Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
BANKNGLAWSAND JURSPRUDENCE
FROMSECTION2S
AY2011-2012
Topic Page
Chapter 1- Banks and Business oI Banking
Chapter 2 - Organization, Management, Administration OI Banks
Chapter 3 - Deposit Functions OI Banks
Chapter 4 - Investments, Loans and Other Bank Functions
Chapter 5 - Prohibited Transactions and Cessation OI Banking Business
Chapter 6 - Foreign Banks and Trust Operations
MIDTERM COVERAGE: Chapter 1 - 6
Chapter 7 - The Banko Sentral ng Pilipinas
Chapter 8- Currency, Monetary Stabilization and Functions oI BSP
Chapter 9 - Unclaimed Balances and Trust Receipts
Chapter 10 - Deposit Insurance
Chapter 11 - Anti-Money Laundering
Chapter 12 Special Purpose Vehicle
FINALS COVERAGE: Chapter 7 - 12
2
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
1. Debtor-Creditor Relationship
It is a contract oI loan and not deposit
Contract between bank and depositor is
governed by the provisions oI the NCC on
simple loan (Consolidated Bank and Trust
Corp vs. CA)
2. Fiduciary dut y
Fiduciary relationship bank`s obligation
to observe high standard oI integrity and
perIormance (Phil. Banking Corp. vs. CA)
3. Not a trust agreement
It is not a trust agreement and Iailure to
pay a loan is not a breach oI trust
It is not a trust agreement because banks
do not accept deposits to enrich depositors
but to earn Ior themselves
4. Indispensable Institution
Has a vital role in economic liIe
SigniIicance oI banking institution to
commercial transactions (Metropolitan
Bank & Trust Co. vs. Cabil:o)
5. Impressed with public interest
Has public interest because people depend
on the honesty and eIIiciency oI banks
Stability oI banks largel y depends on the
conIidence oI the people in the honest y
and eIIiciency oI banks.
6. Degree oI diligence
Diligence higher than that oI a good Iather.
It must be extraordinary diligence
In Simex International vs. CA, the bank is
under obligation to treat the accounts oI its
depositors with meticulous care and
always have in mind the Iiduciary nature
oI banks
Not enough that he exerted reasonable
diligence to ascertain the saIety oI his
clients
Such diligence is only required in its
Iiduciary relationship with its depositors
and not to other transactions such as sale
oI Ioreign exchange demand draIt
Sec 2 oI GBL prescribes the statutory
diligence required Irom banks 'high
standards oI integrity and perIormance in
serving its depositors.
Diligence required oI banks is more than
that oI a good Iather (PBCom vs. CA)
Diligence extends to Iinancial institutions
(e.g. GSIS)
7. Treatment oI accounts with meticulous care
Must treat every account with utmost
Iidelity regardless oI amount
There is no law mandating banks to call
up their clients whenever a signiIicant
amount shall be withdrawn Irom their
account
8. Duty to keep records
9. Banks are not gratuitous bailees
10. Banks not expected to be inIallible
However, they must bear the loss Ior not
discovering mistakes iI there are
established procedures not Iollowed
11. Dealing with registered lands
General Rule: mortgagee can rely on title
and does not need to investigate Iurther
Exception: mortgagee cannot close his
eyes to Iacts which should put a
reasonable man on his guard, and yet
claim that he is in good Iaith
With banking institutions, mere reliance
on the title is not enough as they need to
investigate also
Doctrine oI the 'mortgagee in good Iaith
all persons dealing with property
covered by the Torrens CertiIicates oI
Title are not required to go beyond what
appears on the Iace oI the title. (Cavite
Development Bank vs. Spouses Lim)
3
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Moral damages
Gen. Rule a corporation is not entitled
to moral damages
Exception when its good reputation is
besmirched by breach oI Iiduciary duty.
In culpa contractual recoverable iI
there is Iraud or bad Iaith
Depositor may recover even iI bank`s
negligence not attended by bad Iaith iI he
suIIered mental anguish, serious anxiet y,
etc.
6. Respondeat superior oI employees
Command responsibilit y
A bank is bound by the negligence oI its
employees
Bank name
Organization oI Banks
Stockholdings
1. Treasury Stocks
GBL provides that NO bank shall:
Bank licensing process shall incorporate
i. Purchase or acquire shares oI its
assessment oI: own capital stock
1. Banks` ownership structure
2. Director management
3. Operating plan
4. Internal controls
5. Projected Iinancial condition
Capital requirements:
Board oI Directors
ATMs
Independent Auditor
Financial Statements
Settlement oI Disputes
Kinds of Deposits
1. Demand deposits
1.c. Checks
2. Savings Deposits
2.b. Withdrawals
4. Time Deposits
dministration of Deposits
Survivorship greement
1. Commercial bank
2. Investment house
3. Invest in non-allied enterprises
Minimum Ratio
EIIect oI Non-compliance
Violations
Inclusion to Limit
Exclusion to limit
Assignment oI Credits
EIIect oI violation
Limit on loans
Exception
Legal compensation
Policy
Disclosure
DeIinition
Penalties
EIIect oI violation
Exemption oI government
Exempted transactions
Procedure
Writ oI possessi on
X. Major investments
General policy
DeIinition oI terms
Minimum requirements
InIormation to be disclosed
DeIerral charges
ConIidentiality iI inIormation
OIIset
Handling oI complaints
Contract oI adhesion
Mode oI payment
I. Prohibited Transactions
Prohibited acts
No director shall:
1. Make Ialse entries in any bank report
2. Without order oI court, disclose to an
unauthorized persons an inIormation
relative to Iunds or properties in custody
oI customers
3. Accept giIts, Iees or commission in
connection Ior approval oI loan
4. Overvalue a security Ior purpose oI
inIluencing actions oI bank
5. Outsource inherent banking Iunctions
W This is to ensure secrecy oI bank
deposits
No borrow shall
1. Fraudulently overvalue security Ior loan
2. Furnish Ialse material Iacts to obtain or
increase loan
3. Attempt to deIraud bank in event oI court
action to recover loan
4. OIIer any DOE any giIt, Iee, commission
to inIluence person to approve loan
No examiner, oIIicer or employee oI BSP assigned
to supervise, examiner rendering technical
assistance to bank shall commit the Ioregoing acts
No bank shall employ causal or non-regular
personnel or too lengthy probationary personnel in
business involving bank deposits
QualiIication oI conservator
Remuneration
Expenses oI conservatorship
Terminations oI conservatorship
Voluntary liquidation
2. Procedure
3. Prohibited acts
EIIects oI receivership
4. Stay oI execution
28
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Liabilities
I. Foreign Banks
Laws applicable
Minimum capitalization
31
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Bond requirement
Money oI government
QUIZZES:
True or False:
1. The Iiduciary nature oI the relationship oI a
depositor with the depositary bank imposes on the
latter the obligation to discharge the highest
standard oI trust and integrity and a violation
thereoI is considered a breach oI trust. False
Summary oI Laws
35
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Chapter 1
BP 68 Corporation code
Chapter 2
Chapter 3
Chapter 4
Chapter 6
OD BLESS N TE MDTERMS!!!
36
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Power to prosecute
Estoppel
Vacancies
QualiIication oI members oI MB
DisqualiIication oI MB members
Scope oI authority oI MB
Responsibility oI Members oI MB
Emergencies (CRM)
V. Operations oI BSP
Contracting Loans
41
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Frequency oI examination
Service Fees
VIII. Administration
Signature oI statements
Fiscal Year
The Auditor
Penalty 100k-200k
The Peso
DeIinition oI Currency
Value oI Currency
International Reserves
Means oI Action
Whenever:
1. International reserve Ialls to a level
inadequate to meet prospective net
demands Ior Ioreign currencies
Purchases and sales oI gold
In order to:
1. Achieve primary objective (price stability)
2. Protect international reserves
3. And in time oI national emergency, give
MB time to takes constructive measures to
Iorestall or combat crisis
The MB with concurrency oI 5 members and with
approval oI President may:
1. Temporary suspend or restrict sale oI
exchange
2. Subject all transactions in gold and
FOREX to license
3. Require FOREX obtained by anyone be
delivered to BSP at eIIective exchange
rate. Foreign currency deposits RA 6426
(Foreign Currency Deposit System) shall
be exempted
Guiding Principles
When Granted
Limits
First Tranche
Amount oI 1
st
tranche shall be limited to 25 oI
total deposit and deposit substitute oI bank and
secured by government securities
Amount oI Iirst tranche may exceed 25 iI it is
adequately secured by government securities and
unencumbered Iirst class collaterals
Prior to release oI Iirst tranche, bank shall submit
resolution oI its board oI directors authorizing
BSP to evaluate their assets to determine that it is
good Ior collateral
Second Tranche
Shares Collateral
OverdraIt
Endorsement
Repayment oI Credits
Other Requirements
Prohibitions
Reserve Requirement
Computation oI Reserves
Reserve DeIiciencies
Interbank Settlement
Guiding Principle
Portfolio Ceilings
OIIicial Deposits
Fiscal operations
53
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
XVII. Privileges
Tax Exemptions
Implementing Details
Mandate to Organize
Separation BeneIits
TransIer oI Powers
I. Unclaimed Balances
DeIinitions
Procedure
Penalties
ReclassiIication
DeIinition oI Terms
3. Undertaking oI entrustee
4. To hold in trust, sell or return Ior the
entruster the goods, documents or
instruments
May contain other terms not contrary to TRL or
laws
Rights oI Entruster
Obligations oI Entrustee
Violation oI TRL
60
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Application
Penalt y
I. Roles oI PDIC
Composition
Quorum
Per Diem
IV. OIIicers
President
Vice President
Bank Examiners
Claim Agents
Investigators
Deposit Liabilities
VI. Assessment
Assessment Rule
PDIC may:
4 ReIund to an insured bank any payment oI
assessment that is excess oI amount due
4 Credit such expense toward payment oI
assessment oI next Iollowing period
Termination
Trust Fund
Civil Penalities
XIII. Receivership
Appointment
EIIect oI receivership
Distribution oI Assets
Manner oI Payment
ProoI oI Claims
Notice
Discharge
Recognition oI Owner
Withholding oI Payment
Prescription
XVII. Borrowings
XX. Miscellaneous
Signs
XXII. Fines
Reorganization
PDIC vs. CA
Policies
Covered Institutions
1. Banks, non-banks, quasi-banks, trust entities and
subsidiaries and those regulated by BSP
2. Insurance companies
3. Securities dealers, brokers, salesmen and
investment houses
4. Mutual Iunds, closed-end-investment companies
5. Foreign exchange corporations, money chargers
6. Other entities dealing in currency, commodities or
Iinancial derivatives
Monetary Instrument
UnlawIul Activit y
How is ML committed
Jurisdiction oI ML Cases
Prosecution oI ML
Functions
Customer IdentiIication
Record Keeping
First Issue
Second Issue
VI. ForIeiture
Civil ForIeiture
Authentication oI Documents
Extradition
VIII. Penalties
Breach oI ConIidentiality
B. DeIinitions
Act - Special Purpose Vehicle Act oI 2002
Appropriate Regulatory Authority -
agency/authority having jurisdiction over the FI's
operations, which shall be the Iollowing
Department oI Finance (DOF) - in case oI the
PDIC and GOCCs, in consultation with other
agencies that have primary jurisdiction over the
said FIs whenever deemed appropriate by the DOF
Bangko Sentral ng Pilipinas (BSP) - in the case oI
banks which include LBP and DBP, and trust and
QB Iunctions oI Iinancing companies and
investment houses licensed by the BSP
Commission - in case oI Iinancing companies and
investment houses, except their trust and QB
Iunctions or any qualiIied entity not under the
DOF or BSP
Audited Financial Statements - a set oI Iinancial
reports consisting oI balance sheet, income
statement, statement oI changes in equity and cash
Ilow statement, audited by a Commission-
accredited independent CPA
CertiIicate oI Eligibility or COE - certiIicate
issued by the Appropriate Regulatory Authority as
to the eligibility oI the NPL or ROPOA Ior
purposes oI availing oI the tax exemptions and
privileges
Code - BP 68 aka the Corporation Code oI the
Philippines
Commission - Securities and Exchange
Commission
Dation in Payment (dacion en pago) - a payment
whereby property, whether real or personal,
tangible or intangible, is alienated in Iavor oI the
creditor, which could either be an FI or an SPV in
satisIaction oI an NPL
FIA - Foreign Investment Act, RA 7042
FI or Financial Institutions - credit granting
institutions which shall be limited to the Iollowing
1. the BSP
2. a bank as deIined under RA 8791, aka
'The General Banking Law
3. a Iinancing company as deIined under RA
8556 aka 'The Financing Company Act oI
1998
4. an IH as deIined in PD 129 aka 'The
Investment Houses Law
5. Government Financial Institutions or GFIs,
shall be limited to the PDIC, LBP and
DBP
6. GOCCs
7. other institutions licensed by the BSP to
perIorm QB
Investment Unit Instruments or IUIs - participation
certiIicates, debt instruments or similar
instruments issued by the SPV and subscribed by
the Permitted Investors
4 It shall not include the instruments to be
issued by the SPV to the selling FIs
4 SPV shall not be considered as deposit
substitutes and shall not Iorm part oI the
capital stock oI SPV
Non-Bank Financial Institutions perIorming QB
Iunctions or NBQBs - Iinancing companies, IH,
and other institutions licensed by the BSP to
perIorm QB Iunctions
Non-PerIorming Assets or NPA - consists oI NPLs
and ROPOAs by the F.I.s, certiIied to be eligible
as such ARA
Non-PerIorming Loans or NPLs - loans and
receivables such as mortgage loans, unsecured
loans, etc, whose principal and/or interest has
remained unpaid Ior at least 180 days aIter they
have become past due or any oI the events oI
deIault under the loan agreement has occurred as
oI June 30, 2002
ROPOA - Real and other properties owned or
acquitted by an FI in settlement oI loans an
receivables which have been acquired by way oI
Dacion en pago or judicial or extra judicial
Ioreclosure or execution oI judgment as oI June 30
2002 PROVIDED, the property is deemed
acquired
1. on the date oI notarization oI the Deed oI
Dacion
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S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
D. Powers oI an SPV
An SPV shall be incorporated primarily to invest
in, or acquire NPAs oI F.I.s.
Secondary powers
1. Engage in 3rd parties to manage, operate, collect
and dispose oI NPAs acquired Irom an FI
2. Rent lease, hire, pledge, mortgage, transIer, sell,
exchange, usuIruct, secure, securitize, collect rents
and proIits and other similar acts concerning its
NPAs acquired Irom FIs
3. In case oI NPLs, to restructure debt, condone debt
and undertake other restructuring related activities
4. Take, transIer shares or buy shares issued by the
borrower Ior the purpose oI business
reorganization or rehabilitation oI the borrower
5. Enter into dation in payment, Ioreclose judicially
or extrajudicially and other Iorms oI debt
settlement involving NPLs
6. Spend Iunds to renovate, improve, complete or
alter its NPAs acquired Irom an FI
7. Issue equity or participation certiIicates
8. Borrow money and issue other instruments oIr
paying operational and administrative costs
9. Guarantee credit, accept or intervene Ior honor the
bills oI the borrowers
10. Advance Iunds to borrowers where required by an
acquired asset or any debt
11. Entrust to 3rd parties asset servicing company, the
collection and receipt oI debt payments Ior debts
under restructuring or business reorganization
H. Approval
Upon approval oI the SPV Plan, the Commission
shall issue an Approval CertiIicate stating that the
application has been approved and the IUIs may
be issued
I. Issuance oI IUIs
Registration Requirements
1. All IUIs proposed to be sold or distributed
within the Philippines shall be duly
registered with the SEC
2. Registration statement including:
1. business oI the issuer
2. use oI proceeds
3. risk Iactors
4. legal proceedings
5. market oI securities
6. management's discussion oI
Iinancial condition and results oI
operations
7. directors and oIIicers
8. securities ownership
9. certain related party transactions
10. audited and interim Iinancial
statements in accordance with
SRC rule 68
3. In addition, the II inIormation shall be
disclosed in the registration statements oI
an SPV
a. details oI the SPV plan
b. details oI credit enhancements
c. detailed description oI the assets
or loan constituting the pools oI
assets
d. rights and obligations oI the
selling FI assumed by the SPV
e. description oI any relationship or
interest oI the selling FI parent
I. Incentives and exemption
privileges
4. The SPV shall also submit a certiIication
Irom the FI that the aIIected borrowers oI
the NPLs and all persons holding prior
encumbrances upon the assets
5. SPV shall pay a registration Iee oI 1/10 oI
1 oI the aggregate oIIering price oI the
IUIs subject to the diminishing Iee set by
the Commission
6. SPV shall cause the publication oI a notice
oI Iiling oI registration statement its
expense
7. The Commission may audit the Iinancial
statements, assets and other inIormation oI
an SPV applying Ior registration
8. Upon the registration statement being
declared eIIective by the Commission, the
sale oI the securities subject thereto shall
be commence within 2 business days and
be counted until the end oI the oIIering
period or until the sale has been
terminated by the action oI the issuer
9. The SPV shall ensure wide dissemination
oI preliminary and Iinal prospectuses
10. Written notiIication shall be given to the
SEC within 3 business days Irom
completion or termination oI the oIIering
by the issuer, including therein the number
oI securities sold
Amendments or Rejection
Within 45 days aIter the date oI Iiling oI the
registration statement, or at such later date to
which the issuer has consented, the SEC shall
declare the registration statement eIIective or
rejected
UNLESS the applicant is allowed to amend the
registration statement
AIter which, the SEC shall determine iI it should
be eIIective or rejected
The SEC may reject an RS and reIuse registration
thereunder or revoke the eIIectivity oI an RS and
the registration oI the security thereunder aIter due
notice and hearing by issuing an order to such
eIIect, setting Iorth its Iindings in respect thereto iI
its Iinds that:
The issuer:
1. has been judicially declared insol vent
2. violated any provision oI the Corporation
Code as well as orders oI the SEC
3. has been or engaged or is about to engage
in Iraudulent transactions
4. he has made any Ialse or misleading
representation oI material Iacts in any
prospectus concerning the issuer or its
securities
5. has Iailed to comply with any requirement
that the SEC ma impose as a condition Ior
registration oI the securit y Ior which the
registration statement has been Iiled
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S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
J. Permitted Investors
May acquire or hold IUIs oI an SPV in the
minimum amount oI 10Mphp provided:
1. that an SPV shall not be authorized to
acquire the IUIs oI another SPV
2. that the Parent, Subsidiaries, AIIiliates or
DOSRI shall not acquire, hold, directly or
indirectly, the IUIs oI the SPV that
acquired the NPAs oI the FI
AIIiliate - a juridical person, directly or indirectly,
thru one or more intermediaries, is controlled by
or is under common control with selling FI or its
aIIiliates
Control - exists when the Parent owns directly or
indirectly thru subsidiaries more than one halI oI
the voting power oI an enterprise it may also exist
when there is:
1. power over more than oI the voting
rights by virtue oI an agreement with other
investors
2. power to govern the Iinancial and
operating policies oI the enterprise under a
statute or an agreement
3. power to appoint or remove the majority
oI the members oI the BoD or equivalent
governing body
4. power to cast the majority oI votes at
meetings oI the BoD or equivalent
governing body
5. any other arrangement similar to any oI
the above
Parent - a juridical person who has control over
another juridical person directly or indirectly thru
one or more intermediaries
Related Interest:
1. entities in which the amount oI investment
oI the selling FI is more than 20 but less
than 50 oI the outstanding capital stock
thereoI
2. trusts Ior the beneIit oI employees such as
pension and proIit sharing trusts that are
managed by or under the trusteeship oI the
selling FI
3. provident and other employees/oIIicers'
beneIit Iunds oI the selling FI
4. principal owners oI the selling FI
5. management oI the selling FI
6. members oI the immediate Iamilies oI the
principal owners and management oI the
selling FI
7. other parties with which the selling FI may
deal with iI one party controls or can
signiIicantly inIluence the management or
operating policies oI the other to an extent
that one oI the transacting parties might be
prevented Irom Iull y pursuing its own
separate interests
Subsidiary oI a speciIied person is an aIIiliate
controlled by such person D/I thru one or more
intermediaries
Prior Notice
No transIer oI NPLs to an SOV shall take eIect
unless the FI concerned shall give prior notice to
the borrowers oI the NPLs and all persons holding
79
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Subsequent Notice
aIter the sale/transIer oI the NPLs, the transIerring
FI shall inIorm the borrower in writing at the last
known address oI the Iact oI the sale/transIer oI
the NPLs
Subsequent TransIers
Each COE shall be valid Ior only one transIer. All
subsequent transIers shall require a separate COA
Irom the ARA
Nature oI TransIer
in the nature oI True Sale
any transIer oI NPAs not in the nature oI True Sale
shall not qualiIy Ior tax exemptions and Iee
privileges granted under the Act
The transIer by an FI oI its NPAs to an SPV shall
be considered NOT A TRUE SALE iI the FI:
1. invests in or acquires, D/I, the IUIs issued
by the SPV that acquired its NPAs
2. has d/i management oI the transIeree SPV
3. has any oI its directors, oIIicers,
employees on the board oI the transIeree
SPV
4. has obligated to repurchase or
substitute/exchange the NPA or any part
oI the pool oI NPAs at any time, except in
cases oI a breach oI representation or
warranty oI the FI
5. Has RI with the transIeree SPV
6. Possesses a claim oI beneIicial ownership
oI more than 5 oI the transIeree SPV
Following shall NOT presumed to be a true sale iI
the FI:
1. Purchases/invests in the IUIs oI the SPV
that acquired its NPAs thru its trust
department including the trust department
oI its Subsidiaries/AIIiliates, Parent bank
and the trust department oI the Parent
bank's subsidiaries/aIIiliates
2. Is made the beneIiciary oI a trust used as a
vehicle Ior purchasing and securitizing the
NPAs
3. Pays Iurther expenses in relation to the
NPAs aIter said NPAs have been
sold/transIerred to the transIeree SPV
4. Extends any credit Iacility, guaranty, or
any similar Iinancial transaction to the
transIeree SPV
5. Extends any credit Iacility, guaranty or
any similar Iinancial transaction to any
party Ior the purpose oI investing in the
equity or IUIs oI the SPV, or Ior acquiring
the NPAs Irom the SPV
6. Extends any CF, F, AST to any party Ior
the purpose oI acquiring the NPAs Irom
the transIerring FI
7. Acts as trustee (FIs trust dept) or iI the
Trust dept oI any oI the FIs
subsidiaries/aIIiliates, parent bank or
parent banks, subsidiaries/aIIiliates acting
as trustee in the securitization oI NPAs
that it has transIerred to the SPV
80
S an B eda Col l ege of L aw
B anking L aws
AUTHORS: MANILA, ANTONIO CEASAR; BERNARDO, JANSEN; INTIG, JOYESTELA; DE JESUS, TRACYANN.
FROMSECTION 2S - SANBEDACOLLEGE OF LAW, MENDIOLA: AY2011-2012. REFERENCE: BANKING LAWS &JURISPRUDENCEBYDIZON.
Penalties
prescribed under Sec 25 oI teh Act without
prejudice to other penalties that may be imposed
by the ARA oI the transIerring FI under applicable
laws
The SPV shall assume all Rights and Obligations
oI the FI over the transIerred NPA
R. Redemption Periods
provided by the Iollowing: Sec 47 oI RA 897 or
the GBL oI 2000 and Rules oI Court
T. Reports
Reports to be submitted by SPV to the
Commission
1. As Stock Corporati on
W General InIormation Sheet (GIS)
within 30 days Irom stockholder's
meeting date
W Audited Financial Statements
within 120 days Irom the end oI
the Iiscal year
2. As Issuer oI Securities to the Public
a. Annual Report on SEC Form 17A
b. Quarterly Report on SEC Form
17Q
c. A current report on SEC Form
17C
d. Monthly Reports on total
issuances and amounts oI IUIs
3. Audited Financial Statements - The Iiling
oI SEC Form 17A shall suIIice
4. Violations - any violation oI the above
due to the Iailure oI the SPV, it shall be
subject to penalty provided by SRC, this
Code, and their IRR
Reports to be submitted to the BIR by an SPV -
Ior purposes oI implementing the tax provisions oI
the Act
Reports Iiled to the BSP
4 By SPV
1. Report on any sale/transIer to any
party oI NPLs and ROPOAs
acquired Irom banks and NQBQs
quarterly
2. Report on the latest appraised/ Iair
market value oI ROPOAs and real
estate properties/ chattels used as
collateral and NQBQs semi-
annuall y
4 By Selling Financial Institution - monthl y
report regarding the actual sale/ transIer to
an SPV