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Thrift Bank

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jing abigando

on 11 March 2013

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Transcript of Thrift Bank

Thrift Banks Private Development Banks Stock Savings and Loan Associations Operations Initial Requirements for the Organization Private Development Banks What is Private Development Bank? Functions Savings and Mortgage Banks
(savings bank) -organized under the provision of Republic Act No. 4093, as amended
-known as The Private Development Banks' Act 1. Number of Organizer:
minimum of 5 and a maximum of 15 persons
once organized, any number of persons may be a stockholders of the banks -75% of the loanable fund
invested in medium and long-term loan for economic development
-25% of the loanable fund
short-term loans for miscellaneous What is Thrift Bank?
-financial institutions that focus on basic banking services for their clients, with an emphasis on individuals and small businesses.
-engaged in accumulating savings of depositors and investing them. List of Savings and Mortgage Bank in the Philippines: What is Savings and Mortgage Bank? As an Organization -a private development bank shall be organized in the form of a stock corporation and its paid-up capital shall not be less than the following:
for class A-4,000,000
for class B-2,000,000
for class C-1,000,000 Board of Director Requirements:
All members of the board of directors of the private development bank shall be citizens of the Philippines.
No full-time appointive or elective public official shall at the same time serves as officer, director, legal counsel, or consultant of any private development bank 2. Qualification of Organizers:
financial capacity
person of good standing
appropriate academic background or professional training in banking
not be a director or principal officer
be a resident of a province or city where the proposed private development bank will be established Exempted from Taxes, Charges, and Fees
except from compensating tax and tariff duties; for a period of three (3) years.
Sec. 10 - 25% per year for the succeeding (4) years. Powers and Functions
exercise all the powers and shall assume all obligations of a savings and mortgage bank as provided in the General banking Act. Functions: accept savings and time deposits
acts as correspondent for the other financial institution and as collection agent
rediscount paper with the CB, PNB or other banks in their branches Powers: Loans and Investment three general purposes:
agricultural loan
industrial loans
miscellaneous loans Agricultural Loans Industrial Loans Miscellaneous Loans Following Purposes: purchase of farm implements and machinery
purchase of fertilizer, good varieties of seeds, fingerlings.
constructions and repair of tenant quarters, warehouse and other farm building
purchase of work animals
payments of obligations following industries: -factories or productive industries such as for:
purchase of land for factory site
construction of factory building
purchase of capital asset
-extractive industries such as for:
mining or quarrying
-public utilities following purpose: construction at low-cost house
construction of hospital, medical and vacational school building
construction of modest hotel building
construction of private markets in localities not being served by public markets Terms of Maturity
and Interest Following maturities: short-term - less than 3 years
medium term - 3 to 5 years
long term - 6 to 10 years Interest not exceed a maximum 12% per annum. Scope of Authority grant loans, whether secured or unsecured;
invest in readily marketable bonds and other debt securities, commercial papers and accounts receivable, drafts, bills of exchange, acceptances or notes arising out of commercial transactions
issue domestic letters of credit;
accept savings and time deposits; Prior Approval of Monetary Board: Perform following Services: engage in trust business
perform quasi-banking functions (money market)
accept checking accounts (demand deposits) Capitalization following minimum paid-in capital: -for old thrift bank w/ head offices located:
within Metro Manila - P10M
outside Metro Manila - 5M
-for new thrift bank located:
within Metro Manila - P 20M
outside Metro Manila - 10M Establishment of Baking Offices Upon prior approval of MB -establish banking offices w/c include:
branches
extension offices Deposit Operation Current Accounts (demand deposits or checking accounts
minimum of at least 50M

Requirements:
not have incurred any capital deficiency [6 mon.]
not have incurred any net deficiency in legal reserves [6 mon.]
profitable operations [last 3 yrs. ]
personnel who will handle the demand deposit -possess the necessary experience or training
adequate to service demand deposit
adopt appropriate & adequate procedures and system of internal control Loans and Investment Operation Thrift Banks
- grant loan secured by bonds
-mortgages on real estate

Other forms:
jewelry, precious stones and articles of similar nature
-- granted by Pawnshops Thrift Banks
-grant loans against Personal Security

Minimum Requirements:
copy of the latest income tax return
copy of the financial statement

Thrift Bank
-grant loans under the Agrarian Reform Credit and Supervised Credit Program of the government Pertinent Regulations
on the Grant of Loans Following pertinent regulations govern the grant of loans: 1.Loans and other credit accommodation
-person, company, corporations or firm
--[not exceed 15% the unimpaired capital and surplus of bank] paid-in capital and accumulated:
net profit= P10M and 2M
= P12M
maximum loan:
= P1.8M (12M x 15%) Illustration: 2. total outstanding credit accommodation
-bank's director, officers, stockholders, or their related interest shall not exceed:
outstanding deposits
book value

Provided: unsecured loans bank's director, officers, stockholders, or their related interest shall not exceed in 30% of his total loan or credit accommodation Example: Stockholder
capital contribution = P100,000
savings or time deposits = P200,000
total maximum amount =P300,000

P300,000 x 30%
=P90,000 for maximum amount of loan
w/out collateral P210,000 (secured with collateral) Bank - set aside at least 25% for agriculture credit
- at least 10% for agrarian reform credit Example:
money available for lending = P3,000,000
agricultural credit = P750,000 (3M x 25%)
agrarian reform credit = P300,000 (3M x 10%) Equity Investment Financial allied undertaking of a thrift bank: 1. leasing companies
2.banks
3.investment houses
4.financing companies
5.credit card operations
6.financial institutions serving small- and medium- scales industries

following ratios:
Banks - up to 30% of their total voting stock
Other financial allied - up to 40% of their total voting stock Non-financial allied undertakings of a thrift bank: warehousing companies
storage companies
safe deposit box companies
companies engaged in the management of mutual funds but not in the mutual funds themselves
companies engaged in the provision of computer services
insurance agencies Borrowing
Operations Thrift bank
- borrow from Bangko Sentral ng Pilipinas by way of rediscounting. following guidelines:
maximum amount of loan-granted to the bank = 100% of the bank's net worth as the end of the quarter
maturity of the loan :
-production credit - not exceed in 360 days
-commercial credit - not exceed 180 days
Advances against:
-treasury bills - not exceed 60 days
-other government eligible security - not more than 180 days Privilege to rediscount with the BSP meet the following qualifications:
accordance w/ pertinent laws and existing rules and regulations
minimum capital requirements
ratio of past due granted to to its directors, officers, stockholder - not exceed 10% of the total past due loans
submitted on or before the given deadlines required by the BSP
investment-deposit ratio - at least 75% of total of deposits accumulated by the bank's head office, branch, and extension office (outside Metro Manila) Other
Borrowing Following borrowing procedures: from the government or any political subdivision or instrumentalities.
from trust departments of managed funds of banks or investment houses
Issue commercial paper:
-short-term - maturity of 365 days or less
-long term - maturity of 366 days or more Other
Operations Thrift undertake the following: purchase receivables and other obligation
engaged in open market operations
invest in readily marketable bonds and other debt securities
engage in trust operation or trust business
collect taxes, levies and other revenues of the government
participate in clearing operations
sell PNB money orders as consignee
deal in foreign exchange List of Thrift Banks in the Philippines: Card SME Bank, Inc. A Thrift Bank
Dungganon Bank (A Microfinance Thrift Bank), Inc.
ISLA Bank (A Thrift Bank), Inc.
Opportunity Kauswagan Bank, Inc. (A Microfinance Thrift Bank)
The Real Bank (A Thrift Bank), Inc.
Enterprise Bank, Inc. (A Thrift Bank) - engaged in the business accumulating the savings of its stockholders and;
-using such accumulating, together with its capital, for loans or;
- for investments in the securities of productive enterprises or in the securities of the government, or any of its political subdivisions, instrumentalities, or corporation. Stock Savings and Loan Associations What is stock savings and loan associations? Primarily Function - servicing the needs of households by providing personal finance and long term financing for home building and development Primary Function Powers Invest in equities only of such allied undertakings as may be approved by the Central Bank:

•total investment in equities - not exceed (25%) of the net worth of the association
•equity investment in any single enterprise - limited to (15%) of the net worth of the association
•equity investment in other banks Power Restriction Stock Savings and Loan Association
Restriction:

•use the word ‘bank’ Qualification of Directors •at least two-thirds of the members of the board of directors of any stock savings and loan association which may be established after the approval of this Act shall be citizens of the Philippines
• no full-time appointive or elective public official shall at the same time serve as officer, director, legal counsel or consultant of any stock savings and loan association Qualification of Directors Limitations on Lending Authority •may extend the credit amount directly, indirectly - to its directors, officers or stockholders
•outstanding credit accommodations :
stock association - may extend to each of its stockholders owning two percent (2%) or more Limitations on Lending Authority: Limitations on Investment: Limitations on investment: -investment in real estate and improvements - aggregate amount in excess of fifty per cent of its net worth Reserves •5% of the net earnings - credited to a reserve account Reserves requirement: Supervisory Powers the Monetary Board shall have the power to exercise the following:

•to examination by the Monetary Board – operation for 5 years
•reimburse the Central Bank -- cost of maintaining the department of savings and loan associations
•for this purpose:
- pay to the Central Bank,
within the first 30 days of each year after the 5th year of their existence
annual fee in an amount to be determined by the Monetary Board
- may not exceed one twentieth of one per cent Supervisory powers: Reporters:

Abigando Jing
Aganap Adonis
Aguado Adonis
Ambal Vanessa Jane
Aparece Mary Grace Thank You For Listening,,!:) Any Questions.? Capitalization: Capitalization: Minimum paid-up capital less than 100,000
That at least seventy per centum of the voting stock of a savings and loan association -owned by citizens of the Philippines
(30%) - percentage of foreign-owned voting stocks in stock savings and loan associations -primarily for the purpose of accumulating the small savings of depositors and investing them, together with its capital, in bonds or in loans secured by bonds, real estate mortgages, and other forms of security, as hereinafter provided. Requirements capital accounts: -not less than (15%) of its total assets - deducting the following assets:
•Cash on hands;
•Amounts due from banks
•Evidences of indebtedness of the Republic of the Philippines and of the Central Bank Loans and Investments •Loans with the security of their own savings deposit obligations or of mortgage and chattel mortgage bonds which they have issued, or with the security of savings deposit obligations of other banks doing business in the Philippines; Medium-term loans of the following types:
Loans for the encouragement of cattle, carabao and other livestock breeding,
- maturities up to three years.
- (50%) of the commercial value of the animals
Equipment loans,
maturities up to five years
for the acquisition of the following:
- fertilizers and any instruments
- machinery
- movable equipment used in the production, processing, transformation, handling or transportation of agricultural and industrial products Mortgage loans
•maturities up to ten years for the following:
conservation
enlargement or improvement of productive properties
or the acquisition of machinery or other fixed installations. Real estate mortgage loans
maturities - 20 years , for the following purposes only:
the construction, acquisition, expansion or improvement of rural and urban properties;
the refinancing of similar loans and mortgages; and
other purposes as may be authorized by the Monetary Board
High-grade bonds and other evidences of indebtedness, and loans against such obligations;
Drafts, bills of exchange, acceptances, or notes arising out of current commercial transactions which are endorsed or accepted by any solvent bank operating in the Philippines - 10% of the total assets of the bank;
Loans secured by the pledge to the corporation of gold or silver bullion - (90%) of the value of the pledge by which the loan is secured Borrowing of Money •Not exceed (25%) of the unimpaired capital and surplus of the bank
money borrowed against obligations of the Central Bank or of the Philippine Government, or borrowed with the full guarantee by the Government of payment of principal and interest : •with prior approval of MB
issue mortgage and chattel mortgage certificates, buy and sell them for its own account or for the account of others, or
accept and receive them in payment or as amortization of its loans
may purchase, hold and convey real estate - not exceed twenty-five per cent (25%) of its paid-up capital stock and surplus
Married women and minors may, in their own right and in their own names, make deposits and withdraw the same, and may receive dividends and interest Penalty for Violation • punished by imprisonment for not less than one year nor more than ten years and by a fine of not less than one thousand nor more than ten thousand pesos. Capital Accumulators and Loan Providers
Acts as a facilitator for the society at large
Biggest Promoter of Thrift Other Primary Functions: Secondary Functions: Deposit through Post:
Issue of Cheque Book
Pass Book
Standing Instructions
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