AUTHORITY TO BORROW REPORTS

SEC.23. The corporation is authorized to SEC.25.(A) The Corporation shall annually

borrow from the Bangko Sentral ng Pilipinas make a report of its operations to the
and the Bangko Sentral ng Pilipinas is congress as soon as practicable after 1st day
authorized to lend to the corporation on of January in each year.
such terms as may be agreed upon by the
(B) * The financial transactions of the
corporation and the Banko Sentral ng
corporation shall be audited by the
Pilipinas provided that such loans shall be of
Commission on audit in accordance
short term duration.
with the principles and procedures
ISSUANCE OF BONDS, DEBENTURES AND applicable to commercial corporate
OTHER OBLIGATIONS transactions and under such rules
and regulation as may be prescribed
SEC.24. With the approval of the president
by the COA.
of the Philippines, upon the
recommendation of the department of the
*The audit shall be conducted at the
Finance, The Corporation is authorized to
place or places where accounts of
issue bonds, debentures, and other
corporations are normally kept.
obligations, both local or foreign, as maybe
necessary for the purpose of providing
(C) A REPORT OF THE AUDIT FOR
liquidity for settlement of insured deposits in
EACH FISCAL YEAR ENDING ON June
closed banks.
30 shall be made by the auditor
Provided that : General to the congress not later
than January 15.
1.) The BOD shall determine the
onterest rates, maturity and other
SANCTIONS AND PENALTIES
requirements of said obligation.
SEC.26. (A) Every insured bank shall
2.) That the corporation may provide for
display at each place of business
appropriate reserves for the
maintained by it a sign or signs, and
redemption or retirement of said
shall include a statement in all its
obligation.
advertisements to the effect that its
*All notes, debentures, bonds or such deposits are insured by the
obligations issued by the corporation shall corporation.
except from taxation both as to principal and
interest and shall fully guaranteed by the (B) No insured bank shall pay any
Government. dividend on its capital stock or
interest on its capital notes or
*The Corporation may issue notes, bonds,
debentures or distribute any of its
debentures or other debts without the
capital asssets while its remains in
approval of the President.
default in the payment of any
assessment due to the corporation.

(C) Without prior written consent by
the corporation, no insured bank
shall merge or consolidate with any
bank or institution or assume liability
to pay any deposits made in, or
similar liabilities of, any bank or
institution or transfer assets to any
bank or institution in consideration
of the assumption of liabilities.
(D) The corporation may require an
insured bank to provide protection
and indemnity against burglary,
defalction, losses arising from
discharge of duties by, or particular
act of defaults of its directors,
officers or employees and other
insurable losses.
(E) Any assessment payable by an
insured bank under this act shall be
subject to payment of interest
computed from the date such
assessment became due and payable
and at the legal rate for loans as
prescribed by law or appropriate
authority and in case of willful failure
or refusal to pay such assessment
and interest thereon, there shall be
added penalty equivalent to twice
the amount of interest payable as
computed herein for each day such
violation continue, with the interest
and penalty the corporation may
recover.
(F) The penalty of imprisonment of
not less than six (6) years but not
more than twelve (12) years or a fine
of not less than fifty thousand pesos
(50,000) but not more than ten
million pesos (10,000,000), or both,
at the discretion of the court, shall be
imposed upon :
1. Any director, officer,
employee or agent of a bank.
2. Any willful refusal to submit
reports as required by laws,
rules and regulations.
3. Any unjustified refusal to
permit examination and
audit of the deposit records
or affairs of the institution.
4. Any willful making of false
statement or entry in any
bank reports or document
required by the corporation.
5. Submission of false material
information in connection
with or in relation to any
financial assistance of the
corporation.
6. Splitting of deposits or
creation of fictitious or
fraudulent loans or deposit
accounts.
7. Refusal to receive the notice
of closure.
8. Refusal to allow the
corporation to take over a
closed bank or obstructing
such action of the
corporation.
9. Refusal to turnover or
destroying or tampering
bank records.
10. Fraudulent disposal, transfer
or concealment of any asset,
property or liability of a
closed bank.
11. Violation, of or causing any
person to violate, he
exemption from
garnishment levy,
attachment or execution
provided under this act.
12. Any willful failure or refusal
to comply with, or violation
of any provisions of this act,
or commission of any
irregularities, and/or
conducting business in an
unsafe or unsound manner
as may be determined by the
BOD.
SEC.27. No court, except the
court of appeals, shall issue any
temporary restraining order,
preliminary injunction or
preliminary mandatory injuction
against the corporation for any
action under this act.
This prohibition shall apply in all
cases, disputes, or controversies
instituted by a private party, the
insured bank, or any shareholder
of the insured bank.
The Supreme Court may issue a
retraining order when the
matter is of extreme urgency
involving a constitutional issue.
Any restraining order on
injunction issued in violation of
this section is void and of no
force and effect and any judge
who has issued the same shall
suffer penalty of suspension at
least sixty (60) days without pay.
SEC.28. Exempting Clause – The
corporation shall be exempt
from presidential Decree no.985,
presidential decree no.1597,
Republic act no.6758, as
amended, Joint Resolution
no.4(2009) and other laws on
salary standardization.
Presidential decree no.1177,
Executive order no.248, as
amended, Executive order
no.298 and the provision of
republic act no.10149 with
regard to position classification,
qualification standards and
compensation package of the
employees of the corporation.
SEC.29. Transitory Provisions –
(a) The incumbent president of
the corporation and private
sector members of the BOD shall
continue to exercise their
respective duties and functions
until replaced by the President of
the Philippines.
(b) Payment of surplus dividends
under section of thus act, as
amended, shall be applicable to
banks without court approved
final asset distribution plan at
the time of effectivity of this act.
(c) The preference indicated
under Section 15 of this act, as
amended, shall likewise effective
upon liquidation proceedings
already commenced and
pending as of the effectivity of
this act.
(d) The provision in Section 10 of
this act, as amended, on legal
assistance, protection and
indemnification shall apply to all
cases pending before the
effectivity of this act.
SEC.30. The words “ Central
Bank” and the “Central Bank of
the Philippines” wherever they
appear in Republic Act No.3591,
as amended, is hereby replaced
with Bangko Sentral and or
Bangko Sentral ng Pilipinas,
respectively.
SEC.31. Separability Clause- If
any provision or section of this
act or the application thereof to
any person or circumstances is
held invalid, the other provisions
or sections of this act, in the
application of such provision or
section to other persons or
circumstances, shall not be
affected thereby.
SEC.32. Repealing Clause – All
acts or parts of acts and
executive orders, administrative
orders, or part thereof which are
inconsistent with the provisions
of this act hereby repealded.
SEC.33. Effectivity Clause – This
act shall take effect fifteen days
following the completion of its
publication in the official Gazette
or in two newspaper of general
cisculation.