Banks in the Philippines are governed by laws and organized as corporations. They must obtain funds from the public through deposits and engage in lending to be considered banks. The earliest banks date back to ancient times in places like Babylon and Rome. In the Philippines, the first bank was founded in 1830 and the first government bank was established in 1851. Banks are now organized under various categories and regulated by the central bank to protect the public trust placed in them.
Banks in the Philippines are governed by laws and organized as corporations. They must obtain funds from the public through deposits and engage in lending to be considered banks. The earliest banks date back to ancient times in places like Babylon and Rome. In the Philippines, the first bank was founded in 1830 and the first government bank was established in 1851. Banks are now organized under various categories and regulated by the central bank to protect the public trust placed in them.
Banks in the Philippines are governed by laws and organized as corporations. They must obtain funds from the public through deposits and engage in lending to be considered banks. The earliest banks date back to ancient times in places like Babylon and Rome. In the Philippines, the first bank was founded in 1830 and the first government bank was established in 1851. Banks are now organized under various categories and regulated by the central bank to protect the public trust placed in them.
Banks in the Philippines are governed by laws and organized as corporations. They must obtain funds from the public through deposits and engage in lending to be considered banks. The earliest banks date back to ancient times in places like Babylon and Rome. In the Philippines, the first bank was founded in 1830 and the first government bank was established in 1851. Banks are now organized under various categories and regulated by the central bank to protect the public trust placed in them.
ANCIENT TIMES Banks in our country, their organizations
as early as 2,000 B.C. there are governed by our laws and they are were records of loans in the organized in the form of a corporation temples of Babylon. Banking business involves public trust Companies of traders conducted and interest, it requires more stable and banking activities related to a strong organization buying and selling of goods Policy of the BSP to encourage the Greek system of banking was adopted consolidation or merger of small banks in Egypt and then in Rome to be more efficient in their operations MEDIEVAL TIMES and be able to serve better the people. Genoa and other Italian cities during the 12th Century ESTABLISHMENT OF DOMESTIC BANKS Commerce expanded in Europe in the Unlike other types of business 14th Century undertakings, it is not easy to organize- International trade fairs were set up by stringent and rigid provisions of laws bankers in Champagne, France. that must be strictly complied with A bank is imbued with “public trust” BEGINNING OF COMMECIAL BANKING and “public interest” Bankers in the Mediterranean cities Banking industry considered were the direct ancestors of modern indispensable to growth of the national commercial banking economy, PD No. 1738 Organization and management of a Banco della Piazza di Rialto, founded domestic banking institution are in Venice was the first real public governed by the following legislations: bank 1. General Banking Act Bank of Deposit in Barcelona (1401) 2. Bangko Sentral Act Casa di Giorgio in Genoa (1407) 3. Revised Securities Act Development of Banking in the Philippines 4. Corporation Code of the Philippines 5. Others (Specific banks) OBRAS PIAS Rural Banks Act Private Development Banks Act Rich and religious citizens Savings and Loan Association Act donated money for charitable Banks domestically organized must be and pious projects during the stock corporations-the SEC is required Spanish time and such funds to register the articles of incorporation were called Obras Pias which of any bank. means pious works and At least 70% of the voting stock is managed by confraternities. owned by citizens of the Philippines, except as may be provided by law. Became the forerunner of banking institution in the Philippines. FOREIGN BANKS RISE OF BANKS IN THE PHILIPPINES No foreign bank or banking corporation formed, organized or existing under any 1778 - arrival of Governor Jose Basco y laws other than those of the RP be Vargas paved the way for the economic permitted to transact business in the development of the Philippines-to Philippines or maintain by itself or transform the country into a self- assignee any suit of recovery of any debt, sufficient economy, and to make it claim, or demand whatsoever until a financially independent from Mexico. license from the SEC is secured, upon 1830 - first Filipino bank was founded order of the Monetary Board is required by Francisco Rodriguez named to order the issuance of a license to a RODRIGUEZ BANK followed by particular foreign bank to operate in the Garrido Bank and then Tuazon Bank. Philippines. 1851 - first government bank was established by Governor Antonio de o WHAT IS A BANK? - A place where Urbiztondo called Banco Espanol- people deposit their money Filipino de Urbiztondo now the Bank of the Philippine Islands (BPI). Attributes of a bank own account, through the issuance, 1. It must be authorized by the endorsement or acceptance of debt monetary board of the BSP. instrument of any kind other than 2. It must engage in the lending of deposits from 21 or more lenders at any funds. one time for purposes of relending or 3. It must regularly conduct such purchasing of receivables and other operations, and obligations 4. It must obtain the funds from the public through the receipt of o Financial intermediaries - shall mean deposits of any kind. persons or entities whose principal functions include the lending, investing GENERAL CATEGORIES OF A BANK or placement of funds or evidences of indebtedness 1. Commercial banks 2. Thrift banks, composed of (a) o Regulation - shall mean the issuances of Savings and mortgage banks, (b) rules of conduct or the establishment of Stock savings and loan modes of standards of operation for associations, and (c) Private uniform application to all institutions development banks covered, taking into consideration 3. Rural banks (Regional unit bank) o Regulation - (continuation) in DEFINITION OF TERMS determining such coverage the o Deposit - is constituted from the distinctive character of the operations moment a person receives a thing of institutions and the substantive belonging to another, with the similarities of specific functions to obligation of safely keeping it and of which such rules, modes, or standards return the same. are to be complied. o Deposit money - all those liabilities of o Supervision - shall include not only the the BSP and of other banks which are issuance of rules, but also the overseeing denominated in Philippine currency and to ascertain that regulations are are subject to payment in legal tender complied with. upon demand by the presentation of checks. COMMERCIAL BANK AND ITS FUNCTIONS o is any corporation which accepts or o Deposit substitutes - an alternative creates demand deposits subject to form of obtaining funds from the public, withdrawal by check. other than deposits, through the o may have all powers as may be necessary issuance, endorsement, or acceptance to carry on the business of commercial of debt instruments for the borrower’s banking, by accepting drafts and issuing own account, for the purpose of letters of credit, by discounting and relending or purchasing of receivables negotiating promissory notes, drafts, and other obligations. bills of exchange, and other evidences of debts, by receiving deposits, by buying o Loan - one of the parties delivers to and selling foreign exchange and gold or another, either something not silver bullion, and by lending money consumable so that the latter may use against personal security or against the same for a certain time and return securities consisting of personal it, in which case the contract is called property or mortgages on improved real commodatum. estate. o may acquire readily marketable bonds o Loan - money or other consumable and other debt securities subject to thing, upon the condition that the same such rules as the Monetary Board may amount of the same kind and quality promulgate. shall be paid, in which case the contract o may invest in equities of the following is simply called a loan or mutuum. allied undertakings: warehousing companies. o Public - shall mean twenty or more lenders. BANK RESERVES o Quasi-Banking Functions - shall mean o Currency deposits that are not lent out borrowing funds for the borrower’s to a bank’s clients. BANK DEPOSITS o Small fraction of the total o Current Deposit deposits is held internally by the Also called demand deposit, can be bank in cash vaults or deposited withdrawn by the depositor at any time with the BSP. by checks. o Banks holdings of deposits with the BSP o Savings Deposit PHILIPPINE DEPOSIT INSURANCE Means for individuals who wish to CORPORATION (PDIC) deposit small amounts out of their o Federal Deposit Insurance Corporation current income. (FDIC) in the USA for the purpose of safeguarding the interests of o Fixed Deposit depositors with respect to their A deposit repayable after the expiry of deposits in banking institutions. specific period, which is to be o PDIC Board of Directors is composed determined at the time of opening of of 3 members: 1 of whom shall be the the account. It is also known as time Governor of the BSP and 2 will be deposit. appointed by the President of the Philippines, all are Filipino citizens. o Recurring Deposit o Maximum amount of insured deposit Depositor is required to deposit a fixed of any depositor shall be P500,000 amount of money for a specific period of o Shall insure the deposits of all banks time. which are entitled to the benefits of insurance. Certain terms are defined to avoid its misunderstanding in the o Miscellaneous Deposits implementation and interpretation: Banks introduced several deposit 1. Board of Directors means board of schemes to attract deposits from the directors of the corporation different types of people, like home 2. Bank and banking institution shall be construction deposit scheme, sickness synonymous and interchangeable and benefit deposit scheme, children gift shall include banks and all other plan, old age pension, mini-deposit companies and partnerships scheme, etc. performing banking functions in the Philippines. Deposit 3. Receiver includes a receiver, liquidating o Means the unpaid balance of money or its agent, commissioner or other agency equivalent received by a bank in the usual 4. Insured bank means any bank the course of business and for which has given deposits of which are insured in or is obliged to give credit to commercial, accordance with the provisions of Act. checking, savings, time or thrift accounts. 5. Non-insured bank means any bank the deposits of which are not insured. Insured Deposit 6. Deposit means the unpaid balance of o Means the amount due to any bona fide money or its equivalent received by a depositor for any legitimate deposits in an bank in the usual course of business insured bank net of any obligation of the and for which it has given or is depositor to the insured bank as of date of obliged to give credit to a commercial, closure, but not to exceed five hundred checking, savings, time or thrift thousand pesos (P500,000) the maximum account. deposit. 7. Insured Deposit means the net amount due to any depositor for BANK’S PRODUCTS AND SERVICES deposits in an insured bank less any part thereof in excess of P500,000. - Saving Account 8. Transfer deposit means a deposit in an - Current Account insured bank made available to a - Overdraft Account depositor by the Corporation as - Term Deposit payment of insured deposit. - Planned Saving 9. Trust funds means funds held by an - Deposit Products insured bank in a fiduciary capacity and includes funds for trustee, etc.