[ REPUBLIC ACT NO. 1300, June 16, 1955 ]
AN ACT REVISING THE CHARTER OF THE PHILIPPINE NATIONAL BANK
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. Name—Domicile and place of business.— There is hereby created a bank to be known as the Philippine National Bank. Its principal domicile and place of business shall be in the City of Manila.
CORPORATE POWERS
SEC. 2. Corporate powers and duties.—The said National Bank, upon its organization, shall be a body corporate- and shall have power:
CAPITAL
SEC. 3. Authorized capital stock—Par value.—The authorized capital stock of the Philippine National Bank shall be two hundred million pesos divided into two million par value shares of one hundred pesos each, which shall include its present capitalization: Provided, That the Bank may purchase the shares held privately at a price not exceeding their par value: Provided, further, That the increase in the authorized capital shall be fully subscribed by the Government. For the immediate payment of not less than one hundred million pesos of the said subscription, the Secretary of Finance with the approval of the President of the Philippines, shall issue bonds or other evidences of indebtedness to be negotiated either locally or abroad, the proceeds of which are hereby appropriated for the purpose.
SEC. 4. Who may vote Government-owned stock.—The voting power of all the stock of the National Bank owned and controlled by the Republic of the Philippines shall be vested the President of the Philippines, or in such person or persons as he may from time to time designate.
BANKING OPERATIONS IN GENERAL
SEC. 5. Loans and investments authorized—Total liabilities of a single borrower—Additional liabilities and security required.—Said National Bank is hereby authorized:
The total liabilities to the Bank of any person, or of any company, corporation, or firm for money borrowed, including in the liabilities of the company or firm, the liabilities of the several members thereof, shall at no time exceed fifteen per centum of the unimpaired capital and surplus of the Bank. But the discount of bills of exchange drawn in good faith against actually existing values and the discount of commercial or business paper actually owned by the person negotiating the same shall not be considered as money borrowed, and in addition to the fifteen per centum of the unimpaired capital and surplus of the Bank, hereinbefore provided for, the total it of any borrower may amount to a further fifteen per centum of the unimpaired capital and surplus of the provided such additional liabilities are secured by shipping documents, warehouse receipts or other similar documents transferring or securing title covering readily marketable, non-perishable stocks, when such staples are fully covered by insurance and when such staples have a market value equal to at least one hundred twenty-five per centum of such additional liabilities.
The Bank shall not make any loan upon, the stock of any other corporation as collateral if the aggregate market value of all such stock held as collateral exceeds an amount equal to fifteen per centum of the unimpaired capital stock and surplus of the Bank.
The term "loan" whenever used in this Act shall include overdrafts and the limitations contained in this section shall apply to any loan of any kind whenever secured wholly or partly by real estate mortgage.
BOARD OF DIRECTORS—COMPOSITION AND ORGANIZATION
SEC. 6. Board of Directors—Membership—Per diems.— The affairs and business of the National Bank shall be directed and its property managed and preserved, unless otherwise provided in this Act, by a Board of Directors consisting of nine members duly elected as hereinafter provided, who shall be paid a per diem of thirty pesos for each session of the Board of Directors attended by them.
SEC. 7. Election of Board of Directors—Election of chairman and vice-chairman of the Board—Who may not be elected member of the Board of Directors.—Annually on the first Tuesday after the first Monday in March, the stockholders shall meet to elect the members of the Board of Directors for the current year, each stockholder or Proxy to be entitled to as many votes as he may have shares of stock, registered in his name on the thirty-first of January last preceding and held by him at the time of the election. Immediately after the election, the directorate shall organize as such and elect from amongst themselves a chairman and a vice-chairman, which latter shall assist the chairman and act in his stead in case of absence or incapacity. In case of incapacity or absence both the chairman and vice-chairman, the Board of Directors shall designate a temporary chairman from among its members: Provided, That no director, shareholder or employee of any other bank shall be eligible as member of the Board of Directors of the Bank.
SEC. 8. President and Vice-President—Appointment anl removal—Salaries.—The chief executive of the Bank shall by the President, who shall be chosen and may be removed by the Board of Dix-ectors with the advice and consent d the President of the Philippines. He shall be assisted by an executive Vice-President and one or more Vice-Presidents who shall be chosen and may be removed by the Board of Directors. The salaries of the President and the Vice-President shall be fixed by the Board of Directors with the approval of the President of the Philippines.
POWERS OF BOARD OF DIRECTORS
SEC. 9. The Board of Directors shall, among other duties, powers, and authority:
SEC. 10. Duties and powers of the President.—The President of the Bank shall among others execute and administer the policies, measures, orders and resolutu approved by the Board of Directors and direct and vise the operations and administration of the Bank.
Particularly, he shall have the power and. duty:
LEGAL COUNSEL
SEC. 11. Legal Counsel.—Any provision of law or existing executive order to the contrary notwithstanding, the Philippine National Bank shall have its own legal department, the chief and members of which shall be appointed by the Board of Directors.
AUDITING DEPARTMENT
SEC. 12. Bank Auditor—Salaries and expenses of Auditing Department—Reports.—The Auditor General shall be ex officio Auditor of the National Bank and shall, with the advice and consent of the President of the Philippines, appoint a representative who shall be the Chief of the Auditing Department of the Bank. All the other employes of the department shall be appointed by the Auditor general, who with the approval of the President of the Philippines shall fix the salaries of the same as well as that of his representative, the chief of the department. The operating expenses of the department and the salaries and traveling expenses of the employees thereof shall be payable by the Bank, and the Board of Directors shall make the necessary appropriation therefor. The representative of the Auditor General shall make a quarterly report on the condition of the Bank to the President the Philippines through the Secretary of Finance, to th Auditor General and to the Board of Directors of the Bank The report shall contain among other things a statement of the resources and liabilities, including earnings and expenses, the amount of capital stock, dividends paid, surplus reserve, and undivided profits, as well as the losses, bad debts, and suspended and overdue paper carried in the Bank's assets as of the day in which the statements are compiled.
APPOINTMENT AND REMOVAL OF THE OTHEK OFFICERS AND EMPLOYEES OF THE NATIONAL BANK
SEC. 13. Other officers and employees, appointment and removal—Salaries—Non-applicability of the Civil Service Law.—All the other officers and employees of the Bank shall be appointed and removed by the Board of Directors, on recommendation of the President. Said officers and employees shall not be subject to the Civil Service Law, and their duties and compensation shall be fixed by the President with the approval of the Board of Directors: Provided, That whenever the Chairman or the vice-chairman, by order of the Board of Directors, shall temporarily or permanently perform duties incumbent upon other officers or employees, they may be granted compensation therefor subject to the written approval of the President of the Philippines.
SEC. 14. Fidelity bond for officers and employees.—The Board of Directors may require the officers and employees of the Bank and its branches, before entering upon the performance of their duties, to furnish a fidelity bond for the benefit of the Bank, in the form and amount prescribed by said Board of Directors. For this purpose, and for this purpose alone, all officers and employees of whom a bond is required shall be deemed public officers and employees, respectively, and the provisions of the Public Bonding Law, Chapter Fifteen of the Administrative Code and related legislation are hereby made applicable to the same.
INSPECTION OF THE BANK
SEC. 15. Inspection by Department of Supervision and Examination of the Central Bank.—The National Bank shall be subject to inspection by the Department of Supervision and Examination of the Central Bank.
SEC. 16. Confidential information.—The Superintendent of Banks and the Auditor General, or other officers designated by law to inspect or investigate the condition of the National Bank, shall not reveal to any person other than the President of the Philippines, the Secretary of Finance, and the Board of Directors the details of the inspection or investigation, nor shall they give any information relative to the funds in its custody, its current accounts or deposits belonging to private individuals, corporations, or any other entity, except by order of a Court of competent jurisdiction.
PROHIBITION AGAINST OWNING STOCKS OR BEING INDEBTED TO BANK
SEC. 17. Prohibition against owning stock in or incurring indebtedness to the Bank.—The Secretary of Finance, the Superintendent of Banks, the Auditor General, and the latter's representative, the chief of the auditing department of the Bank, are hereby prohibited from owning stock in the National Bank, or from becoming indebted to said National Bank, directly or indirectly.
PROHIBITED LOANS
SEC. 18. Loans to officers, directors and employees—Restriction and limitations.—The National Bank shall not, directly or indirectly, grant loans to any director, officer, employee, or agent of the Bank, and no loan shall be granted to a corporation, partnership, or company wherein any member of the Board of Directors is a shareholder, agent, or employee in any manner, except by the unanimous vote of the members of the Board present, excluding the member interested: Provided, That the total liabilities to the Bank of any corporation wherein any of the members of the Board of Directors is a shareholder, agent or employee in any manner, shall at no time exceed five per centum of the surplus and paid-up capital of the Bank.
ACQUISITION AND DISPOSAL OF REAL ESTATE
SEC. 19. Right to purchase, hold and dispose real estate.—The National Bank is hereby authorized to purchase and own such real estate as may be necessary for the purpose of carrying on its business. It is also authorized to hold such real estate as it may find necessary to acquire in the collection of debts due to the said Bank or to its branches; but real estate acquired in the collection of debts shall be sold by said Bank within five years after the date of its acquisition.
REDEMPTION OF MORTGAGED PROPERTY
SEC. 20. Right of redemption of property foreclosed.— The mortgagor shall have the right, within the year after the sale of real estate as a result of the foreclosure of a mortgage, to redeem the property by paying the amount fixed by the court in the order of execution, with interest thereon at the rate specified in the mortgage, and all the costs and other judicial expenses incurred by the Bank by reason of the execution and sale and for the custody of said property.
SEC. 21. Right to demand additional securities; Disposal of same—Advanced maturity of credits—Right to collect deficiency.—If, from any cause whatsoever, any of the securities specified for the loans provided for in this Act or accepted by said Bank as security for loans or discounts should decline or depreciate in market value in part or as a whole, or upon non-performance of any promise made to secure the loan or discount, or bills of exchange, notes, and checks, the said Bank may demand additional securities or may forthwith declare any such obligation due and payable and upon three days' notice, demand, sell, assign transfer, and deliver the whole of said securities or a part thereof, or any substitutes therefor, or any addition thereto, or any other securities or property given unto or left in the possession of, or hereafter given unto or left in the possession of the said Bank for safekeeping or otherwise, at any broker's board or at public or private sale, at the option of said Bank, and at such sale, if public, the said Bank may itself purchase the whole or any part of the property sold, free from any right of redemption on the part of the mortgagor or pledgor. In case of sale for any cause, after deducting all costs or expenses of any kind for collection, sale or delivery, the said Bank may apply the residue of the proceeds of the sale so made, to pay the said Bank, as its President shall deem proper, whether then due or not due, making proper rebate for interest on liabilities not then due, returning the overplus, if any, to the mortgagor or pledgor, who shall remain liable to and pay to said Bank any deficiency arising upon such sale or sales.
LIABILITY OF DEBTOR FOR DEFICIENCY
RIGHT OVER THE OVERPLUS
SEC. 22. Action to collect balance of indebtedness.—If the proceeds of the sale of securities held as collateral for loans by said Bank do not cover the full amount of the loan, together with the interest and other charges thereon, the Bank may proceed against the debtor for the difference, but any amount exceeding the full indebtedness to the Bank shall be paid to the debtor.
SEC. 23. Application of the Revised Penal Code.—The provisions of Title Four, Chapter One, of Act Numbered Thirty-eight hundred and fifteen, known as the Revised Penal Code, are hereby made applicable to violations of the law consisting in the making, or causing to be made, and circulating, or causing to be circulated, forged notes bonds in imitation of those of the National Bank.
PROHIBITED REMUNERATION
SEC. 24. Prohibition against charging of fees in securing loans—Penalties for violation.—No fee, charge or commission in any form shall be exacted, demanded or Paid, for obtaining loans, directly or indirectly, by any director, officer, employee, or agent of the bank. Any such director, officer, employee, or agent exacting, demanding, or receiving any fee for service or for the use of his influence in obtaining a loan shall be punished as hereinafter established for violation of this Act.
NET PROFIT
SEC. 25. Allocation of.—At the close of each calendar year, the Bank shall determine the net result of its operations, in the calculation of which, adequate allowances shall be made for probable losses. The net profit arrived thereat shall be accumulated in the surplus account which shall be utilized for such purposes as may be authorized by the Board of Directors: Provided, however, That the accumulated surplus shall not exceed the authorized capital stock.
PAYMENT OF DIVIDENDS OF GOVERNMENT SHAKES
SEC. 26. Payment, into the Philippine Treasury of dividends corresponding to Government-owned shares.— All profits assigned as dividends to the shares of the Government shall be paid into the Treasury of the Philippines for the general funds thereof.
LEGAL EXISTENCE
SEC. 27. Term of Legal Existence.—The legal existence of the Bank under this Act shall be for a period of fifty years, counting from the date of approval hereof.
ILLEGAL USE OF THE WORD "NATIONAL"
SEC. 28. Prohibition against use of word "National"— Penalty for violation.—All banks other than the Philippine National Bank and such other banks now licensed to do business in the Philippines whose name already includes the word "National" are prohibited from using the word "National" as a portion of their name or title, and any violation of this prohibition shall subject the party chargeable therewith to a penalty of not less than oi hundred pesos for each day during which it is committe or repeated.
REPEALING CLAUSE
SEC. 29. Repeal of Acts inconsistent herewith.—All Acts parts of Acts inconsistent or incompatible with the provisions of this Act are hereby repealed.
PENALTIES
SEC. 30. Penalties for violation of the provisions of this Act.—Any director, officer, employee, or agent of the Bank, who violates or permits the violation of any of the provisions of this Act, or any person aiding or abetting the violations of any of the provisions of this Act, shall be punished by a fine not to exceed ten thousand pesos or by imprisonment of not more than five years, or both such fine and imprisonment.
SEC. 31. This Act shall take effect upon its approval.
Approved, June 16, 1955.
SECTION 1. Name—Domicile and place of business.— There is hereby created a bank to be known as the Philippine National Bank. Its principal domicile and place of business shall be in the City of Manila.
SEC. 2. Corporate powers and duties.—The said National Bank, upon its organization, shall be a body corporate- and shall have power:
- To prescribe its By-laws;
- To adopt and use a seal;
- To make contracts;
- To sue and be sued;
- To carry on a trust business in accordance with the provisions of law governing trust corporations;
- To exercise the powers granted in this Act and such accidental powers as may be necessary to carry on and in the business of general banking;
- To grant long-term loans and advances ga security of real estate and/or other acceptable assets f the establishment, rehabilitation or expansion of agricii tural, industrial and other productive enterprises: Provided, That the aggregate of such loans shall not exceed the sum total of the paid-up capital and unimpaired sur plus, long-term indebtedness and obligations and thirty per cent of the total deposits: Provided, further, That notarial services in connection with loan application of not more than one thousand pesos shall be free, and in places where the bank has no lawyers, notarial services shall be performed by justices of the peace and other government notaries public free of charge;
- To invest in stocks, bonds, and other secured collaterals having maturities of not more than thirty years;
- With the approval of the President of the Philippines, to issue bonds and other certificates of indebtedness against its credits secured by real estate but not in excess of ninety per cent thereof. Said bonds shall be exempt from any and all taxes levied or assessed by the government or any of its subdivisions. The Board of Directors shall determine the interest rates, maturities and other requirements of said obligations;
- To exercise further, the general powers mentioned in the corporation law and the General Banking Law insofar as they are not inconsistent or incompatible with the provisions of this Act.
SEC. 3. Authorized capital stock—Par value.—The authorized capital stock of the Philippine National Bank shall be two hundred million pesos divided into two million par value shares of one hundred pesos each, which shall include its present capitalization: Provided, That the Bank may purchase the shares held privately at a price not exceeding their par value: Provided, further, That the increase in the authorized capital shall be fully subscribed by the Government. For the immediate payment of not less than one hundred million pesos of the said subscription, the Secretary of Finance with the approval of the President of the Philippines, shall issue bonds or other evidences of indebtedness to be negotiated either locally or abroad, the proceeds of which are hereby appropriated for the purpose.
SEC. 4. Who may vote Government-owned stock.—The voting power of all the stock of the National Bank owned and controlled by the Republic of the Philippines shall be vested the President of the Philippines, or in such person or persons as he may from time to time designate.
SEC. 5. Loans and investments authorized—Total liabilities of a single borrower—Additional liabilities and security required.—Said National Bank is hereby authorized:
- To purchase or discount promissory notes, drafts and bills of exchange issued or drawn for agricultural, industrial or commercial purposes, with the securities required by the Bank, or the proceeds of which have been used or are to be used for such purposes.
- To make 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 per centum 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 National Bank for their entire market value: And provided, finally, That if, owing to any circumstance whatever, the value of the crops given as security shall diminish, the mortgagor shall obligate himself to furnish additional security or refund such part of the loan as the Bank may leem 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 make loans to agriculturists in installments, on standing crops of the natural products of the Philippines such as rice, hemp, copra, sugar, tobacco, corn, maguey, etc., not in excess of seventy per centum of the estimated value of such crops: Provided, however, That before granting such loans, the National Bank may 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 make loans to the several provincial 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 and municipal governments and any other branch or subdivision of the Government of the Philippines,
- Generally, to make advances or discount paper for agricultural, manufacturing, industrial, or commercial purposes: Provided, That loans, discounts or advances made under this section shall have maturities not exceeding one year, renewable from year to year, in the discretion of the Bank.
The total liabilities to the Bank of any person, or of any company, corporation, or firm for money borrowed, including in the liabilities of the company or firm, the liabilities of the several members thereof, shall at no time exceed fifteen per centum of the unimpaired capital and surplus of the Bank. But the discount of bills of exchange drawn in good faith against actually existing values and the discount of commercial or business paper actually owned by the person negotiating the same shall not be considered as money borrowed, and in addition to the fifteen per centum of the unimpaired capital and surplus of the Bank, hereinbefore provided for, the total it of any borrower may amount to a further fifteen per centum of the unimpaired capital and surplus of the provided such additional liabilities are secured by shipping documents, warehouse receipts or other similar documents transferring or securing title covering readily marketable, non-perishable stocks, when such staples are fully covered by insurance and when such staples have a market value equal to at least one hundred twenty-five per centum of such additional liabilities.
The Bank shall not make any loan upon, the stock of any other corporation as collateral if the aggregate market value of all such stock held as collateral exceeds an amount equal to fifteen per centum of the unimpaired capital stock and surplus of the Bank.
The term "loan" whenever used in this Act shall include overdrafts and the limitations contained in this section shall apply to any loan of any kind whenever secured wholly or partly by real estate mortgage.
SEC. 6. Board of Directors—Membership—Per diems.— The affairs and business of the National Bank shall be directed and its property managed and preserved, unless otherwise provided in this Act, by a Board of Directors consisting of nine members duly elected as hereinafter provided, who shall be paid a per diem of thirty pesos for each session of the Board of Directors attended by them.
SEC. 7. Election of Board of Directors—Election of chairman and vice-chairman of the Board—Who may not be elected member of the Board of Directors.—Annually on the first Tuesday after the first Monday in March, the stockholders shall meet to elect the members of the Board of Directors for the current year, each stockholder or Proxy to be entitled to as many votes as he may have shares of stock, registered in his name on the thirty-first of January last preceding and held by him at the time of the election. Immediately after the election, the directorate shall organize as such and elect from amongst themselves a chairman and a vice-chairman, which latter shall assist the chairman and act in his stead in case of absence or incapacity. In case of incapacity or absence both the chairman and vice-chairman, the Board of Directors shall designate a temporary chairman from among its members: Provided, That no director, shareholder or employee of any other bank shall be eligible as member of the Board of Directors of the Bank.
SEC. 8. President and Vice-President—Appointment anl removal—Salaries.—The chief executive of the Bank shall by the President, who shall be chosen and may be removed by the Board of Dix-ectors with the advice and consent d the President of the Philippines. He shall be assisted by an executive Vice-President and one or more Vice-Presidents who shall be chosen and may be removed by the Board of Directors. The salaries of the President and the Vice-President shall be fixed by the Board of Directors with the approval of the President of the Philippines.
SEC. 9. The Board of Directors shall, among other duties, powers, and authority:
- Formulate policies necessary to carry out effectively the provisions of this Act and adopt such by-laws, rules and regulations for the effective operation of the Bank, in conformity with this Act and existing laws;
- Establish branches or agencies in other countries and at such points within the Philippines as it may deem advisable, which shall perform functions as may be delegated to them by the Board of Directors: Provided, however, That there shall be established branch banks or agencies in every provincial capital.
PRESIDENT—POWERS AND DUTIES
SEC. 10. Duties and powers of the President.—The President of the Bank shall among others execute and administer the policies, measures, orders and resolutu approved by the Board of Directors and direct and vise the operations and administration of the Bank.
Particularly, he shall have the power and. duty:
- To make loans on commercial paper for periods time not to exceed four months in sums not exceeding fifty thousand pesos to any one person, company, corporation or firm, but he is required to submit a report on i such loan to the Board of Directors at its next succeeding session.
- To make, with the advice and consent of the Board of Directors, all contracts on behalf of the said Bank and to enter into all necessary obligations by this Act required or permitted.
- To report weekly to the Board of Directors the main facts concerning the operations of the Bank during the preceding week and to suggest changes in rates of discount, exchange, or of policy which may to him seem best.
- To furnish, upon request of the Secretary of Finance or the President of the Philippines, any information in his possession regarding the operations of said Bank.
SEC. 11. Legal Counsel.—Any provision of law or existing executive order to the contrary notwithstanding, the Philippine National Bank shall have its own legal department, the chief and members of which shall be appointed by the Board of Directors.
SEC. 12. Bank Auditor—Salaries and expenses of Auditing Department—Reports.—The Auditor General shall be ex officio Auditor of the National Bank and shall, with the advice and consent of the President of the Philippines, appoint a representative who shall be the Chief of the Auditing Department of the Bank. All the other employes of the department shall be appointed by the Auditor general, who with the approval of the President of the Philippines shall fix the salaries of the same as well as that of his representative, the chief of the department. The operating expenses of the department and the salaries and traveling expenses of the employees thereof shall be payable by the Bank, and the Board of Directors shall make the necessary appropriation therefor. The representative of the Auditor General shall make a quarterly report on the condition of the Bank to the President the Philippines through the Secretary of Finance, to th Auditor General and to the Board of Directors of the Bank The report shall contain among other things a statement of the resources and liabilities, including earnings and expenses, the amount of capital stock, dividends paid, surplus reserve, and undivided profits, as well as the losses, bad debts, and suspended and overdue paper carried in the Bank's assets as of the day in which the statements are compiled.
SEC. 13. Other officers and employees, appointment and removal—Salaries—Non-applicability of the Civil Service Law.—All the other officers and employees of the Bank shall be appointed and removed by the Board of Directors, on recommendation of the President. Said officers and employees shall not be subject to the Civil Service Law, and their duties and compensation shall be fixed by the President with the approval of the Board of Directors: Provided, That whenever the Chairman or the vice-chairman, by order of the Board of Directors, shall temporarily or permanently perform duties incumbent upon other officers or employees, they may be granted compensation therefor subject to the written approval of the President of the Philippines.
SEC. 14. Fidelity bond for officers and employees.—The Board of Directors may require the officers and employees of the Bank and its branches, before entering upon the performance of their duties, to furnish a fidelity bond for the benefit of the Bank, in the form and amount prescribed by said Board of Directors. For this purpose, and for this purpose alone, all officers and employees of whom a bond is required shall be deemed public officers and employees, respectively, and the provisions of the Public Bonding Law, Chapter Fifteen of the Administrative Code and related legislation are hereby made applicable to the same.
SEC. 15. Inspection by Department of Supervision and Examination of the Central Bank.—The National Bank shall be subject to inspection by the Department of Supervision and Examination of the Central Bank.
SEC. 16. Confidential information.—The Superintendent of Banks and the Auditor General, or other officers designated by law to inspect or investigate the condition of the National Bank, shall not reveal to any person other than the President of the Philippines, the Secretary of Finance, and the Board of Directors the details of the inspection or investigation, nor shall they give any information relative to the funds in its custody, its current accounts or deposits belonging to private individuals, corporations, or any other entity, except by order of a Court of competent jurisdiction.
SEC. 17. Prohibition against owning stock in or incurring indebtedness to the Bank.—The Secretary of Finance, the Superintendent of Banks, the Auditor General, and the latter's representative, the chief of the auditing department of the Bank, are hereby prohibited from owning stock in the National Bank, or from becoming indebted to said National Bank, directly or indirectly.
SEC. 18. Loans to officers, directors and employees—Restriction and limitations.—The National Bank shall not, directly or indirectly, grant loans to any director, officer, employee, or agent of the Bank, and no loan shall be granted to a corporation, partnership, or company wherein any member of the Board of Directors is a shareholder, agent, or employee in any manner, except by the unanimous vote of the members of the Board present, excluding the member interested: Provided, That the total liabilities to the Bank of any corporation wherein any of the members of the Board of Directors is a shareholder, agent or employee in any manner, shall at no time exceed five per centum of the surplus and paid-up capital of the Bank.
SEC. 19. Right to purchase, hold and dispose real estate.—The National Bank is hereby authorized to purchase and own such real estate as may be necessary for the purpose of carrying on its business. It is also authorized to hold such real estate as it may find necessary to acquire in the collection of debts due to the said Bank or to its branches; but real estate acquired in the collection of debts shall be sold by said Bank within five years after the date of its acquisition.
SEC. 20. Right of redemption of property foreclosed.— The mortgagor shall have the right, within the year after the sale of real estate as a result of the foreclosure of a mortgage, to redeem the property by paying the amount fixed by the court in the order of execution, with interest thereon at the rate specified in the mortgage, and all the costs and other judicial expenses incurred by the Bank by reason of the execution and sale and for the custody of said property.
SEC. 21. Right to demand additional securities; Disposal of same—Advanced maturity of credits—Right to collect deficiency.—If, from any cause whatsoever, any of the securities specified for the loans provided for in this Act or accepted by said Bank as security for loans or discounts should decline or depreciate in market value in part or as a whole, or upon non-performance of any promise made to secure the loan or discount, or bills of exchange, notes, and checks, the said Bank may demand additional securities or may forthwith declare any such obligation due and payable and upon three days' notice, demand, sell, assign transfer, and deliver the whole of said securities or a part thereof, or any substitutes therefor, or any addition thereto, or any other securities or property given unto or left in the possession of, or hereafter given unto or left in the possession of the said Bank for safekeeping or otherwise, at any broker's board or at public or private sale, at the option of said Bank, and at such sale, if public, the said Bank may itself purchase the whole or any part of the property sold, free from any right of redemption on the part of the mortgagor or pledgor. In case of sale for any cause, after deducting all costs or expenses of any kind for collection, sale or delivery, the said Bank may apply the residue of the proceeds of the sale so made, to pay the said Bank, as its President shall deem proper, whether then due or not due, making proper rebate for interest on liabilities not then due, returning the overplus, if any, to the mortgagor or pledgor, who shall remain liable to and pay to said Bank any deficiency arising upon such sale or sales.
RIGHT OVER THE OVERPLUS
SEC. 22. Action to collect balance of indebtedness.—If the proceeds of the sale of securities held as collateral for loans by said Bank do not cover the full amount of the loan, together with the interest and other charges thereon, the Bank may proceed against the debtor for the difference, but any amount exceeding the full indebtedness to the Bank shall be paid to the debtor.
SEC. 23. Application of the Revised Penal Code.—The provisions of Title Four, Chapter One, of Act Numbered Thirty-eight hundred and fifteen, known as the Revised Penal Code, are hereby made applicable to violations of the law consisting in the making, or causing to be made, and circulating, or causing to be circulated, forged notes bonds in imitation of those of the National Bank.
SEC. 24. Prohibition against charging of fees in securing loans—Penalties for violation.—No fee, charge or commission in any form shall be exacted, demanded or Paid, for obtaining loans, directly or indirectly, by any director, officer, employee, or agent of the bank. Any such director, officer, employee, or agent exacting, demanding, or receiving any fee for service or for the use of his influence in obtaining a loan shall be punished as hereinafter established for violation of this Act.
SEC. 25. Allocation of.—At the close of each calendar year, the Bank shall determine the net result of its operations, in the calculation of which, adequate allowances shall be made for probable losses. The net profit arrived thereat shall be accumulated in the surplus account which shall be utilized for such purposes as may be authorized by the Board of Directors: Provided, however, That the accumulated surplus shall not exceed the authorized capital stock.
SEC. 26. Payment, into the Philippine Treasury of dividends corresponding to Government-owned shares.— All profits assigned as dividends to the shares of the Government shall be paid into the Treasury of the Philippines for the general funds thereof.
SEC. 27. Term of Legal Existence.—The legal existence of the Bank under this Act shall be for a period of fifty years, counting from the date of approval hereof.
SEC. 28. Prohibition against use of word "National"— Penalty for violation.—All banks other than the Philippine National Bank and such other banks now licensed to do business in the Philippines whose name already includes the word "National" are prohibited from using the word "National" as a portion of their name or title, and any violation of this prohibition shall subject the party chargeable therewith to a penalty of not less than oi hundred pesos for each day during which it is committe or repeated.
SEC. 29. Repeal of Acts inconsistent herewith.—All Acts parts of Acts inconsistent or incompatible with the provisions of this Act are hereby repealed.
SEC. 30. Penalties for violation of the provisions of this Act.—Any director, officer, employee, or agent of the Bank, who violates or permits the violation of any of the provisions of this Act, or any person aiding or abetting the violations of any of the provisions of this Act, shall be punished by a fine not to exceed ten thousand pesos or by imprisonment of not more than five years, or both such fine and imprisonment.
SEC. 31. This Act shall take effect upon its approval.
Approved, June 16, 1955.