BANKING
CHAPTER2 FIT AND PROPER RULE BY DARLENE GANUB BANKING 2-D ATTY.
DIZON
IV. FIT & PROPER RULE
Powers of the Monetary Board
Shall prescribe, pass upon and review the qualifications and disqualifications of individuals elected
or appointed bank directors or officers and disqualify those found unfit
May disqualify, suspend or remove any bank director or officer who commits or omits an act which
renders him unfit for the position
In determining whether an individual is fit and proper to hold the position of a director or officer of a
bank, regard shall be given to his integrity, experience, education, training and competence (CITEE)
DISQUALIFICATIONS
PERMANENTLY DISQUALIFIED FROM BEING DIRECTORS
Persons convicted by final judgment:
of offenses involving dishonesty such as but not limited to (Estafa, embezzlement, extortion,
forgery, malversation, swindling, theft, robbery, falsification, bribery, violation of B.P.22, violation
of anti-graft and corrupt practices act, and transactions under Section 7 of RA 6713 (Code of
Conduct and Ethical Standards for Public Officials and Employ
Those sentenced to serve a maximum term of imprisonment for more than 6 yrs.
Those judicially declared insolvent, spendthrift or incapacitated to contract.
Directors and officers of banks, quasi banks and trust entities:
Found administratively liable for violation of banking laws, rules and regulations where
penalty of removal from office is imposed
Found by MB unfit for the position of directors or officers because of administrative liability
by another government agency
Those judicially declared insolvent, spendthrift or incapacitated to contract.
Temporary Disqualified
1. persons who refuse to fully disclose the extent of their business interest or any material
information;
2. directors who have been absent or have not participated for whatever reason in more
than 50% of all the meetings;
3. persons who are delinquent in the payment of their obligations;
4. those charged in court for dishonesty, breach of trust and similar offenses whose
conviction has not become final and executor;
5. directors and officers with pending clearance from the monetary board;
6. disqualified for failure to observe duties and responsibilities prescribed under existing
regulations;
7. directors who failed to attend the special seminar for board of directors;
8. persons dismissed or terminated from employment for cause;
9. those under preventive suspension;
10.persons with derogatory records accdg to NBI, PNP, quasi judicial bodies;
11. those administratively liable per finding of the Monetary board while case is pending/on
appeal.
PROHIBITIONS AND DISQUALIFICATIONS
CORPORATION CODE
Sec. 27. Disqualification of directors, trustees or officers. - No person convicted by final judgment of
an offense punishable by imprisonment for a period exceeding six (6) years, or a violation of this
Code committed within five (5) years prior to the date of his election or appointment, shall qualify
as a director, trustee or officer of any corporation.
NCBA
Sec. 9 Disqualification: In addition to the disqualifications by Republic Act No. 6713, a member of
the Monetary Board is disqualified from being a director, lawyer, agent or stockholder of any bank,
quasi bank, or any other institution which is subject to supervision or examination by the Bangko
Sentral.
PDIC
Sec. 17 : Except with the written consent of the corporation (PDIC) no person shall serve as director,
officer or employee of an insured bank who has been convicted or who is hereafter convicted, of any
criminal offense involving dishonesty or breach of trust.
NCBA
Sec. 9 Disqualification: In addition to the disqualifications by Republic Act No. 6713, a member of
the Monetary Board is disqualified from being a director, lawyer, agent or stockholder of any bank,
quasi bank, or any other institution which is subject to supervision or examination by the Bangko
Sentral.
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R.A. 7353 AN ACT PROVIDING FOR THE CREATION, ORGN & OPERATION OF RURAL BANKS,
AND FOR OTHER PURPOSES
SEC. 5. All members of the Board of Directors of the rural bank shall be citizens of the Philippines at
the time of their assumption to office. Provided however, that nothing in this act shall be construed
as prohibiting any appointive or elective public official from serving as director, officer, consultant
or in any capacity in the bank.
APPENDIX 38. MANUAL OF REGULATION OF BANKS
SEC 10. Limitations on officership/directorship - Any officer or employee of the CDA (Cooperative
Devt Authority) shall be disqualified to be elected or appointed to any position in a coop bank.
Elective officials of the Govt, except barangay officials shall also be ineligible to become officers and
directors of Coop Banks.
PROHIBITION ON PUBLIC OFFICIALS
Except as otherwise provided in the Rural Bank Act, no appointive or elective public official,
whether full time or part-time shall at the same time serve as officer of any private bank, save in
cases where such service is incident to financial assistance provided by the government or GOCCs to
the bank or unless otherwise provided under existing laws.
