I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
The General Banking Law (RA 8791) defines a bank as an entity that lends money from deposits it obtains from the public. "Public" refers to twenty (20) ore more people.
A quasi-bank (also known as a finance corporation) borrows money from the public through deposit substitutes which it lends or uses to buy receivables or other obligations.
Banks and quasi-banks have the following requirements:
1.) They must be stock corporation. The must be of par value. Banks can't buy their own shares or accept them as security for a loan unless authorized by the Monetary Board of the Central Bank. If allowed, they must be sold or disposed of within six (6) months of purchase or acquisition.
2.) Its money must come from the public. Remember the definition of "Public."
3.) It must meet the minimum requirements prescribed by the Monetary Board for the category it belongs to (thrift, rural, commercial...)
4.) The Board of Directors should have a minimum of five (5) and a maximum of fifteen (15) members, two (2) of whom should be independent (meaning someone who isn't an officer of the bank, its subsidiaries, affiliates or related interests.
Banks cannot go into the insurance business. Hiring casual employees for positions involving deposits in also prohibited. Banks are also not subject to Central Bank Circular 416; other rules dictate their interest rates on loans.
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