ESTABLISHING A PROCEDURE FOR ACQUISITION BY SMALL FARMERS OF EQUITY IN RURAL BANKS.

• Number: Presidential Decree No. 584
• Sections: 5

Preamble

WHEREAS, rural banks have been established primarily to meet

the normal credit needs of people living in the rural areas,

particularly the small farmers;

WHEREAS, in order to give these small farmers the

opportunity and privilege of self-development, social growth, and

economic independence under a truly just and democratic society, the

Samahang Nayons have been organized with certain rights and privileges;

WHEREAS, it is fitting that these small farmers, either

directly or through their Samahang Nayon, be further encouraged to

invest in the equities of rural banks with which they are closely and

directly involved;

WHEREAS, diffusion of ownership of equity in rural banks

will further ensure sound operation and progress of such rural banks;

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

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

do hereby decree and order, as follows:

Section 1

SECTION 1. The provisions of existing law or regulation to

the contrary notwithstanding, a rural bank shall make available for sale

to farmers who are clients of the bank and who are members of a

Samahang Nayon or to any Samahang Nayon of which said farmers are

members, common shares of stock of the rural bank representing in the

aggregate up to forty per cent (40%) of the voting stock of the bank, at

a price to be agreed upon between the parties: Provided, That,

where no agreement is reached on the price, the matter shall be

submitted to the Central Bank of the Philippines for determination:

Provided, further, That, the aforementioned acquisitions of shares

of stock in rural banks shall be subject to the limitations on

individual, family group, or corporate holdings established under

Section 2

SEC. 2. The Central Bank of the Philippines shall prescribe

such rules and regulations necessary to carry out the provisions hereof.

Section 3

SEC. 3. This Decree shall take effect immediately.

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

of Our Lord, nineteen hundred and seventy-four.

(Sgd.)

FERDINAND E. MARCOS

President of the Philippines

By the President:

(Sgd.)

ALEJANDRO MELCHOR

Executive Secretary

Section 12

Section 12 of Republic Act No. 337, as amended.