Tuesday, December 25, 2012

INVESTMENT AND BANKING LAWS Course Syllabus

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A. General Banking Law of 2000 (R.A. 8791)

1.     State Policy
2.     Banks, Defined

Cases:

a. Simex International v. Court of Appeals, 183 SCRA 360, 366-367 (1990)

b. Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. No.  138569, September 11, 2003, 410 SCRA 562, 574-575

c. Metropolitan Bank and Trust Company vs. Cabilzo, G.R. No. 154469, December 6, 2006.

d. Philippine Banking Corporation vs. Court of Appeals, G.R. No. 127469, Janu­ary 15, 2004.

e. Serrano vs. Central Bank, G.R. No. L-30511, February 14, 1980, 96 SCRA 96.

3.     Classification of banks

4.     Distinction of banks from quasi-banks and trust entities

5.     Diligence required of banks

6.     Authority of the Bangko Sentral ng Pilipinas

7.     Organization, Management and Administration of Banks, Quasi-Banks and Trust Entities

a) Organization
b) Stockholdings
c) Fit and proper rule
d) Limitation on compensation and benefits of directors and officers
e) Prohibition on public officials
f) Branches
g) Banking days
h) Rule on strikes and lockouts

8.     Bank powers and liabilities

a) Operations of Universal Banks
b) Operations of Commercial Banks

9.     Nature of bank funds and bank deposits

a) Kinds of Deposit
a.1) Demand deposits
         - Drawing against uncollected deposits (DAUD)
         - Current accounts of bank officers  
a.2) Savings deposit
a.3) Negotiable Order of Withdrawal (NOW) Account
a.4) Time deposits 
a.5) Deposit Substitute Operations
a.6) Foreign Currency Deposits
a.7) Anonymous and Numbered Accounts         

     Cases:

a. Central Bank of the Philippines vs. Morfe, 63 SCRA 114, 119
b. Bank of the Philippine Islands vs. Court of Appeals, G.R. No. 104612, May 10, 1994
c. The Consolidated Bank and Trust Corporation vs. Court of Appeals, G.R. No. 138569, September 11, 2003.
d. BPI Family Bank vs. Franco G.R. No. 123498, November 23, 2007.
e. Bank of the Philippine Islands vs. Casa Montessori Internationale, G.R. No. 149454, May 28, 2004.
f. Bank of the Philippine Islands vs. Court of Appeals, G.R. No. 104612, May 10, 1994.
g. BPI vs. Roxas, G.R. No. 157833, October 15, 2007
h. Associated Bank vs. Tan, G.R. No. 156940, December 14, 2004, 446 SCRA 282
i. Banco de Oro Savings and Mortgage Bank vs. Equitable Banking Corp., G.R. No. L-74917, January 20,1988
j. Bank Of The Philippine Islands Vs. Court Of Appeals, G.R. No. 136202, Janu­ary 25, 2007
k. Philippine Commercial International Bank vs. Court of Appeals, G.R. No. 121413, January 29, 2001

b) Minors and Corporations as Depositors
c) Matured Time Deposits
d) Risk-based capital
 
10.  Grant of loans and security requirements

a) Ratio of net worth to total risk assets
b) Single borrower’s limit
c) Restrictions on bank exposure to DOSRI (directors, officers, stockholders and their related interests)
e) Loans against Real Estate
f) Loans against chattels and other intangible properties
g) Loan purposes and grant
h) Unsecured loans
i) Other security requirements
j) Amortization on loans
k) Prepayment of loans
l) Foreclosure of real estate mortgage
m) Renewal or extension of loans and other credit accommodations
n) Provisions for losses and write-offs

         Cases:
        
a. GC Dalton Industries, Inc., v. Equitable PCI Bank, G.R. No. 171169, August 24, 2009
b. Equitable PCI Bank vs. Ng Sheurig Ngor, G.R. No. 171545, December 19, 2007
c. Floirendo vs. Metropolitan Bank and Trust Co., G.R. No. 148325, September 3, 2007.
d. Trade & Investment Development Corporation of the Philippines vs. Roblett Industrial Construction Corporation, G.R. No. 139290, May 19, 2006
e. New Sampaguita Builders Construction vs. Philippine National Bank, G.R. No. 148753, July 30, 2004

11.  Other provisions

a) Major investments
b) Ceiling on investments in certain assets
c) Acquisition of real estate
d) Other banking services
e) Unsafe or unsound banking practices
f) Prohibition on dividend declaration

12.  Penalties for violations
a) Fine, imprisonment
b) Suspension or removal of director or officer
c) Dissolution of bank


B. The New Central Bank Act (R.A. 7653)

1. State policies
2. Creation of the Bangko Sentral ng Pilipinas (BSP)
3. Responsibility and primary objective
4. Monetary board - powers and functions
5. How the BSP handles banks in distress
a) Conservatorship
b) Closure
         b.1 “Close Now, Hear Later”

         Case:

1. Rural Bank of San Miguel v. Monetary Board, G.R. No. 150886, February 16, 2007        
2. Banco Filipino Savings and Mortgage Bank v. Ybanez, G.R. No. 148163, December 6, 2004

c) Receivership
d) Liquidation

6. Legal Tender

a) Legal tender power

7. How the BSP handles exchange crisis

                  a) Domestic monetary instability
b) Abnormal movements in the monetary aggregates, credit or price level
c) Foreign Exchange
d) Liquidity problems of banks

C. Law on Secrecy of Bank Deposits (R.A. 1405, as amended)

1. Purpose
2. Prohibited acts
3. Deposits covered

         Cases:

1. Ejercito v. Sandiganbayan, G.R. Nos. 157294-95, November 30, 2006

4. Exceptions
5. Garnishment of deposits, including foreign deposits
6. Penalties for violation


D. Philippine Deposit Insurance Corporation Act

1. Basic policy
2. Concept of insured deposits
3. Liability to depositors
a) Deposit liabilities required to be insured with PDIC
b) Commencement of liability
c) Deposit accounts not entitled to payment
d) Extent of liability
e) Determination of insured deposits
f) Calculation of liability
(i) Per depositor, per capacity rule
(ii) Joint accounts
(iii) Mode of payment
(iv) Effect of payment of insured deposit
(v) Payments of insured deposits as preferred credit under Art. 2244, Civil Code
(vi) Failure to settle claim of insured depositor
(vii) Failure of depositor to claim insured deposits
(a) Examination of banks and deposit accounts
(b) Prohibition against splitting of deposits
(c) Prohibition against issuances of TROs, etc.

E. Truth in Lending Act (R.A. 3765)


A. Purpose

B. Obligation of creditors to person to whom credit is extended

C. Covered and excluded transactions

D. Consequences of non-compliance with obligation


         Cases:

1.    Development Bank of the Philippines v. Felipe Arcilla, G.R. No. 161397, 161426, June 30, 2005
2.    United Coconut Planters Bank v. Sps. Beluso, G.R. No. 159912, August 17, 2007