Villanueva, Karl Matthew E
20180200219
Commercial Law Review 2
Dean Sergio M. Ceniza
I. Yes, the BSP may validly conduct a special examination on PAMI. Law
and jurisprudence recognize the supervisory, regulatory and examination
powers of the BSP relative to Banks, financial institutions, including Non-
banks, their agents and affiliates, among others. The regulatory and
examination powers of the BSP is not limited to Banks. In this case, PAMI,
as a securities broker and affiliate of Bangon Bank, transacting and
engaging business therewith may be validly subjected to a special
examination by the BSP. 8 points
II. The argument of Pabebe Bank is not tenable. Law and jurisprudence
recognize the secrecy of bank deposits and their confidential nature.
Loans however are not deposits contemplated under the bank secrecy
law. What is prohibited is only the inquiry on the bank deposits and
divulging of the information thereof. Other bank transactions may validly
be examined by the BSP pursuant to its supervisory, regulatory, and
examination powers. Hence, the BSP is well within its powers to conduct
the regular examination and inquire into relative bank transactions.
7 points
III. The filing of the petition was not proper. Law and jurisprudence
require the authority and inclusion of the PDIC in the filing of the petition
assailing the subject resolution. Having been placed under receivership of
the PDIC, the PDIC acquires the authority and power to institute such
cases on behalf of the Bank. Hence in this case, with the Banco Filipino
being placed under receivership of the PDIC, the Banco Filipino shall have
sought the approval of the PDIC and included the same in the filing of the
petition assailing the subject resolution. 10 points
IV. No, the argument of Larry Soria is not tenable. Law and jurisprudence
provide for the prohibition and limitation on DOSRI loans. The director or
officer of the bank cannot acquire loans from the bank without the 1)
approval of the board of directors, 2) satisfying the reportorial
requirement, 3) compliance with ceiling requirement where the amount
allowed shall only be equivalent to the deposit or paid subscribed capital
stock with the bank. In this case, without compliance to the DOSRI rule,
the loan by Soria cannot be deemed valid and therefore he cannot claim
ownership of the subject loaned money. Hence, Soria may be charged for
estafa and violation of the Prohibition on DOSRI Loans. 8 points
V. Yes, the additional requirement to approve Lorna’s Loan is proper. Law
and jurisprudence provide for the prohibition and limitation on DOSRI
loans. A director or officer of the bank cannot acquire loans from the bank
without the 1) approval of the board of directors, 2) satisfying the
reportorial requirement, 3) compliance with ceiling requirement where the
amount allowed shall only be equivalent to the deposit or paid subscribed
capital stock with the bank. Further, the directors may validly impose such
1
Villanueva, Karl Matthew E
20180200219
Commercial Law Review 2
Dean Sergio M. Ceniza
other conditions or obligations as may be deemed necessary for the
issuance of such loan. Hence, the PSRBRB as owner of MRB may impose
such other additional condition for the purpose of safeguarding and
securing its interest in the exercise of the highest degree of diligence
required of banks. 7 points
VI. Yes, the issuance of the writ of garnishment is valid. Law and
jurisprudence recognize the secrecy of bank deposits and their
confidential nature. The same applies to foreign currency deposits.
However, what is prohibited is only the inquiry on the bank deposits. The
issuance of the writ of garnishment does not inquire as to the contents of
the bank deposits and merely secures the bank accounts for performance
of an obligation and execution of the decision. Hence, the issuance of the
writ of garnishment as against the accounts of KRH and Harakiri in this
case shall be valid. 0 points
VII. The argument of PMB is not tenable. Law and jurisprudence recognize
the secrecy of bank deposits and their confidential nature. However, what
is prohibited is only the inquiry on the bank deposits and not the details of
the transactions of the account, ie. as to who has accounts or as to the
number of accounts, etc. The AMLC in exercise of its investigative powers
may validly conduct such investigation and inquire into bank transactions,
considering the presence of alleged illicit/ money laundering activities.
0 points
VIII. Yes, the Court of Appeals validly issued the freeze order. Law and
jurisprudence provide that there shall be a valid issuance of the freeze
order 1) upon ex parte motion of the AMLC to the Court of Appeals and 2)
the determination and existence of probable cause by the court. Prior
notice and hearing may be dispensed with as such would defeat the
purpose of securing the subject freeze orders. Providing for the notice and
hearing would allow the suspect/ offender to secure his assets and move
the money hence defeating the purpose of acquiring the freeze order; of
which is to likewise secure the subject assets or money suspected of
being involved in money laundering activities. Hence in this case, the
issuance of freeze order as against Mayor Dacuycuy shall be deemed
valid. 10 points
