Republic Act No. 4093
Section
1
This Act shall be known as “The Private Development Banks’ Act”
Section
2
It shall be the declared policy of Congress
to promote and expand the economy of the country pursuant to the socio-economic
program of the Government; to expand the industrial and agricultural growth;
and to encourage the establishment of more private development banks in order
to meet the needs for capital and to meet the demands for adequate investment
credit or medium and long term loans for Filipino entrepreneurs. Toward this
end, the Government shall encourage and assist in the establishment of a system
of private development banks which will promote agriculture and industry and at
the same time place within easy reach to the people the medium and long term
credit facilities at reasonable cost. The Development Bank of the Philippines,
the Philippine National Bank, the Government Service Insurance System, the
Social Security System, the National Economic Council, the Department of
Agriculture and Natural Resources, the Department of Commerce and Industry, and
other appropriate agencies, corporations, or instrumentalities of the
Government may, in cooperation with the private development banks, provide
adequate assistance in the form of saving deposits, and technical know-how in
agriculture and industry.
Section
3
A private development bank shall be
incorporated under the provisions of the General Banking Act for mortgage banks
and shall exercise all the powers and shall assume all the obligations of a
shortage bank as defined in the said Act, except as otherwise provided herein:
Provided, That no private development bank shall be operated without a
certificate of authority from the monetary board of the Central bank which
shall be issued upon compliance with the provisions of this law.
Section
4
A private development bank shall be
organized in the form of a stock corporation and its paid-up capital shall not
be less than four million pesos for class A, two million pesos for class B, and
one million pesos for class C: Provided, That at least sixty per cent of the
capital stock subscribed by the private sector shall be owned and held by
citizens of the Philippines: Provided, Further, That if said subscription of
private shareholders to the capital stock of a private development bank cannot
be secured or is not available, the Development Bank of the Philippines on
representation of the said private shareholders and with the approval of its
Board of Governors shall, within thirty days from the date of approval by the
Board of Governors, and after compliance by the private stockholders with the
conditions of said approval, subscribe to the capital stock of such development
banks, which shall be paid in full at the time of subscription out of the trust
fund provided in paragraph 3, Section 3 of Republic Act Numbered Two thousand
eighty-one, in an amount equal to the difference between the required paid-up
capital and to the fully paid subscribed capital of the private stockholders
but not exceeding the latter: Provided, furthermore, That the Board of
Governors shall act on the representation made by the private shareholders
within thirty days from the date it is filed: Provided, still further, That
such shares of stock subscribed by the bank shall be preferred shares entitled
to cumulate dividends at a rate of one per cent during the first five years,
two per cent during the following five years, and three per cent thereafter,
shall be preferred as against common and other preferred stockholders in the
distribution of assets in the event of liquidation, and shall be entitled to
voting privileges: Provided, Finally, That such preferred shares of the bank
may be sold at any time at par to private individuals who are citizens of the
Philippines, and in the sale thereof the qualified registered stockholders
shall have the right of preemption within one year from the date of offer in
proportion to their respective holdings, but in the absence of such buyers,
preference shall be given to residents of the province or city where the
development bank is located. All members of the board of directors of the
private development bank shall be citizens of the Philippines.
Section
5
Seventy-five per centum of the loanable
funds of the private development 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 per centum of the loanable funds in short term loans for
miscellaneous purposes.
Section
6
For the purpose of attaining the objectives
of this Act and the policy of Congress as provided for in Section 2 of this
Act, the sum of ten million pesos may be appropriated yearly in case of need
from the net profit of the Central Bank paid into the general fund of the
government under Section Forty-one, Paragraph (d) of the Central Bank Act,
which sum shall constitute a revolving fund to be made available to the
Development Bank of the Philippines which shall be used, together with the funds
already provided under paragraph 2 of Section 3 of Republic Act 2081, for the
following purposes:
(a) To
pay for its subscription to preferred shares of stock in said private
development banks in the manner and subject to the terms and conditions prescribed
in Section four hereof;
(b) To
rediscount promissory notes and other credit instruments held by the private
development bank under the following conditions and limitations:
(1) It
shall charge such rediscount or interest rates as it may determine taking into
account that the main objective of the private development bank is to engage in
medium and long term loans for economic development. The determination of such
rediscount or interest rates acceptable to the bank for the purpose of this
provision shall be made by the said bank upon or immediately after the
commencement of operations of a private development bank; and
(2) Funds
so acquired shall be used only to finance the establishment and operation of
projects within the development program of the National Economic Council or
along such projects and activities as the National Economic Council may, from
time to time, approve.
Section
7
Any private development bank may, with the
approval of the Monetary Board:
(a) Accept
savings and time deposits;
(b) Act
as correspondent for other financial institution and as collection agent
whenever there is no rural or commercial bank existing in the locality;
(c) Rediscount
paper with the Central Bank, Philippine National Bank or other Banks and their
branches or agencies. The Central bank shall specify the nature of papers
deemed acceptable for rediscount as well as the rediscount rate to be charged
by any of these institutions.
Section
8
To augment and supplement the capital of
any private development bank, the Development Bank of the Philippines shall be
permitted to extend to the private development banks a loan or loans from time
to time repayable in ten years with interest at the rate that may be agreed
upon against security which may be offered by the private development bank or
any stockholders of the private development bank: Provided, That
(a) The
Development Bank of the Philippines is convinced that the resources of the
private development bank are inadequate to meet the legitimate credit
requirements of the locality wherein the private development bank is
established;
(b) There
is a dearth of private capital in the said locality;
(c) It
is not possible for the stockholders of the private development bank to
increase the paid-up capital thereof.
Section
9
In an emergency or when a financial crisis
is imminent, the Central Bank may give a loan to any private development bank
against the assets of the private development bank which may be considered
acceptable by a concurrent vote of the members of the Monetary Board.
Section
10
All existing private development banks
shall be totally exempted from the payment of income and gross receipts taxes
for a period of three (3) years after the effectivity of this Act. Thereafter,
they shall be taxed on a gradually increasing basis of twenty-five percent
(25%) per year for the next succeeding four (4) years after the end of which
period they shall pay all taxes in full. Those banks that may be established
within three (3) years from the date of effectivity of this Act, shall be totally
exempted from income and gross receipts taxes for three years from the date of
their organization. Thereafter they shall be taxed on a gradually increasing
basis of twenty-five per cent (25%) per year for the next succeeding four (4)
years after the end of which period they shall pay all such taxes in full.
Section
11
Private development banks organized under
this Act shall be known by any name not otherwise appropriated: Provided,
However, That the words “Development Bank” is made a part thereof, and the name
is approved by the Securities and Exchange Commission.
A private development bank may establish
branches and agencies subject to the approval of the Monetary Board of the
Central bank. For the purpose of this Act, a private development bank, together
with its branches and agencies, shall be considered as a unit.
Section
12
Every individual acting as officer or
employee of a private development bank and handling fund or securities
amounting to one thousand pesos or more, in any one year, shall be covered by
an adequate bond as determined by the Monetary Board; and the by-laws of the
private development bank may also provide for the bonding of other employees or
officers thereof.
Section
13
For the purpose of carrying out the
objectives of this Act, the Development Bank of the Philippines is authorized
to require the services and facilities of any Department or instrumentality of
the Government or any officer or employee of any such Department or government
instrumentality.
Section
14
A fine of not more than two thousand pesos
or imprisonment for not more than one year or both, at the discretion of the
court, shall be imposed upon:
1. Any
officer, employee or agent of private development bank who shall:
(a) Make
false entries in any bank report or statement thereby affecting the financial
interest or causing damage to, the Bank or any person; or
(b) Without
order of court of competent jurisdiction, disclose any information relative to
the funds or properties in the custody of the bank belonging to private
individuals, corporation or any other entity; or
(c) Accept
gifts, fees, or commission or any other form of remuneration in connection with
the approval of a loan from said bank; or
(d) Overvalue
or aid in overvaluing any security for the purpose of influencing in any way
the action of the Bank or any loan; or
(e) Appear
and sign as guarantor, indorser or surety for loans granted by the bank; and
2. Any
application for a loan from or borrower of a private development bank who
shall;
(a) Misuse,
misapply, or divert the proceeds of the loan obtained by him from its declared
purpose; or
(b) Fraudulently
overvalue property offered as security for a loan from the said bank; or
(c) Give
out or furnish false or willful misrepresentation of material facts for the
purpose of obtaining, renewing or increasing a loan extending the period
thereof; or
(d) Attempt
to defraud the said bank in the event of court action to recover a loan; or
(e) Offer
any officer, employee or agent of a private development bank a gift, fee,
commission, of other form of compensation in order to influence such bank
personnel into approving a loan application; or
(f) Dispose
or encumber the property or the crops offered as security for the loan.
3. Any
examiner, or officer, or employee of the Central Bank of the Philippines or any
department, bureau, office, branch or agency of the Government who is assigned
to examine, supervise, assist or render technical service to private
development bank and who shall commit any of the acts, enumerated in paragraph
(1) of this section or connive or aid in the commission of the same.
Section
15
The Development Bank of the Philippines
shall submit a report to Congress as of the end of each calendar year of all
its actuations in connection with private development banks, together with an
explanation or its reasons therefor.
Section
16
Any Bank not organized under this Act
except those organized under Republic Act 2081 and any person, association, or
corporation doing the business of banking, not authorized under this Act who shall
use the words “Development Bank” as part of the name or title of such bank or
of such person, association or corporation, shall be punished by a fine of not
less than fifty pesos for each day during which said words are so used.
Section
17
If any provision or section of this Act or
the application thereof to any person, association or circumstances is held
invalid, the other pertinent provisions or associations, or circumstances shall
not be affected thereby.
Section
18
The provision of Republic Act Numbered Two
hundred sixty-five, as amended, Republic Act Numbered Three hundred and
thirty-seven, as amended and Republic Act Numbered Two thousand eighty-one as
amended, insofar as they are applicable to, and not in conflict with any
provision of this Act are hereby made parts hereof; and certain provisions of
Republic Act Numbered Two thousand and eighty-one, as amended, governing
private development bank and in conflict with any provision of this Act are
hereby repealed.
Section
19
This Act shall take effect upon its
approval.
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