited acts
3. Deposits covered
Cases:
Ejercito v. Sandiganbayan, G.R. Nos. 157294-95, November 30, 2006
4. Exceptions
5. Garnishment of deposits, including foreign deposits
6. Penalties for violation

D. Philippine Deposit Insurance Corporation Act

1. Basic policy
2. Concept of insured deposits
3. Liability to depositors
a. Deposit liabilities required to be insured with PDIC
b. Commencement of liability
c. Deposit accounts not entitled to payment
d. Extent of liability
e. Determination of insured deposits
f. Calculation of liability
i. Per depositor, per capacity rule
ii. Joint accounts
iii. Mode of payment
iv. Effect of payment of insured deposit
v. Payments of insured deposits as preferred credit under Art. 2244, Civil Code
vi. Failure to settle claim of insured depositor
vii. Failure of depositor to claim insured deposits
(i) Examination of banks and deposit accounts
(ii) Prohibition against splitting of deposits
(iii) Prohibition against issuances of TROs, etc.

E. Truth in Lending Act (R.A. 3765)

A. Purpose
B. Obligation of creditors to person to whom credit is extended
C. Covered and excluded transactions
D. Consequences of non-compliance with obligation
Cases:
Development Bank of the Philippines v. Felipe Arcilla, G.R. No. 161397,
161426, June 30, 2005
United Coconut Planters Bank v. Sps. Beluso, G.R. No. 159912, August 17,
2007

Anti Money Laundering Act (R.A. 9160)
1. Basic Policy (Sec. 2)
2. Definitions (Sec. 3)
3. Offenses (Sec. 3 & 4)
4. Anti-Money Laundering Council (Sec. 7)
5. Prevention (Sec. 9)
6. Powers of AMLC (Sec. 10 to 12)
7. Foreign State Assistance (Sec. 13)
8. Penal Provisions (Sec. 14)
Cases:
Republic vs. Glasgow Credit, G.R. No. 170281, Jan. 18, 2008
Republic vs. Hon. EugenioG.R. No. 174629, February 14, 2008
People vs. Estrada, G.R. No. 164368-69, April 2, 2009