bank industry stucture banking 1 (1)
TRANSCRIPT
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.