What's the difference? A guide to Philippine bank charters
There are six types of available bank charters in the Philippines:
- Universal Banks
- Commercial Banks
- Thrift Banks
- Rural Banks
- Cooperative Banks
- Islamic Banks
Rural Banks and Cooperative Banks have the same powers and may:
- Extend loans to farmers, fishermen, cooperatives, and certain other persons and merchants.
- Take savings and time deposits.
- Take current / checking accounts, if the bank has net assets of PHP5 million or more.
- Offer NOW (negotiable order of withdrawal) accounts.
- Act as a trustee over the estates of farmers and merchants.
- Take municipal municipal, city or provincial deposits from the municipality, city or province where the bank is located.
Thrift Banks have all the powers enumerated above, and in addition may:
- Grant all secured and unsecured loans
- Invest in bonds, commercial paper, and other fixed income securities
- Issue domestic letters of credit
- Extend credit facilities to private and government employees
- Rediscount paper with the Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP), and other government-owned or-controlled corporations
- Accept foreign currency deposits
- Purchase, hold and convey real estate
Commercial Banks may, in addition to the above:
- Buy and sell foreign exchange and bullion
- Receive in custody funds, documents and valuable objects
- Act as a broker or agent to buy and sell securities for customers
- Act as an advisor or administrator of investment management accounts
- Rent out safety deposit boxes
- Engage in quasi-banking functions
Universal Banks are the most powerful and can also:
- Exercise all the legal powers of an investment house, including underwriting
- Invest in non-allied enterprises
- Own up to 100% of the equity of a Thrift Bank, Rural Bank, or Allied enterprise
- Own up to 100% of the voting stock of -one- other Universal or Commercial Bank (if publicly-listed)
The foregoing is not complete. For extremely detailed information, see section X101 of the Manual of Regulation for Banks.
The various charters require different amounts of minimum capital, as follows:
|Type of Bank
|a. Universal Banks
|b. Commercial Banks
|c. Thrift Banks
| - With head office within Metro Manila
| - With head office outside Metro Manila
|d. Rural Banks
| - within Metro Manila
| - Cities of Cebu and Davao
| - In 1 st , 2 nd & 3 rd class cities and 1 st class municipalities
| - In 4 th , 5 th & 6 th class cities and in 2 nd , 3 rd & 4 th class municipalities
| - In 5 th & 6 th class municipalities