BANK ORGANIZATION

Any business, whether big or small must be formed under the accepted principles of organizing and financing.

GENERAL ASPECTS

IN ESTABLISHING

BANKS

Economic justification for banks

In determining this particular aspect, the

organizers must be armed with facts and

figures which they have to analyze carefully

before they can proceed with their project.

Selection of stockholders

The organizers also have to contend

themselves with the selection of

stockholders. This is an essential

consideration in setting up a bank because

on such choice may depend its success or

failure.

The determination of the kind of bank to be formed

Determination of the type of bank depends upon the

economic survey. The survey will include the level of

income of the community, the businesses and

industries, the population of the place, the number

of banks or financial institutions, and factors which

will lead to a decision on the size of the organization

to be set up.

Determination of the amount of capital to be raised

The organizers will find it easier to

determine the amount of capital to be raised

after they have agreed on the type of the

bank. They must be aware that at least the

minimum requirements should be met.

Organization, Management, and

Administration

In this regard, the Philippine banking laws and the Corporation Code shall serve as guide to the organizers.

Sec. 8

Organization

Sec. 9

Issuance of Stocks

Sec. 10

Treasury Stocks

Sec. 12

Stockholdings of

Family Groups or

Related Interests

Sec. 13

Corporate

Stockholdings

Sec. 14

Certificate of

Authority to Register

Sec. 15

Board of Directors

Sec. 16

Fit and Proper Rule

Sec. 17

Directors of Merged or

Consolidated Banks

Sec. 18

Compensation and

Other Benefits of

Directors and Officers

Sec. 19

Prohibition on Public

Officials

Sec. 20

Bank Branches

Sec. 21

Banking Days and

Hours

Sec. 22

Strikes and Lockouts

Licensing of Foreign Banks

Sec. 72

Transacting Business

in the Philippines

Sec. 73

Acquisition of Voting

Stock in a Domestic

Bank

Sec. 74

Local Branches of

Foreign Banks

Sec. 75

Head Office

Guarantee

Sec. 76

Summons and Legal

Process

Sec. 77

Laws Applicable

Sec. 78

Revocation of License

of a Foreign Bank

Why banks are established as corporations

A corporation is formed by a number of persons who pool in their resources to enter a business for profit.

Banks, which by their very nature, deal in large amounts of capital. Furthermore, loans are given out for a long durations in some instances and only an entity with a long tenure could be beneficial in such a case.

The delegation of management to a few who

compose the board of directors, will allow

flexible management, expansion, as well as

departmentalization. This method of

administration leads to specialization and

division of labor which favor’s bank’s

function.

Bank Location

Anyone imbued with business sense will perhaps know that a poor location will be deterrent to an otherwise profitable venture.

Customers always look for places which offer a wide variety of conveniences in meeting their needs.

There are many factors which will influence the choice of the bank’s location. To fulfill the needs of strategic sites, the organizers must have in mind the availability of transportation. Whether the location is within the commercial district or not, the accessibility of the place both to human and vehicular traffic should be considered.

This will enhance the chances of the bank attract the greatest number of potential depositors and customers.

Role of Regulatory Government Bodies in Bank Organization

The role of the regulatory government

bodies in the bank organization is to

facilitate the processing and approval of

pertinent documents to make the

organization legal.

The Securities and Exchange Commission

For its part, also duly examines the paper to

see to it that all requirements are met before

issuing the certificate of incorporation.