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Republic Act No. 7353

The document discusses laws related to rural banks in the Philippines. It establishes rural banks to provide credit facilities to farmers, merchants, cooperatives, small businesses and people in rural communities. It also allows for foreign equity investment in rural banks and stipulates requirements regarding ownership and boards of directors. Government financial institutions will also invest in rural banks as supplemental capital.

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Lourdes Espera
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52 views

Republic Act No. 7353

The document discusses laws related to rural banks in the Philippines. It establishes rural banks to provide credit facilities to farmers, merchants, cooperatives, small businesses and people in rural communities. It also allows for foreign equity investment in rural banks and stipulates requirements regarding ownership and boards of directors. Government financial institutions will also invest in rural banks as supplemental capital.

Uploaded by

Lourdes Espera
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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REPUBLIC ACT NO.

7353
AN ACT PROVIDING FOR THE
CREATION, ORGANIZATION
AND OPERATION OF RURAL
BANKS, AND FOR OTHER
PURPOSES

The State hereby recognizes the need to


promote comprehensive rural development with
the end in view of :
Attaining acquitable distribution of
opportunities, income and wealth;
A sustained increase in the amount of
goods and services produced by the
nation of the benefit of the people;
And in expanding productivity as a key
raising the quality of life for all,
especially the underprivileged.

Establishment and operation of rural banks for

the purpose of providing adequate credit


facilities to

Farmers
Merchants,
Cooperatives of such farmers and
merchants
The people of the rural communities
Small business enterprises

[REPUBLIC ACT
NO.10574]
AN ACT ALLOWING THE
INFUSION OF FOREIGN
EQUITY IN THE CAPITAL OF
RURAL BANKS, AMENDING
REPUBLIC ACT NO. 7353

x x x The capital stock of any rural bank


shall be fully owned and held directly or
indirectly by citizens of the Philippines
or corporations, associations or
cooperatives qualified under Philippine
laws to own and hold such capital stock.
x x x Sec 4.

x x x No less than forty percent


(40%) of the voting stocks of a rural
bank shall be owned by citizens of
the Philippines or corporations or
associations organized under the
laws of the Philippines x x x
Non-Filipino citizens may own,
acquire or purchase up to sixty
percent (60%) of the voting stocks
in a rural bank.

All members of the Board of


Directors of the rural bank shall be
citizens of the Philippines at the time
of their assumption to office Sec. 5

Non-Filipino citizens may become


members of the Board of Directors of a
rural bank but their participation in the
Board shall be limited to their
proportionate share in the equity of the
rural bank:
Provided, however,That at least one
(1) independent director shall be
elected to the Board of Directors .

No director or officer of any rural bank shall, either directly


or indirectly, for himself or as the representative or agent of
another,

1. Borrow any of the deposits or funds of such banks,


2. Nor shall he become a guarantor, indorser, or
surety for loans from such bank to others,
3. Or in any manner be an obligor for money
borrowed
from the bank or loaned by it
Except with the written approval of the majority of
the directors of the bank, excluding the director
concerned.

To provide supplemental capital to any rural bank


until it has accumulated enough capital of its own or stimulate
private investments in rural banks, the Land Bank of the
Philippines or any government-owned or controlled
bank or financial institution shall subscribe within thirty
(30) days to the capital stock of any rural bank from time to
time x x x,
That shares of stock issued, may be paid off at par and
retired in whole or in part if the rural bank has
accumulated enough capital strength to permit retirement of
such shares; or if an offer is received from private sources to
replace the equity investment of the Land Bank of the
Philippines, the Development Bank of the Philippines or any
government-owned or controlled bank or financial institution
with an equivalent investment or more in the equity of such
bank.

x x xProvided, however,That
shares of stock issued to the Land
Bank of the Philippines, the
Development Bank of the Philippines
or any government-owned or
-controlled bank or financial
institution, may, pursuant to this
section, at any time, be bought at
adjusted book value. Sec. 8

To provide supplemental capital to any rural bank until it has accumulated enough capital of its own
or stimulate private investments in rural banks, the Land Bank of the Philippines, the Development
Bank of the Philippines or any government-owned or -controlled bank or financial institution shall
subscribe within thirty (30) days to the capital stock of any rural bank from time to time in an
amount equal to the total equity investment of the private shareholders which shall be paid in full at
the time of the subscription or such amount as may be necessary to promote and expand rural
economic development:Provided, however,That shares of stock issued to the Land Bank of the
Philippines, the Development Bank of the Philippines or any government-owned or -controlled bank
or financial institution, may, pursuant to this section, at any time, be bought at adjusted book value.
Stocks held by the Land Bank of the Philippines, the Development Bank of the Philippines or by any
government-owned or -controlled bank or financial institution, under the terms of this section, shall
be made preferred only as to assets upon liquidation and without the power to vote and shall share
in dividend distributions from the date of issuance in an amount based on the lending benchmark
approved by the Bangko Sentral ng Pilipinas plus the prevailing non-prime spread of the government
financial institution:Provided, however,That if such stock of the Land Bank of the Philippines, the
Development Bank of the Philippines or any government-owned or -controlled bank or financial
institution is sold to private shareholders, the same may be converted into common stock of the
class provided for in Section 10 hereof:Provided, further,That pending the amendment of the
Articles of Incorporation of the rural bank, if necessary, for the purpose of reflecting the conversion
into common stock of preferred stock sold to private shareholders, the transfer shall be recorded by
the rural bank in the stock and transfer book and such shareholders shall thereafter enjoy all the
rights and privileges of common stockholders. The preferred stocks so transferred shall be
surrendered and cancelled and the corresponding common stocks shall be issued.

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