FURTHER AMENDING REPUBLIC ACT NUMBERED TWO HUNDRED SIXTY-FIVE, AS AMENDED, OTHERWISE KNOWN AS "THE CENTRAL BANK ACT"

• Number: Presidential Decree No. 1827
• Sections: 29

Preamble

WHEREAS, it is the responsibility of the Central Bank of the

Philippines to administer the monetary, banking and credit system of the

Republic, and as the central monetary authority, to provide policy direction in

the areas of money, banking and credit;

WHEREAS, monetary, banking and credit policies should be

more responsive to the requirements of economic development;

WHEREAS, the Central Bank should be given greater

flexibility in the use of its credit facilities to meet the demands of economic

development;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution, do hereby

order the amendment of Republic Act No. 265, as amended, as follows:

Section 1

SECTION 1. A new paragraph is hereby added after the second

paragraph of Section 4 of Republic Act No. 265, as amended, to read as

follows:

"The Central Bank may compromise, done or release, in whole or in part, any

claim of or settled liability to the Bank, regardless of the amount involved,

under such terms and conditions as may be imposed by the Monetary Board to

protect the interests of the Bank."

Section 2

SEC. 2. Section 13 of the same Act is hereby amended to read

as follows:

"SEC. 13. Withdrawal of persons having a personal

interest. —Whenever any member attending a meeting of the Monetary Board

has a material personal interest, directly or indirectly, in the discussion or

resolution of any given matter, said member shall not participate in the

discussion or resolution of the matter and must retire from the meeting during

the deliberations thereon. The subject matter, when resolved, and the fact that

a member had a personal interest in it, shall be made available to the public.

The minutes of the meeting shall note the withdrawal of the member

concerned."

Section 3

SEC. 3. Section 25 of the same Act is hereby amended to read

as follows:

"SEC. 25. Creation of the appropriate departments.

—In order to assure the observance of this Act and of other pertinent laws,

and of the rules and regulations of the Monetary Board, the Central Bank shall

have appropriate supervising and examining departments which shall be charged

with the supervision and periodic or special examinations of banking

institutions operating in the Philippines, including all Government credit

institutions, including their subsidiaries and affiliates, non-bank financial

intermediaries, and subsidiaries and affiliates of non-bank financial

intermediaries performing quasi-banking functions: Provided, That

affiliates of banking institutions, non-bank financial intermediaries, and

subsidiaries and affiliates of non-bank financial intermediaries performing

quasi-banking functions may be subject to special examination if the

circumstances so warrant as determined by the Monetary Board: Provided,

further, That a subsidiary means a corporation more than 50% or the voting

stock of which is owned by a banking institution or non-bank financial

intermediary and an affiliate means a corporation which is related or linked to

such institution or intermediary through common stockholders or such other

factors as may be determined by the Monetary Board. The supervising and/or

examining departments shall discharge their responsibilities in accordance with

the instructions of the Monetary Board.

"The department heads and the examiners of the supervising and/or examining

departments are hereby authorized to administer oaths to any director, officer,

or employee of any institution under their respective supervision or subject to

their examination and to compel the presentation of all books, documents, papers

or records necessary in their judgment to ascertain the facts relative to the

true condition of any institution as well as the books and records of persons

and entities relative to or in connection with the operations, activities or

transactions of the institution under examination."

"No restraining order or injunction shall be issued by the court enjoining

the Central Bank from examining any institution subject to supervision or

examination by the Central Bank, unless there is convincing proof that the

action of the Central Bank is plainly arbitrary and made in bad faith and the

petitioner or plaintiff files with the clerk or judge of the court in which the

action is pending a bond executed in favor of the Central Bank, in an amount to

be fixed by the court. The restraining order or injunction shall be refused or,

if granted, shall be dissolved upon filing by the Central Bank of a bond, which

shall be in the form of cash or Central Bank cashier's check, in an amount twice

the amount of the bond of the petitioner or plaintiff conditioned that it will

pay the damages which the petitioner or plaintiff may suffer by the refusal or

the dissolution of the injunction. The provisions of Rule 58 of the New Rules of

Court insofar as they are applicable and not inconsistent with the provisions of

this Section shall govern the issuance and dissolution of the restraining order

or injuction contemplated in this Section."

Section 4

SEC. 4. Section 27 of the same Act is hereby amended to read

as follows;

"SEC. 27. Prohibitions.—Personnel of the Central

Bank are hereby prohibited from:

Being an officer, director, employee, or stockholder, directly or

indirectly, of any institution subject to supervision or examination by the

Central Bank, except non-stock savings and loan associations and provident funds

organized exclusively for employees of the Central Bank, and except as otherwise

provided in this Act;

Receiving any gift or thing of value from any officer, director, or employee

thereof;

Revealing in any manner, except under order of the court, or under such

conditions as may be prescribed by the Monetary Board, information relating to

the condition or business of any such institution. This prohibition shall not be

held to apply to the giving of information to the Monetary Board or the Governor

of the Central Bank, or to any person authorized by either of them, in writing,

to receive such information.

"Notwithstanding the provisions of this Section and Section 8, members of the

Monetary Board and deputy-governors and other personnel of the Central Bank may

become directors of any institution subject to supervision or examination by the

Central Bank and of any entity related to such institution in connection with

financial assistance extended by the Central Bank to such institution and when

in the opinion of the Monetary Board it is appropriate to make such designation

to protect the interest of the Central Bank.

"Borrowing from any institution subject to supervision or examination by the

Central Bank by examiners and other personnel of the supervising and examining

departments of the Central Bank shall be prohibited only with respect to the

particular institution in which they are assigned, or are conducting an

examination: Provided, however, That any credit union or cooperative

composed of personnel of the supervising and examining departments of the

Central Bank may borrow any time from such institution, subject to Monetary

Board approval and provided that the loan is fully secured. Personnel

of other departments, offices, or units of the Central Bank shall likewise be

prohibited from borrowing from any financial institution during the period of

time that an application with the Central Bank of such institution is being

evaluated, processed, or acted upon by such personnel: Provided,

however, That the Monetary Board may, at its discretion, indicate the

position levels or functional groups to which the prohibition is applicable.

"Borrowing by all full-time Central Bank personnel from any institution

subject to supervision or examination by the Central Bank shall be fully

secured, fully disclosed to the Monetary Board, and shall be subject to such

further rules and regulations as the Monetary Board may

prescribed."

Section 5

SEC. 5. Section 28-A of the same Act is hereby amended to

read as follows:

"SEC. 28-A. Appointment of conservator.— Whenever,

on the basis of a report submitted by the appropriate supervising or examining

department, the Monetary Board finds that a bank or a non-bank financial

intermediary performing quasi-banking functions is in a state of continuing

inability or unwillingness to maintain a condition of solvency and liquidity

deemed adequate to protect the interest of depositors and creditors, the

Monetary Board may appoint a conservator to take charge of the assets,

liabilities, and the management of that institution, collect all monies and

debts due said institution and exercise all powers necessary to preserve the

assets of the institution, reorganize the management thereof, and restore its

viability. He shall have the power to overrule or revoke the actions of the

previous management and board of directors of the bank or non-bank financial

intermediary performing quasi-banking functions, any provision of law to the

contrary notwithstanding, and such other powers as the Monetary Board shall deem

necessary.

"As much as practicable, the conservator should not be connected with the

Central Bank but should be competent and knowledgeable in bank operations and

management. The remuneration of the conservator and other expenses attendant to

the conservatorship shall be borne by the bank or non-bank financial

intermediary performing quasi-banking functions concerned. He shall report and

be responsible to the Monetary Board until such time as the Monetary Board is

satisfied that the institution can continue to operate on its own and the

conservatorship is no longer necessary. The conservatorship shall likewise be

terminated should the Monetary Board, on the basis of the report of the

conservator or of its own findings, determine that the continuance in business

of the institution would involve probable loss to its depositors or creditors,

in which case the provision of Section 29 shall apply."

Section 6

SEC. 6. Section 29 of the same Act is hereby amended to read

as follows:

"SEC. 29. Proceedings upon insolvency.— Whenever,

upon examination by the head of the appropriate supervising or examining

department or his examiners or agents into the condition of any bank or non-bank

financial intermediary performing quasi-banking functions, it shall be disclosed

that the condition of the same is one of insolvency, or that its continuance in

business would involve probable loss to its depositors or creditors, it shall be

the duty of the department head concerned forthwith, in writing, to inform the

Monetary Board of the facts, and the Board may, upon rinding the statements of

the department head to be true, forbid the institution to do business in the

Philippines and shall designate an official of the Central Bank or a persons of

recognized competence in banking or finance, as receiver to immediately take

charge of its assets and liabilities, as expeditiously as possible collect and

gather all the assets and administer the same for the benefit of its creditors,

exercising all the powers necessary for these purposes including, but not

limited to, bringing suits and foreclosing mortgages in the name of the bank or

non-bank financial intermediary performing quasi-banking functions.

"The Monetary Board shall thereupon determine within sixty days whether the

institution may be reorganized or otherwise placed in such a condition so that

it may be permitted to resume business with safety to its depositors and

creditors and the general public and shall prescribe the conditions under which

such resumption of business shall take place as well as the time for fulfillment

of such conditions. In such case, the expenses and fees in the collection and

administration of the assets of the institution shall be determined by the Board

and shall be paid to the Central Bank out of the assets of such banking

institution.

"If the Monetary Board shall determine and confirm within the said period

that the bank or non-bank financial intermediary performing quasi-banking

functions is insolvent or cannot resume business with safety to its depositors,

creditors and the general public, it shall, if the public interest requires,

order its liquidation, indicate the manner of its liquidation and approve a

liquidation plan. The Central Bank shall, by the Solicitor

General, file a

petition in the Court of First Instance reciting the proceedings which have been

taken and praying the assistance of the court in the liquidation of such

institution. The court shall have jurisdiction in the same proceedings to

adjudicate disputed claims against the bank or non-bank financial intermediary

performing quasi-banking functions and enforce individual liabilities of the

stockholders and do all that is necessary to preserve the assets of such

institution and to implement the liquidation plan approved by the Monetary

Board. The Monetary Board shall designate an official of the Central Bank, or a

person of recognized competence in banking or finance, as liquidator who shall

take over the functions of the receiver previously appointed by the Monetary

Board under this Section. The liquidator shall, with all convenient speed,

convert the assets of the banking institution or non-bank financial intermediary

performing quasi-banking functions to money or sell, assign or otherwise dispose

of the same to creditors and other parties for the purpose of paying the debts

of such institution and he may, in the name of the bank or non-bank financial

intermediary performing quasi-banking functions, institute such actions as may

be necessary in the appropriate court to collect and recover accounts and assets

of such institution.

"The provisions of any law to the contrary notwithstanding, the actions of

the Monetary Board under this Section and the second paragraph of Section 34 of

this Act shall be final and executory, and can be set aside by the court only if

there is convincing proof that the action is plainly arbitrary and made in bad

faith. No restraining order or injunction shall be issued by the court enjoining

the Central Bank from implementing its actions under this Section and the second

paragraph of Section 34 of this Act, unless there is convincing proof that the

action of the Monetary Board is plainly arbitrary and made in bad faith and the

petitioner or plaintiff files with the clerk or judge of the court in which the

action is pending a bond executed in favor of the Central Bank, in an amount to

be fixed by the court. The restraining order or injunction shall be refused or,

if granted, shall be dissolved upon filing by the Central Bank of a bond, which

shall be in the form of cash or Central Bank cashier's check, in an amount twice

the amount of the bond of the petitioner or plaintiff conditioned that it will

pay the damages which the petitioner or plaintiff may suffer by the refusal or

the dissolution of the injunction. The provisions of Rule 58 of the New Rules of

Court insofar as they are applicable and not inconsistent with the provisions of

this Section shall govern the issuance and dissolution of the restraining order

or injunction contemplated in this Section.

"Insolvency, under this Act, shall be understood to mean the inability of a

bank or non-bank financial intermediary performing quasi-banking functions to

pay its liabilities as they fall due in the usual and ordinary course of

business: Provided, however, That this shall not include the inability

to pay of an otherwise non-insolvent bank or non-bank financial intermediary

performing quasi-banking functions caused by extraordinary demands induced by

financial panic commonly evidenced by a run on the bank or non-bank financial

intermediary performing quasi-banking functions in the banking or financial

community.

"The appointment of a conservator under Section 28-A of this Act or the

appointment of a receiver under this Section shall be vested exclusively with

the Monetary Board, the provision of any law, general or special, to the

contrary notwithstanding."

Section 7

SEC. 7. Section 31 of the same Act is hereby amended to read

as follows:

"SEC. 31. Disposition of fees and commissions.— All

costs and fees earned by the Central Bank in winding up the affairs and

administering the assets of any bank or non-bank financial intermediary

performing quasi-banking functions within the purview of this Act shall be used

to pay the salaries of the clerks and other employees whose employment is

rendered necessary in the discharge of the trust, together with other additional

expenses caused thereby. The balance of fees and costs earned, after the payment

of all expenses, shall be for the account of the Central Bank."

Section 8

SEC. 8. Section 32 of the same Act is hereby amended to read

as follows:

"SEC. 32. Refusal to make reports or permit

examination.—Any owner, agent, manager, or other officer-in-charge of any

institution subject to the supervision or examination by the Central Bank within

the purview of this Act who, being thereunto required in writing by the Monetary

Board or by the head of the appropriate supervising and examining department

shall wilfully refuse to file the required report or permit any lawful

examination into the affairs of such institution shall be punished by a fine of

not more than ten thousand pesos or by imprisonment for not more than one year,

or both, in the discretion of the court."

Section 9

SEC. 9. The second paragraph of Section 34 of the same Act

is hereby amended to read as follows:

"Whenever a bank or non-bank financial intermediary performing quasi-banking

functions persists in violating its charter or by-laws or any law, or orders,

instructions, rules or regulations issued by the Monetary Board, or whenever a

bank of non-bank financial intermediary performing quasi-banking functions

persists in carrying on its business in an unlawful or unsafe manner, the Board

may without prejudice to the penalties provided in the preceding

paragraph of this section and the administrative sanctions provided in

Section 10

SEC. 10. The first paragraph of Section 34-A of the same Act

is hereby amended to read as follows:

Section 11

SEC. 11. The first paragraph or Section 34-B of the same Act

is hereby amended to read as follows:

"SEC. 34-B. Administrative sanctions on non-bank

financial intermediaries performing quasi-banking functions.—The Monetary

Board is hereby authorized, at its discretion, to impose upon non-bank financial

intermediaries performing quasi-banking functions, their directors and/or

officers, for any willful delay in the submission of reports or publications

thereof as required by law, rules and regulations; any refusal to permit

examination into the affairs of the institution; any willful making of a false

statement to the Board or to the appropriate supervising or examining department

or its examiners; any willful failure or refusal to comply with, or violation

of, any law pertaining to non-bank financial intermediaries performing

quasi-banking functions or any order, institution or regulation issued by the

Monetary Board, or any order, instruction or ruling by the Governor; or any

commission of irregularities, the following administrative

sanctions:

Fines not in excess of five hundred pesos a day for each type of violation;

Suspension or, removal of directors and/or officers;

Suspension of access to Central Bank credit facilities; and/or

Suspension or, after due hearing, revocation of quasi-banking

license.

The Monetary Board may preventively suspend any director or officer of a

non-bank financial intermediary performing quasi-banking functions pending an

investigation whenever warranted by the circumstances as determined by the

Monetary Board. When the case against the director or officer under preventive

suspension is not finally decided by the Central Bank within a period of ninety

(90) days after the date of suspension, said director or officer shall be

reinstated: Provided, That when the delay in the disposition of the

case is due to the fault, negligence or petition of the director of officer, the

period of delay shall not be counted in computing the period of suspension

herein provided."

Section 12

SEC. 12. The third paragraph of Section 49 of the same Act

is hereby deleted and the second paragraph of the same Section is hereby amended

to read as follows:

"Any modification in the gold or dollar value of the peso must be in

conformity with the provisions of all executive and international agreements

subscribed to and ratified by the Republic of the Philippines, and such

modification shall be made only by the President of the Republic upon the

proposal of the Monetary Board. The proposal of the Monetary Board shall require

the concurrence of at least five of the members of the Board."

Section 13

SEC. 13. The second paragraph of Section 85 of the same Act

is hereby amended to read as follows:

"The Monetary Board may also require other persons and entities to report to

it currently all transactions or operations in gold, in any shape or form, and

in foreign exchange whether entered into or undertaken by them directly or

through agents, or to submit such data as may be required on operations or

activities giving the rise to or in connection with or relating to a gold or

foreign exchange transaction. The Monetary Board shall prescribe the forms on

which such declarations must be made. The accuracy of the declarations may be

verified by the Central Bank by whatever inspection it may deem

necessary."

Section 14

SEC. 14. Subsections A and B of Section 88 of the same Act

is hereby amended to read as follows:

"A. Under special circumstances in which the Monetary Board considers it

advisable to promote or facilitate the lending operations, or certain classes

thereof, of banking institutions engaged in long-term financing, the Central

Bank may grant loans or advances to said institutions against pledge or

assignment of payments, installments or amortizations of their borrowers. The

Monetary Board shall prescribe the loan value on applications for loans or

advances based on the payments, installments or amortizations pledged or

assigned: Provided, however, That the Central Bank shall finance said

loans from non-inflationary sources and shall establish additional safeguards as

it deems proper Provided, further, That such loans and advances may be

secured by other assets which are defined as acceptable security by a concurrent

vote of at least five members of the Monetary Board.

"In granting loans and advances under this subsection, the Central Bank shall

first ascertain that the payments, installments and amortizations to be pledged

or assigned to it are in no case currently in arrears and that said payments,

installments and amortizations are related to credit operations which in every

case are adequately secured by mortgages. Said mortgages shall be assigned to

the Central Bank."

"B. Under special circumstances, such as the encouragement of bank mergers

and consolidations or the rehabilitation of industries, in which the Monetary

Board considers it advisable to properly and effectively achieve the objectives

mentioned in Section 2 of this Act and to discharge its responsibility of

administering the banking system, the Central Bank may grant loans or advances

to the Development Bank of the Philippines or to any appropriate Government

financial institution under such terms and conditions as may be prescribed by

the Monetary Board which loans or advances shall be used by the Development Bank

of the Philippines or such Government financial institution to purchase shares

of stock of a banking institution or a distressed industrial establishment in

the Philippines for resale to the general public: Provided, however,

That the amounts of such loans and advances which may be released at any given

period of time shall be compatible with the requirements of stability:

Provided, further, That such loans and advances are secured by assets

which are defined as acceptable security by a concurrent vote of at least five

members of the Monetary Board.

"For the purpose of this subsection, the Development Bank of the Philippines

shall be authorized to underwrite, purchase, sell pledge, mortgage or otherwise

dispose of shares of stock of a banking institution or an industrial

establishment in the Philippines."

Section 15

SEC. 15. The same Act is hereby amended by adding a new

section after Section 88 thereof to read as follows:

'SEC. 88-A. The Central Bank may extend loans and advances

to banking institutions for a period of not more than seven (7) days without any

collateral for the purpose of providing the banking system with liquid funds in

times of need and influencing interest rate levels."

Section 16

SEC. 16. A new paragraph is hereby added after the second

paragraph of Section 90 of the same Act and the last paragraph of the same

Section is hereby amended, to read as follows:

"The Monetary Board may, with the concurrent vote of at least five of its

members, waive the collateral requirement under this Section and subsections A

and B of Section 88 for loans to banking institutions, majority of the capital

stock of which is owned by a Government financial institution: Provided,

however, That loans and advances to banking institutions controlled by a

Government financial institution shall be secured by a guarantee of such

Government financial institution.

"In connection with the exercise of these powers, the prohibitions in Section

133 of this Act shall not apply insofar as it refers to acceptance as collateral

of shares and their acquisition as a result of foreclosure proceedings,

including the exercise of voting rights pertaining to said shares: Provided,

however, That should the Central Bank acquire any of these shares it has

accepted as collateral as a result of foreclosure proceedings, the Central Bank

shall dispose of said shares to the public within one year from the date of

consolidation of title by the Central Bank."

Section 17

SEC. 17. The last paragraph of Section 100 of the same Act

is hereby amended to read as follows:

"The Monetary Board may exempt from reserve requirements deposits and deposit

substitutes with remaining maturities of two years or more, as well as

inter-bank borrowings."

Section 18

SEC. 18. Section 104 of the same Act is hereby amended to

read as follows:

"SEC. 104. Increase in reserve requirements.

—Whenever it becomes necessary, in the opinion of the Monetary Board, to

increase reserve requirements against existing liabilities, the increase shall

be made in a gradual manner and shall not exceed four percentage points in any

thirty-day period. Banks and other affected financial institutions shall be

notified reasonably in advance of the date on which such increase is to become

effective."

Section 19

SEC. 19. Section 105 of the same Act is hereby amended to

read as follows:

"SEC. 105. Computation on reserves.—The reserve

position of each bank or non-bank financial intermediary with quasi-banking

functions shall be calculated daily on the basis of the amount, at the close of

business for the day, of the institutions reserves and the amount of its

liability accounts against which reserves are required to be maintained.

"For the purpose of computing the reserve position of each bank or non-bank

financial intermediary with quasi-banking functions, its principal office in the

Philippines and all its branches and agencies located therein shall be

considered as a single unit."

Section 20

SEC. 20. Section 106 of the same Act is hereby amended to

read as follows:

"SEC. 106. Reserve deficiencies.—Whenever the

reserve position of any bank or non-bank financial intermediary performing

quasi-banking functions, computed in the manner specified, in the preceding

section of this Act, is below the required minimum, the bank or non-bank

financial intermediary performing quasi-banking functions shall pay the Central

Bank one-tenth of one per cent (1/10 of 1%) per day on the amount of the

deficiency: Provided, however, That banks and non-bank financial

intermediaries performing quasi-banking functions shall ordinarily be permitted

to offset any reserve deficiency occurring on one or more days of the week with

any excess reserves which they may hold on other days of the same week and shall

be required to pay the penalty only on the average daily deficiency during the

week. In cases of abuse, the Monetary Board may deny any bank or non-bank

financial intermediary performing quasi-banking functions the privilege of

offsetting reserve deficiencies in the aforesaid manner.

"If a bank or

non-bank financial intermediary performing quasi-banking functions chronically

has a reserve deficiency, the Monetary Board may limit or prohibit the making of

new loans or investments by the institution and may require that part or all of

the net profits of the institution be assigned to surplus.

"The Monetary Board may modify or set aside the reserve deficiency penalties

provided in this section, for part or the entire period of a strike or

lockout affecting a bank or a non-bank financial intermediary performing

quasi-banking functions as defined in the Labor Code, or of a national emergency

affecting operations of banks or non-banks financial intermediaries performing

quasi-banking functions."

Section 21

SEC. 21. Section 122 of the same Act is hereby amended to

read as follows:

"SEC. 122. Issue of Government Obligations.—The issue of

securities representing obligations of the Government, its political

subdivisions or instrumentalities, shall be made through the Central Bank, which

shall act as agent of, and for the account of, the Government or its respective

subdivisions or instrumentality, as the case may be: Provided, however,

That the Bank shall not guarantee the placement of said securities and

shall not subscribe to their issue except to replace its maturing holdings of

securities with the same type as the maturing securities."

Section 22

SEC. 22. Section 130 of the same Act is hereby amended to

read as follows:

"SEC. 130. Tax exemptions.─The provisions of any

general or special law to the contrary notwithstanding, the Central Bank of the

Philippines shall be exempt from all national, provincial, municipal and city

taxes, fees, charges and assessments now inforce or hereafter established.

"The exemptions authorized in the preceding paragraph of this section shall

apply to all property of the Central Bank, to the resources, receipts,

expenditures, profits and income of the Bank, as well as to all contracts,

deeds, documents and transactions related to the conduct of the business of the

Bank: Provided, however, That said exemptions shall apply only to such

taxes, fees, charges and assessments for which the Central Bank itself would

otherwise be liable, and shall not apply to taxes, fees, charges, or assessments

payable by persons or other entities doing business with the Central Bank:

Provided, finally, That foreign loans and other obligations of the

Central Bank shall be exempt both as to principal and interest, from any and all

taxes if the payment of such taxes has been assumed by the

Bank."

Section 23

SEC. 23. Section 131 of the same Act is hereby amended to

read as follows:

"SEC. 131. Exemption from customs duties.—The

provision of any general or special law to the contrary notwithstanding, the

importation and exportation by the Central Bank of notes and coins, and of gold

and other metals to be used for purposes authorized under this Act, and the

importation of all equipment needed for furnishing, equipping and operating the

offices of the Bank, shall be fully exempt from all customs duties and consular

fees and from all other taxes, assessments and charges related to such

importation or exportation."

Section 24

SEC. 24. All laws, acts, decrees, orders, instructions and

rules and regulations or parts thereof which are inconsistent herewith are

hereby revoked or modified accordingly.

Section 25

SEC. 25. This Decree shall take effect immediately.

Done in the City of Manila, this 16th day of January, in the year of Our

Lord, nineteen hundred and eighty-one.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JUAN C. TUVERA

Presidential Executive

Assistant

Vol. 25, Vital Documents, Presidential Decree 1980-1981

Section 34-A

Section 34-A of this Act take action under Section 29 of this

Act."

Section 6

SEC. 6. Section 30 of the same Act is hereby amended to read

as follows;

"SEC. 30. Distribution of assets.─ In case of

liquidation of a bank or non-bank financial intermediary performing

quasi-banking functions, after payment of the costs of the proceedings,

including reasonable expenses and fees of the Central Bank to be allowed by the

court, the Central Bank shall pay the debts of such institution, under order of

the Court in accordance with their legal priority."

Section 34-A Administrative sanctions on banks.

SEC. 34-A. Administrative sanctions on banks.—The

Monetary Board is hereby authorized at its discretion, to impose upon banking

institutions, their directors and/or officers, for any willful delay in the

submission of reports or publications thereof as required by law, rules and

regulations; any refusal to permit examination into the affairs of the

institution; any willful making of a false statement to the Board or the

appropriate supervising and examining department or its examiners; any willful

failure or refusal to comply with, or violation of, any banking law or any

order, instruction or regulation issued by the Monetary Board, or any order,

instruction or ruling by the Governor; or any commission of irregularities,

and/or conducting business in an unsafe or unsound manner as may be determined

by the Monetary Board, the following administrative sanctions:

Fines not in excess of five hundred pesos a day for each type of violation;

Suspension, or removal of directors and/or officers;

Suspension of rediscounting privileges;

Suspension of lending or foreign exchange operations or authority to accept

new deposits or make new investments;

Suspension of interbank clearing privileges; and/or

Suspension of authority to operate.

The Monetary Board may preventively suspend any bank director or officer

pending an investigation whenever warranted by the circumstances as determined

by the Monetary Board. When the case against the director or officer under

preventive suspension is not finally decided by the Central Bank within a period

of ninety (90) days after the date of suspension, said director or officer shall

be reinstated in his position. Provided, That when the delay in the

disposition of the case is due to the fault, negligence or petition of the

director or officer, the period of delay shall not be counted in computing the

period of suspension herein provided."