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The Philippines has a comprehensive banking

system encompassing various types of banks, from

large universal banks to small rural banks and even non-

banks. At present, there are seventeen universal banks,23 commercial banks, 84 thrift banks, 711 rural banks,

44 credit unions and twelve non-banks with quasi-banking

functions, all licensed with the Bangko Sentral ng 

Pilipinas. Under Republic Act No. 8791, also known as the

General Banking Act of 2000, share roughly the same

powers.

  An institution which accepts deposits, makes

business loans, and offers related services . Commercial banks also allow for a variety of deposit accounts, suchas checking , savings, and time deposit . Theseinstitutions are run to make a profit and owned by agroup of individuals, yet some may be members of the

Federal Reserve System. While commercial banks offer  services to individuals, they are primarily concerned withreceiving deposits and lending to businesses.

  POWERS OF A COMMERCIAL BANK 

In addition to having the powers

of a thrift bank, a commercial bank has

the power to accept drafts and issue

letters of credit ; discount and 

negotiate   promissory notes, drafts,

bills of exchange, and other evidences

of  debt ; accept or create demand 

deposits; receive other types of 

deposits and deposit substitutes; buy 

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and sell foreign exchange and  gold  or  silver   bullion; acquire marketable

bonds and other debt securities; and extend credit.

  A system of banking where banks are

allowed to provide a variety of services to their customers. In universal banking, banks are not limited  to just loans, checking and savingsaccounts, and other similar activities, but areallowed to offer  investment services as well.Universal banking is less common in the United 

States than in Europe.

 

Powers of a Universal Bank    A universal bank has the same powers as acommercial bank with the following additional  powers: the powers of an investment house as

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 provided in existing laws and the power to invest in non-allied enterprises.

Catering to the lower income groups,

thrift banks are primarily concerned with the mobilization of small

savings and the provision of loans at generally longer and easier

terms compared to commercial banks. Small producers such as

farmers, cottage industry entrepreneurs, and consumers rely on

these banks for financing their production and consumption

requirements. Thrift banks consist of (a) savings and mortgagebanks, (b) private development banks and (c) stock savings and

loan associations.

 

Powers of a Thrift Bank 

 A thrift bank has the power to accept savings and time deposits, act as a correspondent with other financialinstitutions and as a collection agent for government 

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entities, issue mortgages, engage in real estatetransactions and extend credit. In addition, thrift banksmay also maintain checking accounts, act as a depository for government entities and local government units and 

engage in quasi-banking and money market operationssubject to the approval of the Bangko Sentral.

 These are government-sponsored or

assisted banks (which are privately engaged and largelyprivately-owned) that provide credit facilities on

reasonable terms to farmers and merchants, or to

cooperatives of farmers and merchants, or in general, to

the people of the rural community. They are classified

into those with and without authority to accept demand .

Powers of a Rural Banks

Rural and cooperative banks are the more popular type of banks in the rural communities. Their role is to promote and expand the rural economy in an orderly and effective manner by 

 providing the people in the rural communities with basic financialservices. Rural and cooperative banks help farmers through thestages of production, from buying seedlings to marketing of their 

 produce. Rural banks and cooperative banks are differentiated from each other by ownership. While rural banks are privately owned and managed, cooperative banks are organized/owned by cooperatives or federation of cooperatives.

 A rural bank has the power to provide adequate credit facilities tofarmers and merchants or to cooperatives of such farmers and 

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merchants and, in general, to the people of the rural communitiesof which the rural bank operates in.

Leon Guinto Memorial College, Inc.

Atimonan, Quezon

S.Y. 2010-2011

PROJECT IN 

FINANCE

  Submitted By:

 Ana Nikki V. Columbres

I-BSA

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Submitted To:

Mrs. Cherrie Lou A. Dedase

~ Instructor ~