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UNIVERSAL AND COMMERCIAL BANKS
Prepared by: Kevin Buyco, Joefrey Uy, Enna Trivilegio LlB III-B
Page 1 of 4
What is Universal Bank?
Are large commercial banks licensed by the Bangko Sentral ng
Pilipinas(BSP) “to do both commercial and investment bank.
What are the powers of Universal Bank?
1. The power authorized for a commercial bank;
2.
The powers of an investment house as provided in existing
laws; and
3. The power to invest in non-allied enterprise.
What are the powers of Commercial Banks?
1. The general powers incident to corporations,
2.
All such powers as may be necessary to carry on the business of
commercial banking, such as,
a)
accepting drafts and issuing letters of credit;
b)
discounting and negotiating promissory notes, drafts , bills
of exchange, and other evidences of debt;
c) accepting and creating demand deposits;
d) receiving other types of deposits and deposit substitutes;
e) buying and selling foreign exchange and gold or silver
bullion; acquiring marketable bonds and other debt
securities; and
f) extending credit, subject to such rules as the Monetary
Board may promulgate.
g) determination of bonds and other debt securities eligible
for investment, the maturities and aggregate amount of
such investments,
ORGANIZATION
The Monetary Board may authorize the organization of a bank or
quasi-banking subject to the following conditions:
1.
The entity is a STOCK corporation
The Monetary Board may prescribe rules and regulation on
the types of stock a bank may issue, including the terms
thereof and rights appurtenant thereto to determine
compliancewith laws and regulations governing capital and
equity structure of banks.
2. FUNDS are obtained from the public, which shall mean 20 or
more persons
3.
That the minimum CAPITAL requirements prescribed by theMonetary Board for each category of banks are satisfied.
CAPABILITIES
The Monetary Board shall take into considerations their capabilities
in terms of their financial resources and technical expertise and
integrity.
CAPITAL REQUIREMENTS
UNIVERSAL BANKS --------- 4,950.0 In million pesos
COMMERCIAL BANKS ------ 2, 400.0 in million pesos
At least 25% of the total authorized capital stock shall be
subscribed by the subscribers of the proposed bank, and at
least 25% of such subscription shall be paid up, provided that in
no case shall be paid-up capital be less than the minimum
required capital stated above.
INCORPORATORS and SUBSCRIBERS
1. Must be persons of integrity and of good credit standing in the
business community.
2. Must have adequate financial strength to pay for their
proposed subscription in the bank.
3. Must not have been convicted of any crime involving moral
turpitude.
4. Those person charged with the supervision of, or the granting
of loans to banks.
5. May organized with not less than 5 nor more than 15
incorporators.
BANK BRANCHES
Universal and commercial banks may open branches or other offices
within or outside the Philippines upon PRIOR approval of Bangko
Sentral.
A bank may, subject to prior approval of the Monetary Board, use
any or all its branches as outlets fo the presentation and/or sale of
the financial products of its allied undertaking or of its investment
house units.
A bank and its branches and offices shall be treated as one unit.
BOARD OF DIRECTORS
There shall be atleast 5 and a maximum of 15 members of the board
of directors of bank, 2 of whom shall be independent directors.
In case of merged or consolidated banks, they shall not exceed 21
members.
Non-Filipino Citizens may become members of the board of
directors of a bank to the extent of the foreign participation in the
equity of the said bank. SEC 7, RA 7721
Independent director means a person other than an officer or
employee of the bank, its subsidiaries or affiliates or related
interests.
1. Not an officer or employee of the bank for the past 3years from
the date of his election.
2. Not a director or officer of related company.
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UNIVERSAL AND COMMERCIAL BANKS
Prepared by: Kevin Buyco, Joefrey Uy, Enna Trivilegio LlB III-B
Page 2 of 4
3. Not a relative within 4th
civil degree of consanguinity or affinity
of any director, officer or majority of stockholder.
4.
Not acting as nominee or representative of any director or
officer
5.
Free from any business or other relationships with theinstitution or any of its major stockholders which could
materially interfere with the exercise of his judgment.
CAPITAL REQUIREMENTS
UNIVERSAL BANK (UB) COMMERCIAL BANK (CB)
P 4, 950,000, 000 P 2, 400,000, 000
EQUITY INVESTMENT
UNIVERSAL BANK (UB) COMMERCIAL BANK
(CB)
Allied (Financial or Non-Financial)or Non-Allied Enterprises.
Allied (Financial orNon-Financial)
Enterprises
Total investment in Equities shall
not exceed 50% of the net worth
of the bank.
Shall not exceed 35%
of the net worth of the
bank.
Equity investment in any one of
the enterprise shall not exceed
25% of the net worth of the bank.
Same.
Subject to approval of Monetary
Board
Same.
Financial Allied Enterprises
UB CB
Can own up to 100% equity of:
Thrift Bank
Rural Bank
Financial Allied
Enterprises
Thrift Bank
Rural Bank
Financial Allied Enterprises (If
such equity is in another CB such
investment shall remain a
minority holding.)
May own up to 100% of voting of Another UB or CB.
Provided, the former is publicly listed.
Non-Financial Allied Enterprises
May own up to 100% equity.
Equity Investments in Quasi-Banks
To promote Competitive conditions in financial markets,
the Monetary Board may further limit to 40% equity
investments of UB and CB in Quasi-Banks
Equity Investment of UB in Non Allied Enterprises
1. Shall not exceed35% of the total equity in that
enterprise nor
2.
Shall it exceed35% of the voting stock in that
enterprise.
Net Worth – Total unimpaired capital paid in capital including paid
in surplus, retained earnings and undivided profits, net valuation
reserves and other adjustments as may be required by BSP.
Allied Enterprises:
a.
Leasing companies including leasing of stalls and spaces in a
commercial establishment; Provided, that bank investment
in/acquisition of shares of such leasing company shall be
limited/applicable only in cases of conversion of outstanding
loan obligations into equity.
b. Banks;
c. Investment houses;
d. Financing companies;
e. Credit card companies;
f. Financial institutions catering to small and medium scale
industries including venture capital corporations;
g. Companies engaged in stockbrokerage/securities dealership;
and
h. Companies engaged in foreign exchange dealership/brokerage
Quasi-banks (QB)- refer to entities engaged in the borrowing of funds through the
issuance, endorsement or assignment with recourse or
acceptance of deposit substitutes (as defined in Sec. 95 RA
7653, the New Central Bank Act) for purposes of relending or
purchasing of receivables and other obligations. (last par. of
Sec. 4)
RESTRICTION ON BANK EXPOSURE TO DOSRI
Gen. Rule: A director or officer of any bank shall neither:
1. Directly or indirectly, for himself or asthe representative or
agent of others,borrow from such bank; nor
2.
Become a guarantor, indorser or suretyfor loans from suchbank to others, orin any manner be an obligor or incurany
contractual liability to the bank.
Exception –
except with the written approval of the majority of all the
directors of the bank, excluding the director concerned. The
required approval shall be entered upon the records of the
bank and a copy of such entry shall be transmitted forthwith to
the appropriate supervising and examining department of the
BSP.
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UNIVERSAL AND COMMERCIAL BANKS
Prepared by: Kevin Buyco, Joefrey Uy, Enna Trivilegio LlB III-B
Page 3 of 4
Eligible to open an account (PNB)
SAVINGS (Individual/Joint accounts)
Citizens and Resident Aliens
o Persons at least 12 years old
o Below 12 years old ITF (In Trust For) by parent, legal
guardian, trustee, administrator
Non-Resident Aliens
o Peso Savings Accounts - single account only
o Dollar Savings Accounts - individual and joint
accounts
CHECKING (Peso account)
Citizens/ Resident Aliens/Non-Resident Aliens
o Person of legal age (at least 18 years old)
For walk-in applicants:o Maintenance of savings account for at least six (6)
months before he can open a checking account
TIME DEPOSIT Peso and FX Currency
Individual/Joint Account
Citizens and Resident Aliens
o Person of legal age (at least 18 years old)
o Below 18 years old ITF by a parent, legal guardian,
trustee administrator
Non-Resident Aliens
o FX Current Deposit only
Note:
Such written approval shall not be required for loans, other
credit accommodations and advances granted to officers under a
fringe benefit plan approved by the BSP.
Dealings of a bank with any of its directors, officers orstockholders and their related interests shall be upon terms not
less favorable to the bank than those offered to others.
After due notice to the board of directors of the bank, the office
of any bank director or officer who violates the provisions of this
Section may be declared vacant and the director or officer shall
be subject to the penal provisions of the NCBA.
The MB may regulate the amount of loans, credit
accommodations and guarantees that may be extended, directly
or indirectly, by a bank to its DOSRI, as well as investments of
such bank in enterprises owned or controlled by said directors,
officers, stockholders and their related interests.
The outstanding loans, credit accommodations and guarantees
which a bank may extend to each of its DOSRI, shall be limited toan amount equivalent to their respective unencumbered
deposits and book value of their paid-in capital contribution in
the bank.
The loans, credit accommodations and guarantees secured by
assets considered as non-risk by the MB shall be excluded from
such limit.
The loans, credit accommodations and advances to officers in
the form of fringe benefits granted in accordance with rules as
may be prescribed by the Monetary Board shall not be subject to
the individual limit.
MINORS DEPOSITORS
General Rule: Minors cannot engage in commerce
exceptions:
o to continue business of deceased parents through guardian
o
court authorizes guardian to place minor and property in
business
o
minor is an alien and his national law allows him to be a
merchant
Minor depositors are also allowed in the case of Banco De Oro or
BDO with their Junior Savers Program.
In the case of UniBanks in the Philippines, such as the Philippine
National Bank, those who are eligible to open an account are as
follows:
Insurance Deposits for Foreign Accounts
PDIC Insurance Deposits for Peso Accounts and Dollar
Accounts
Foreign Currency Deposit System.
The foreign currency deposit operations of banks under R.A. No.
6426, as amended, shall be governed by the following rules and
regulations.
Qualification requirements
KBs/UBs may be authorized to operate an FCDU or EFCDU: Provided,
That they meet the minimum capital requirements.
Under the Manual of Regulations or Banks of BSP (2008
edition)
Currency composition of the cover .
FCDUs of TBs shall maintain the foreign currency cover in the
same currency as that of the corresponding foreign currency
deposit liability. FCDUs/EFCDUs of KBs/UBs shall maintain
BDO - JUNIOR SAVERS
A savings account for your children 12 years and
younger. Build up their savings and at the same time
enjoy perks and privileges from selected store
affiliates.
The parents may also open the account for their kids
(7 years and below) via an "In Trust For" account
since these younger kids can't sign yet on their own.
With the JSC variant, opening a kiddie savings
account and the opportunity of saving is now more
accessible to both kids and parents.
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UNIVERSAL AND COMMERCIAL BANKS
Prepared by: Kevin Buyco, Joefrey Uy, Enna Trivilegio LlB III-B
Page 4 of 4
not less than 70% of the foreign currency cover in the same
currency as that of the liability and 30% or less, at the option
of the FCDU/EFCDU, may be denominated.
REPUBLIC ACT NO. 3591, as amended: AN ACT ESTABLISHING THE PHILIPPINE DEPOSIT INSURANCE
CORPORATION, DEFINING ITS POWERS AND DUTIES AND
FOR OTHER PURPOSES
SECTION 5. The deposit liabilities of any bank or banking
institution, which is engaged in the business of receiving
deposits as herein defined on the effective date of this Act,
or which thereafter may engage in the business of receiving
deposits, shall be insured with the Corporation. (As amended
by R.A. 6037, 04 August 1969; renumbered from Sec. 4 by
R.A. 9302, 12 August 2004)
PDIC Insurance Deposits
Whenever an insured bank shall have been closed by the Monetary
Board
Section 4 of R.A. 9576 effective June 1, 2009, the
maximum deposit insurance coverage is P500,000 per
depositor shall be paid by the Corporation. All deposit
accounts by a depositor in a closed bank maintained in the
same right and capacity shall be added together.
Types of Deposits Insured b PDIC
Deposits of all
commercial banks
savings and mortgage banks rural banks
private development banks
cooperative banks
savings and loan associations
branches and agencies in the Philippines of foreign banks
and
all other corporations authorized to perform banking
functions in the Philippines,
are insured with PDIC.
Exclusions from deposit insurance coverage as stipulated in
R.A. No. 9576:
Investment products such as bonds, securities and trust
accounts;
Deposit accounts which are unfunded, fictitious or
fraudulent;
Deposit products constituting or emanating from unsafe
and unsound banking practices;
Deposits that are determined to be proceeds of an unlawful
activity as defined under the Anti-Money Laundering Law.
Philippine banks with branches outside the country –
RA 9576 stipulates that subject to the approval of the
Board of Directors, any insured bank with branch outside
the Philippines may elect to include for insurance itsdeposit obligations payable at such branch.
PDIC Charter provides that the deposits in branches and subsidiaries
of foreign banks licensed by the Bangko Sentral ng Pilipinas (BSP) to
perform banking functions in the Philippines are insured by the
PDIC.
Foreign currency deposits are also insured by PDIC pursuant to RA
6426 (“An act instituting a foreign currency deposit system in the
Philippines, and for other purposes”) and Central Bank (CB) Circular
No. 1389.
Depositors may receive payment in the same currency inwhich the insured deposit is denominated.
Insurance coverage.
Foreign currency deposits shall be insured under the
provisions of R.A. No. 3591, as amended.
Depositors are entitled to receive payment in the same
currency in which the insured deposits are denominated.