Republic Act No. 3778: An act to amend section three of republic act numbered seven hundred twenty, otherwise known as the rural banks act

In plain language

Republic Act No. 3778 amends Section 3 of the Rural Banks Act (RA 720) to clarify the role of the Monetary Board in regulating rural banks, stipulating that only one rural bank may be established per municipality or city and allowing existing banks limited time to increase capitalization before a new bank may be set up if needed.

Only one rural bank shall be established in a single municipality or city.

Existing rural bank may be allowed a period of six months, extendable for not more than six months, to increase its capitalization.

If the existing bank fails to meet credit needs, the Monetary Board may allow the establishment of another rural bank in the same locality.

Rural Banks Act

Monetary Board

Banking Regulation

REPUBLIC ACT No. 3778

An Act to Amend Section Three of Republic Act Numbered Seven Hundred Twenty, Otherwise Known as the Rural Banks Act

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

Section 1

Section three of Republic Act Numbered Seven hundred twenty, otherwise known as the Rural Banks Act, is hereby amended to read as follows:

> "Sec. 3. In furtherance of this policy, the Monetary Board of the Central Bank of the Philippines shall formulate the necessary rules and regulations governing the establishment and operation of rural banks for the purpose of providing adequate credit facilities to small farmers and merchants, or to cooperatives of such farmers or merchants, and to supervise the operation of such banks: Provided, However, That only one rural bank shall be established in a single municipality or city: Provided, further, That where the Monetary Board finds that the existing rural bank is unable to meet the credit needs of the locality, said bank shall be allowed a period of six months, extendable for not more than six months, at the discretion of the Monetary Board, within which to increase its capitalization, after which and upon failure to comply with the said requirements, the Monetary Board shall allow the establishment of another rural bank in the same locality."

Section 2

This Act shall take effect upon its approval.

Approved: June 22, 1963.

For information and research only, and not legal advice. This text may not reflect later amendments. For certified copies, refer to the Official Gazette or the issuing agency.