The New Central Bank Act

Section 22

The Bangko Sentral shall prepare data and conduct economic research for the guidance of the Monetary Board in the formulation and implementation of its policies. Such data shall include, among others, forecasts of the balance of payments of the Philippines, statistics on the monthly movement of the monetary aggregates and of prices and other statistical series and economic studies useful for the formulation and analysis of monetary, banking, credit and exchange policies.

Section 23

The Bangko Sentral shall have the authority to require from any person or entity, including government offices and instrumentalities, or government-owned or -controlled corporations, any data, for statistical and policy development purposes in relation to the proper discharge of its functions and responsibilities: Provided, That disaggregated data gathered are subject to prevailing confidentiality laws. The Bangko Sentral through the Governor or in his absence, a duly authorized representative shall have the power to issue a subpoena for the production of the books and records for the aforesaid purpose. Those who refuse the subpoena without justifiable cause, or who refuse to supply the Bangko Sentral with data required, shall be subject to punishment for contempt in accordance with the provisions of the Rules of Court. The authority of the Bangko Sentral to require data from banks shall continue to be exercised pursuant to its supervisory powers set forth in this Act and other applicable laws. Data on individuals and firms, other than banks, gathered by the Bangko Sentral shall not be made available to any person or entity outside of the Bangko Sentral whether public or private except under order of the court or under such conditions as may be prescribed by the Monetary Board: Provided, however, That the collective data on firms may be released to interested persons or entities: Provided, finally, That in the case of data on banks, the provisions of Section 27 of this Act shall apply. (as amended by RA No 11211)

Section 24

The Bangko Sentral shall promote and sponsor the training of technical personnel in the field of money and banking. Toward this end, the Bangko Sentral is hereby authorized to defray the costs of study, at home or abroad, of qualified employees of the Bangko Sentral, of promising university graduates or of any other qualified persons who shall be determined by proper competitive examinations. The Monetary Board shall prescribe rules and regulations to govern the training program of the Bangko Sentral.

Section 25

The Bangko Sentral shall have supervision over, and conduct regular or special examinations of banking institutions and quasi-banks, including their subsidiaries and affiliates engaged in allied activities. For purposes of this section, a subsidiary means a corporation more than fifty percent (50%) of the voting stock of which is directly or indirectly owned, controlled or held with power to vote by a bank or quasi-bank and an affiliate means a corporation the voting stock of which, to the extent of fifty percent (50%) or less, is owned by a bank or quasi-bank or which is related or linked directly or indirectly to such institution or intermediary through common stockholders or such other factors as may be determined by the Monetary Board. The Bangko Sentral shall have regulatory authority over, and conduct regular or special examinations of, entities which under this Act or by special laws are subject to its jurisdiction. The Bangko Sentral shall establish a mechanism for issues arising from bank examinations. It shall be independent and reports directly to the Monetary Board, without prejudice to the authority of the Bangko Sentral and its Monetary Board to take enforcement and supervisory actions against supervised entities. The department heads and the examiners of the supervising and/or examining departments are hereby authorized to administer oaths to any director, officer, or employee of any institution under their respective supervision or subject to their examination, and to compel the presentation of all books, documents, papers or records necessary in their judgment to ascertain the facts relative to the true condition of any institution as well as the books and records of persons and entities relative to or in connection with the operations, activities or transactions of the institution under examination, subject to the provision of existing laws protecting or safeguarding the secrecy or confidentiality of bank deposits as well as investments of private persons, natural or juridical, in debt instruments issued by the Government. No restraining order or injunction shall be issued by the court enjoining the Bangko Sentral from examining any institution subject to supervision or examination by the Bangko Sentral, unless there is convincing proof that the action of the Bangko Sentral is plainly arbitrary and made in bad faith and the petitioner or plaintiff files with the clerk or judge of the court in which the action is pending a bond executed in favor of the Bangko Sentral, in an amount to be fixed by the court. The provisions of Rule 58 of the New Rules of Court insofar as they are applicable and not inconsistent with the provisions of this section shall govern the issuance and dissolution of the restraining order or injunction contemplated in this section. (as amended by RA No 11211) SECTION. 25-A. Authority to Approve Transfer of Shares. — Transfers or acquisitions, or a series thereof, of at least ten percent (10%) of the voting shares in banks or quasi-banks shall require the prior approval of the Bangko Sentral. The selling or conveying stockholder shall submit such transfer or acquisition for approval by the Bangko Sentral within such period as may be prescribed by the Monetary Board. In approving such transfers or acquisitions, regard shall be given by the Bangko Sentral to the fitness of the incoming stockholders as may be indicated in their integrity, reputation and financial capacity. Without Bangko Sentral approval, no such transfer or acquisition shah have legal effect nor shall the same be recognized in the books of the institution or by any government agency, and the transferor-stockholders shall remain accountable and responsible therefor. Transfer of actual control or management of the institution to the new stockholders or their representatives prior to Bangko Sentral approval shall make the transferor, the transferee and any person responsible therefor liable under Sections 36 and 37 of this Act. Notwithstanding any provision of law to the contrary, the Bangko Sentral may share with the Philippine Deposit Insurance Corporation any information that the Bangko Sentral may obtain pertaining to transfer or acquisition of shares or series of transfers or acquisition of shares in banks and quasi-banks. (as inserted by RA No 11211)

Section 26

Any director, officer or stockholder who, together with his related interest, contracts a loan or any form of financial accommodation from: (1) his bank; or (2) from a bank (a) which is a subsidiary of a bank holding company of which both his bank and the lending bank are subsidiaries or (b) in which a controlling proportion of the shares is owned by the same interest that owns a controlling proportion of the shares of his bank, in excess of five percent (5%) of the capital and surplus of the bank, or in the maximum amount permitted by law, whichever is lower, shall be required by the lending bank to waive the secrecy of his deposits of whatever nature in all banks in the Philippines. Any information obtained from an examination of his deposits shall be held strictly confidential and may be used by the examiners only in connection with their supervisory and examination responsibility or by the Bangko Sentral in an appropriate legal action it has initiated involving the deposit account.

Section 27

In addition to the prohibitions found in Republic Act Nos. 3019 and 6713, personnel of the Bangko Sentral are hereby prohibited from: (a) being an officer, director, lawyer or agent, employee, consultant or stockholder, directly or indirectly, of any institution subject to supervision or examination by the Bangko Sentral, except non-stock savings and loan associations and provident funds organized exclusively for employees of the Bangko Sentral and except as otherwise provided in this Act; (b) directly or indirectly requesting or receiving any gift, present or pecuniary or material benefit for himself or another, from any institution subject to supervision or examination by the Bangko Sentral; (c) revealing in any manner, except under orders of the court, the Congress or any government office or agency authorized by law, or under such conditions as may be prescribed by the Monetary Board, information relating to the condition or business of any such institution. This prohibition shall not be held to apply to the giving of information to the Monetary Board or the Governor of the Bangko Sentral, or to any person authorized by either of them, in writing, to receive such information; and (d) borrowing from any institution subject to supervision or examination by the Bangko Sentral unless said borrowing is transacted on an arm’s length basis, fully disclosed to the Monetary Board, and shall be subject to such rules and regulations as the Monetary Board may prescribe. (as amended by RA No 11211)

Section 28

The supervising and examining department head, personally or by deputy, shall examine the operations of every bank and quasi-bank, including their subsidiaries and affiliates engaged in allied activities, and other entities which under this Act or special laws are subject to Bangko Sentral supervision, in accordance with the guidelines set by the Monetary Board taking into consideration sound and prudent practices: Provided, That there shall be an interval of at least twelve (12) months between regular examinations: Provided, further, That the Monetary Board, by an affirmative vote of at least five (5) members, may authorize a special examination if the circumstances warrant. The institution concerned shall afford to the head of the appropriate supervising and examining departments and to his authorized deputies full opportunity to examine its books and records, cash and assets and general condition and review its systems and procedures at any time during business hours when requested to do so by the Bangko Sentral: Provided, however, That none of the reports and other papers relative to such examinations shall be open to inspection by the public except insofar as such publicity is incidental to the proceedings hereinafter authorized or is necessary for the prosecution of violations in connection with the business of such institutions. Supervised institutions shall pay to the Bangko Sentral, no later than May 31 of each year, an annual supervision fee as may be prescribed by the Monetary Board. In determining the amount of the annual supervision fee, the Monetary Board shall consider the costs of supervision. (as amended by RA No 11211) SECTION. 28-A. Bangko Sentral Coordination. — The suspension or revocation of any government license necessary for the operation of a Bangko Sentral-supervised entity must be done only with prior consultation with the Bangko Sentral. (as inserted by RA No 11211)

Section 29

Whenever, on the basis of a report submitted by the appropriate supervising or examining department, the Monetary Board finds that a bank or a quasi-bank is in a state of continuing inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of depositors and creditors, the Monetary Board may appoint a conservator with such powers as the Monetary Board shall deem necessary to take charge of the assets, liabilities, and the management thereof, reorganize the management, collect all monies and debts due said institution, and exercise all powers necessary to restore its viability. The conservator shall report and be responsible to the Monetary Board and shall have the power to overrule or revoke the actions of the previous management and board of directors of the bank or quasi-bank. The conservator should be competent and knowledgeable in bank operations and management. The conservatorship shall not exceed one (1) year. The conservator shall receive remuneration to be fixed by the Monetary Board in an amount not to exceed two-thirds (2/3) of the salary of the president of the institution in one (1) year, payable in twelve (12) equal monthly payments: Provided, That, if at any time within the one-year period, the conservatorship is terminated on the ground that the institution can operate on its own, the conservator shall receive the balance of the remuneration which he would have received up to the end of the year; but if the conservatorship is terminated on other grounds, the conservator shall not be entitled to such remaining balance. The Monetary Board may appoint a conservator connected with the Bangko Sentral, in which case he shall not be entitled to receive any remuneration or emoluments from the Bangko Sentral during the conservatorship. The expenses attendant to the conservatorship shall be borne by the bank or quasi-bank concerned. The Monetary Board shall terminate the conservatorship when it is satisfied that the institution can continue to operate on its own and the conservatorship is no longer necessary. The conservatorship shall likewise be terminated should the Monetary Board, on the basis of the report of the conservator or of its own findings, determine that the continuance in business of the institution would involve probable loss to its depositors or creditors, in which case the provisions of Section 30 shall apply.

Section 30

Whenever, upon report of the head of the supervising or examining department, the Monetary Board finds that a bank or quasi-bank: has notified the Bangko Sentral or publicly announced a unilateral closure, or has been dormant for at least sixty (60) days or in any manner has suspended the payment of its deposit/deposit substitute liabilities, or is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That this shall not include inability to pay caused by extraordinary demands induced by financial panic in the banking community; has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or cannot continue in business without involving probable losses to its depositors or creditors; or has willfully violated a cease and desist order under Section 37 of this Act that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily and without need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation (PDIC) as receiver in the case of banks and direct the PDIC to proceed with the liquidation of the closed bank pursuant to this section and the relevant provisions of Republic Act No. 3591, as amended. The Monetary Board shall notify in writing, through the receiver, the board of directors of the closed bank of its decision. The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and executory and may not be restrained or set aside by the court except on petition for certiorari on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. The petition for certiorari may only be filed by the stockholders of record representing the majority of the capital stock within ten (10) days from receipt by the board of directors of the institution of the order directing receivership, liquidation or conservatorship. The designation of a conservator under Section 29 of this Act or the appointment of a receiver under this section shall be vested exclusively with the Monetary Board. Furthermore, the designation of a conservator is not a precondition to the designation of a receiver. The authority of the Monetary Board to summarily and without need for prior hearing forbid the bank or quasi-bank from doing business in the Philippines as provided above may also be exercised over non-stock savings and loan associations, based on the same applicable grounds. For quasi-banks and non-stock savings and loan associations, any person of recognized competence in banking, credit or finance may be designated by the Bangko Sentral as a receiver. (as amended by RA No 11211)

Section 31

(as deleted by RA No 11211)

Section 32

(as deleted by RA No 11211)

Section 33

The Bangko Sentral may, if public interest so requires, award to an institution, upon such terms and conditions as the Monetary Board may approve, the banking franchise of a bank under liquidation to operate in the area where said bank or its branches were previously operating: Provided, That whatever proceeds may be realized from such award shall be subject to the appropriate exclusive disposition of the Monetary Board.

Section 34

(as deleted by RA No 11211)

Section 35

The willful making of a false or misleading statement on a material fact to the Monetary Board or to the examiners of the Bangko Sentral shall be punished by a fine of not less than One hundred thousand pesos (₱100,000) nor more than Two million pesos (₱2,000,000), or by imprisonment of not more than five (5) years, or both, at the discretion of the court. (as amended by RA No 11211) cd

Section 36

Proceedings Upon Violation of This Act and Other Banking Laws, Rules, Regulations, Orders or Instructions. — Whenever a bank, quasi-bank, including their subsidiaries and affiliates engaged in allied activities or other entity which under this Act or special laws is subject to Bangko Sentral supervision or whenever any person or entity willfully violates this Act or other pertinent banking laws being enforced or implemented by the Bangko Sentral or any order, instruction, rule or regulation issued by the Monetary Board, the person or persons responsible for such violation shall unless otherwise provided in this Act be punished by a fine of not less than Fifty thousand pesos (₱50,000) nor more than Two million pesos (₱2,000,000) or by imprisonment of not less than two (2) years nor more than ten (10) years, or both, at the discretion of the court. Whenever an entity under feangko Sentral supervision persists in carrying on its business in an unlawful or unsafe manner, the Board may, without prejudice to the penalties provided in the preceding paragraph of this section and the administrative sanctions provided in Section 37 of this Act, take action under Section 30 of this Act. The Bangko Sentral may grant informer’s reward to any person, except an officer or employee of the Bangko Sentral or of any intelligence or law enforcement agency, including the relatives of such officer or employee within the fourth degree of consanguinity or affinity, who voluntarily give definite information not yet in the possession of the Bangko Sentral leading to the: (a) arrest of bank directors or officers and/or BSP personnel for violation of this Act or any banking and other laws implemented or enforced by the Bangko Sentral, or for violation of other penal laws committed in connection with their employment or functions; or (b) filing of criminal charges against any person for violation of Section 50 of this Act. The Monetary Board is hereby authorized to promulgate the implementing guidelines for the grant of informer’s reward, which in no case shall exceed One million pesos (₱1,000,000). Said guidelines may provide for additional qualifications and disqualifications of informants as well as the form and minimum content of the information given. The cash reward of informers shall be subject to applicable withholding taxes. (as amended by RA No 11211)

Section 37

The imposition of administrative sanctions shall be fair, consistent and reasonable. Without prejudice to the criminal sanctions against the culpable persons provided in Sections 34, 35, and 36 of this Act, the Monetary Board may, at its discretion, impose upon any bank, quasi-bank, including their subsidiaries and affiliates engaged in allied activities, or other entity which under this Act or special laws are subject to the Bangko Sentral supervision, and/or their directors, officers or employees, for any willful violation of its charter or bylaws, willful delay in the submission of reports or publications thereof as required by law, rules and regulations; any refusal to permit examination into the affairs of the institution; any willful making of a false or misleading statement to the Board or the appropriate supervising and examining department or its examiners; any willful failure or refusal to comply with, or violation of, any banking law or any order, instruction or regulation issued by the Monetary Board, or any order, instruction or ruling by the Governor; or any commission of irregularities, and/or conducting business in an unsafe or unsound manner as may be determined by the Monetary Board, the following administrative sanctions, whenever applicable: fines in amounts as may be determined by the Monetary Board to be appropriate, but in no case to exceed One million pesos (₱1,000,000) for each transactional violation or One hundred thousand pesos (₱100,000) per calendar day for violations of a continuing nature, taking into consideration the attendant circumstances, such as the nature and gravity of the violation or irregularity and the size of the institution: Provided, That in case profit is gained or loss is avoided as a result of the violation, a fine no more than three (3) times the profit gained or loss avoided may also be imposed; suspension of rediscounting privileges or access to Bangko Sentral credit facilities; suspension of lending or foreign exchange operations or authority to accept new deposits or make new investments; suspension of interbank clearing privileges; and/or suspension or revocation of quasi-banking or other special licenses. Resignation or termination from office shall not exempt such director, officer or employee from administrative or criminal sanctions. The Monetary Board may, whenever warranted by circumstances, preventively suspend any director, officer or employee of the institution pending an investigation: Provided, That should the case be not finally decided by the Bangko Sentral within a period of one hundred twenty (120) days after the date of suspension, said director, officer or employee shall be reinstated in his position: Provided, further, That when the delay in the disposition of the case is due to the fault, negligence or petition of the director or officer, the period of delay shall not be counted in computing the period of suspension herein provided. The above administrative sanctions need not be applied in the order of their severity. Whether or not there is an administrative proceeding, if the institution and/or the directors, officers or employees concerned continue with or otherwise persist in the commission of the indicated practice or violation, the Monetary Board may issue an order requiring the institution and/or the directors, officers or employees concerned to cease and desist from the indicated practice or violation, and may further order that immediate action be taken to correct the conditions resulting from such practice or violation. The cease and desist order shall be immediately effective upon service on the respondents. The respondents shall be afforded an opportunity to defend their action in a hearing before the Monetary Board or any committee chaired by any Monetary Board member created for the purpose, upon request made by the respondents within five (5) days from their receipt of the order. If no such hearing is requested within said period, the order shall be final. If a hearing is conducted, all issues shall be determined on the basis of records, after which the Monetary Board may either reconsider or make final its order. The Governor is hereby authorized, at his discretion, to impose upon banks and quasi-banks, including their subsidiaries and affiliates engaged in allied activities, and other entities which under this Act or special laws are subject to Bangko Sentral supervision for any failure to comply with the requirements of law, Monetary Board regulations and policies, and/or instructions issued by the Monetary Board or by the Governor, fines not in excess of One hundred thousand pesos (₱100,000) for each transactional violation or Thirty thousand pesos (₱30,000) per calendar day for violations of a continuing nature, the imposition of which shall be final and executory until reversed, modified or lifted by the Monetary Board on appeal. (as amended by RA No 11211)

Section 38

The Monetary Board shall, in accordance with its authority under this Act, determine and provide for such operating departments and other offices, including a public information office, of the Bangko Sentral as it deems convenient for the proper and efficient conduct of the operations and the accomplishment of the objectives of the Bangko Sentral. The functions and duties of such operating departments and other offices shall be determined by the Monetary Board. SECTION. 38-A. Issuance of Injunctive Relief Against Bangko Sentral Actions. — No court, other than the Court of Appeals and the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the Bangko Sentral for any action under this Act. Any restraining order or injunction issued in violation of this section is void and of no force and effect. The provisions of the Rules of Court on injunctions insofar as these are applicable and not inconsistent with the provisions of this Act shall govern the issuance and dissolution of restraining orders or injunctions against the Bangko Sentral. (as inserted by RA No 11211) acd