Loans and investments authorized.
Section 4
SEC. 4. Loans and investments authorized. — Said Amanah Bank is hereby authorized: to purchase or discount promissory notes, drafts and bills of exchange issued or drawn for agricultural, commercial or industrial purposes, with securities required by the Bank, or the proceeds of which have been used or are to be used for such purpose; to grant loans on or to discount notes secured by harvested and stored crops: Provided, That no loan on the security of such harvested and stored crops shall exceed eighty percent (80%) of the market value thereof on the date of the loan: Provided, further, That the crops so mortgaged shall be insured by the mortgagor for the benefit of the Amanah Bank for their entire market value: And provided, finally, That if, owing to circumstance whatever, the value of the crops given as security shall diminish, the mortgagor shall obligate himself to furnish further security or refund such part of the loan as the Bank may deem necessary. Such loans shall be granted for a period of not to exceed one year, subject to extension in the discretion of the Bank; to grant loans to agriculturists, on installments, for standing crops considered natural products of the Philippines such as rice, copra, sugar, tobacco, corn, etc., not exceeding seventy percent (70%) of the estimated value of such crops; Provided, however, That before granting such loans, the Amanah Bank may impose as a condition that cultivation be under supervision and/or require additional security in the nature of mortgages on real estate duly registered in the name of the debtor, or chattel mortgage, including those upon livestock, machinery and agricultural implements, or personal bonds with sufficient surety or sureties, satisfactory to the Bank; to grant loans to the several provincial, city and municipal governments and to any other branch or subdivision of the Republic of the Philippines on promissory notes guaranteed by the National Government, as shown by the endorsement thereon of the Secretary of Finance, approved by the President of the Philippines or to purchase bonds lawfully issued by such provincial, city and municipal governments and any other branches or subdivision of the Government of the Philippines; to grant loans to cooperative associations against the security of acceptable assets of the cooperative association and/or the individual members thereof; to grant loans to small farmers, merchants and traders against the security of lands without Torrens title, where the owner of private property can show five years or more of peaceful, continuous and uninterrupted possession in the concept of the owner; or of portions of friar land estates or other lands administered by the Bureau of Lands that are covered by sales contracts and the purchasers have paid at least five years installment thereon, without the necessity of prior approval and consent of the Land Authority or corresponding governmental agency; or of homesteads of free patent lands pending the issuance of titles but already approved, the provisions of any law or regulations to the contrary notwithstanding: Provided, That when the corresponding titles are issued the same shall be delivered to the register of deeds of the province where such lands are situated for the annotation of the encumbrance: Provided, further, That in the case of lands pending homestead or free patent titles, copies of notices for the presentation of the final proof shall also be furnished the Bank and, if the borrower applicants fail to present the final proof within thirty days from the date of notice, the Bank may do so for them at their expense: Provided, finally, That the applicant for homestead or free patent has already made improvements on the land and the loan applied for is to be used for further development of the same or for other productive economic activities; to grant loans to employees in the government service or in private industry to acquire stocks in corporations or industries in an amount not exceeding one month's salary for every year of service, against the security of the undertaking of the employee with notice upon the employer for the repayment thereof by monthly payroll deductions within a period of five years; to augment and supplement the capital of the Amanah Bank, the Development Bank of the Philippines, the Philippine National Bank and other government financial institutions shall be permitted to extend loans to the Bank from time to time repayable in an amortization period and at interest rates that may be agreed upon against security which may be offered by the Amanah Bank or any stockholders of the Bank that: 1) the said government financial institutions are convinced that the resources of the Amanah Bank are inadequate to meet the legitimate credit requirements of the locality wherein the Bank is established; 2) there is dearth of private capital in the said locality; and 3) it is not possible for the private stockholders to increase the paid-up capital thereof; the Bank with the approval of the Monetary Board may rediscount paper with the Central Bank, the Philippine National Bank or other banks and their branches or agencies. The Central Bank shall specify the nature of papers deemed acceptable for rediscounting and the rate to be charged by any such institutions; generally, to make advances or discount paper for agricultural, manufacturing, industrial, or commercial purposes: Provided, That seventy-five percent (75%) of the loanable funds of the Bank shall be invested in medium and long-term loans for economic development purposes and in no case shall the Bank invest more than twenty five percent (25%) of its loanable funds in short term loans for miscellaneous purposes: Provided, however, That twenty five (25%) percent of the loanable funds for short term loans may be loaned on securities other than real estate mortgage.