13t'' Congress of the Republic 
) 
:L cs 
of the khilippines 
) 
First Regular Session 
) 
S E N A T E  
Introduced I? y Senator Aquilino Q. Pinzentel, Jr. 
EXPLANATORY NOTE 
A cooperative bank is one which is organized, owned and controlled by 
cooperative organizations, for the purpose of providing financial and credit 
services to cooperatives and their members. Its members are either regular or 
associate. Oidy cooperative organizations that hold common shares may be 
regular members. 
Non-cooperative organizations or associations, individual 
members of the bank's member-primary cooperatives, local government units, 
goveriment agencies and government-owned and controlled financial institutions 
holding preferred shares may be associate members. 
The proposed bill provides for the strengthening of the cooperative banking 
system in the country, particularly in rural and remote areas where credit and 
financial services are sorely needed. 
Towards this end, the bill extends a package of incentives, which are at present 
enjoyed by thrift banks under Republic Act No. 7906 and rural banks under 
Republic Act No. 7353. 
Cooperative banks will also be given the following privileges: 
1. The reserve requirement imposed on any cooperative bank by the Monetary 
Board shall enjoy equitable preferential terms over those imposed on any other 
type or class of bank. 
2. Cooperative banks shall have unrestricted branching rights free from any 
stipulation, assessment, or surcharges required in setting up a branch. 
3. A cooperative bank may publish its statement of condition in a newspaper of 
general circulation or a local newspaper covering its area of operations. 
4. The foreclosure of mortgages covering loans granted by a cooperative bank 
and executions of judgments thereon involving real properties and levied upon by 
a Sheriff shall be exempt from publication requirements where the total amount of 
the loan does not exceed P500,OOO.OO. 
5. Cooperative banks will be exempted from the payment of taxes, licenses, fees 
or charges for a period of ten years. 
6. Government agencies and government-owned and controlled financial 
institutions shall give financial and technical assistance to cooperative banks. 


L 
7. 
The Land Bank, Development Bank of 
the Philippines and the 
government-owned and controlled financial institutions may provide funds to 
cooperative banks, whenever necessary at minimal interest rates. 
The measures further allows the modification or relaxation of rules relating to 
certain provisions of Republic Act No. 337 (General Banking Act) to enable said 
banks to participate more fully in government lending programs and extend more 
services to their members. 
In view of the beneficial and significant innovations which the bill will bring to 
the countryside, its immediate passage is requested. 


13t" Congress of the Republic 
) 
of the Philippines 
1 
First Regular Session 
) 
S E N A T E  
Introduced by Senator Aquilino Q. Pimentel, Jr. 
AN ACT 
EXPANDING 
COUNTRYSIDE 
CREDIT 
THROUGH 
COOPERATIVE BANKS AND ENCOURAGING THE GROWTH 
AND 
DEVELOPMENT 
OF 
COOPERATIVE 
BANKS 
BY 
AMENDING CHAPTER XI11 OF REPUBLIC ACT NO. 6938, 
OTHERWISE KNOWN AS THE COOPERATIVE CODE OF THE 
PHILIPPINES, AND FOR OTHER PURPOSES 
SECTION 1. Chapter XI11 of Republic Act No. 6938, otherwise known as 
the Cooperative Code of the Philippines, is hereby amended as follows: 
ART. 99 thereunder on Governing Law is hereby repealed. 
["ART. 99. Goveriung Law. [(I)] The provisions of this Chapter shall 
primarily govern cooperative banks registered under this Code and the other 
provisions of this Code shall apply to them only insofar as they are not inconsistent 
with the provisions contained in this Chapter. 
"[(2) Cooperatives duly established and registered under the provisions of 
this Code may organize among themselves a cooperative bank which shall 
likewise be considered a cooperative registerable under the provisions of this Code 
subject to the requirements of and requisite authorization from the Central Bald<.] 
SEC. 2. Art. 100 is renumbered as Art. 99 and amended by adding new 
provisions therein which read as follows: 


"ART. [loo] 99. [Definition, Classification and Functions. - A cooperative 
bank is one organized by and the majority shares of which is owned and controlled 
by cooperatives primarily to provide financial and credit services to cooperatives. 
The term "cooperative bank" shall include cooperative rural banks. 
"A cooperative bank may perform the following functions: 
(1) To carry on banking and credit services for the cooperatives; 
(2) To receive financial aid or loans from the Government and the Central 
Bank of the Philippines for and in behalf of the cooperative banks and primary 
cooperatives and their federations engaged in business and to supervise the 
lending and collection of loans. 
(3) To mobilize the savings of its members for the benefit of the cooperative 
movement; 
(4) To act as the balancing medium for the surplus funds of cooperatives 
and their federations; 
(5) To discount bills and promissory notes issued and drawn by 
cooperatives; 
(6) To issue negotiable instruments to facilitate the activities of cooperatives; 
(7) To issue debentures subject to the approval of and under conditions and 
guarantees to be prescribed by the Government; 
(8) To borrow money from banks and other financial institutions within the 
limit to be prescribed by the Central Bank; and 
(9) To carry out all other functions as may be prescribed by the Authority: 
Provided, That the performance of any banking function shall be subject to prior 
approval by the Central Bank of the Philippines.] 
DECLARATION OF POLICY. - IN ADDITION TO THE DECLARATION 
OF POLICIES STATED UNDER ARTICLE 2 OF THIS CODE, IT IS HEREBY 
DECLARED THE POLICY OF THE STATE TO: 
(A) RECOGNIZE COOPERATIVE BANKS AS PRACTICAL VEHICLES 
FOR THE PROMOTION OF SELF-RELIANCE AND THE HARNESSING OF 


PEOPLE 
POWER 
TOWARDS 
THE 
ATTAINMENT 
OF 
ECONOMIC 
DEVELOPMENT AND SOCIAL JUSTICE. 
(B) ENCOURAGE AND ASSIST THE GROWTH AND DEVELOPMENT OF 
COOPERATIVE BANKS IN ORDER TO MEET THE REQUIREMENTS OF 
CAPITAL, CREDIT AND CREDIT FACILITIES PRIMARILY FOR THE 
COOPERATIVES AND THEIR MEMBERS; 
(C) ENCOURAGE THRIFT AND SAVINGS MOBILIZATION FOR THE 
ACHIEVEMENT OF SUSTAINABLE ECONOMIC DEVELOPMENT, EQUITY 
AND SOCIAL JUSTICE PRIMARILY AMONG COOPERATIVES AND THEIR 
MEMBERS; AND 
(D) REGULATE AND SUPERVISE THE ACTIVITIES OF COOPERATIVE 
BANKS IN ORDER TO ACHIEVE SOUND, §TABLE AND EFFICIENT 
OPERATIONS FOR THE PROTECTION OF THE PUBLIC INTEREST. 
SEC. 3. Art. 101 is hereby repealed and in lieu thereof a new provision 
entitled Definitions of Terms shall be inserted to be known as Art. 100, which shall 
be read as follows: 
"ART. [loll 100. [Registration Requirements. - No entity shall be registered 
by the Cooperative Development Authority as a cooperative bank unless the 
articles of cooperation and by-laws thereof as well as its establishment and 
operation as cooperative have been approved by the Central Bank of the 
Philippines and it satisfies all requirements for registration as a cooperative.] 
DEFINITIONS OF TERMS. - THE FOLLOWING DEFINITIONS SHALL APPLY 
WITHIN THIS CHAPTER: 
(A) "COOPERATIVE BANK" SHALL REFER TO A BANK ORGANIZED 
UNDER THIS CODE, THE MAJORIlY SHARES OF WHICH ARE OWNED AND 
CONTROLLED BY COOPERATIVE ORGANIZATION§, THE PURPOSE OF 
WHICH IS PRIMARILY TO PROVIDE TECHNICAL AND CREDIT SERVICES TO 
COOPERATIVES ANI) THEIR MEMBERS. 
IT SHALL ALSO INCLUDE 


COOPERATIVE RURAL BANKS; 
(B) "BANGKO SENTRAL" SHALL REFER TO THE BANGKO SENTRAL 
NG PILIPINAS (BSP) CREATED UNDER REPUBLIC ACT NO. 147653; 
(C) "MONETARY BOARD" SHALL MEAN THE MONETARY BOARD OF 
THE BANGKO SENTRAL NG PILIPINAS; 
(D) "COOPERATIVE ORGANIZATION" SHALL REFER TO ANY 
COOPERATIVE 
WETHER PRIMARY, 
SECONDARY OR 
TERTIARY, 
REGISTERED UNDER THE PROVISIONS OF THIS CODE AND WITH THE 
COOPERATIVE DEVELOPMENT AUTHORITY; 
(E) "COOPERATIVE DEVELOPMENT AUTHORITY" SHALL REFER TO 
THE AGENCY OF GOVERNMENT MANDATED TO REGULATE AND 
SUPERVISE COOPERATIVES, CREATED UNDER REPUBLIC ACT NO. 6939. 
SEC. 4. Art. 102 is hereby repealed and in lieu thereof a new paragraph to 
be denominated as Art. 101 oil Organization, Membership and Establislment of 
Cooperative Banks shall be inserted, to read as follows: 
"ART. [lo21 101. [Membership. - Membership in a cooperative bank shall 
iizclude only cooperatives and federation of cooperatives]. ORGANIZATION, 
MEMBERSHIP AND ESTABLISHMENT OF COOPERATIVE BANKS. 
SECTION 1. ORGANIZATION. - COOPERATIVE ORGANIZATIONS 
DULY ESTABLISHED AND REGISTERED UNDER THIS CODE MAY 
ORGANIZE A COOPERATIVE BANK, WHICH SHALL LIKWISE 
BE 
CONSIDERED A COOPERATIVE REGISTERABLE UNDER THE PROVISIONS 
OF THIS CODE SUBJECT TO THE REQUIREMENTS AND REQUISITE 
AUTHORIZATION FROM THE BANGKO SENTRAL. 
"SECTION 2. MEMBERSHIP. - MEMBERSHIP IN A COOPERATIVE 
BANK MAY BE DIVIDED INTO REGULAR AND ASSOCIATE MEMBERS. 
REGULAR MEMBERSHIP SHALL BE OPEN ONLY TO COOPERATIVE 
ORGANIZATIONS WHICH ARE HOLDERS OF COMMON SHARES OF THE 


BANK. 
"ASSOCIATE MEMBERS ARE THOSE SUBSCRIBING AND HOLDING 
PREFERRED SHARES OF THE BANK, WHICH MAY INCLUDE BUT ARE NOT 
LIMITED TO THE FOLLOWING: 
(A) NON-COOPERATIVE ORGANIZATIONS OR ASSOCIATIONS; 
(B) INDIVIDUAL MEMBER§ OF THE BANK'S MEMBER- PRIMARY 
COOPERATIVE; AND 
(C) LOCAL GOVERNMENT UNITS, GOVERNMENT AGENCIES AND 
GOVERNMENT-OWNED OR CONTROLLED FINANCIAL INSTITUTIONS. 
"SAMAHANG NAYONS AND MUNICIPAL KATIPUNANS NG MGA 
SAMAHANG NAYONS (MKSNs) WHICH HELD COMMON STOCKS OF 
COOPERATIVE BANKS PRIOR TO THE EFFECTIVITY OF THIS ACT SHALL 
APPLY FOR CONVERSION TO FULL-FLEDGED COOPERATIVE§ IN ORDER 
TO MAINTAIN THEIR STATUS AS REGULAR MEMBERS OF COOPERATIVE 
BANKS: PROVIDED, THAT THEY SHALL NOTIFY THE COOPERATIVE BANK 
CONCERNED OF THEIR INTENTION TO CONVERT WITHIN A PERIOD OF 
'NINETY (90) DAYS FROM THE EFFECTIVITY OF THIS ACT. SAMAHANG 
NAYONS AND MKSNs ARE HEREBY GIVEN A PERIOD OF ONE (1) YEAR 
FROM THE EFFECTIVITY OF THIS ACT TO COMPLETE THEIR CONVERSION 
TO COOPERATIVES. COOPERATIVE BANKS SHALL EXERT REASONABLE 
EFFORTS TO INFORM THEIR MEMBER SAMAHANG NAYONS AND MKSNs 
ABOUT THE REQUIREMENTS SET IN THIS PARAGRAPH UPON THE 
FAILURE OF SAMAHANG NAYONS OR MKSNs TO FINALLY CONVERT OR 
TO GIVE THE NOTICE OF CONVERSION WITHIN THE PRESCRIBED 
PERIODS, THE COOPERATIVE BANK CONCERNED MAY CONVERT THE 
COMMON STOCKS HELD BY SUCH ASSOCIATION§ TO PREFERRED 
SHARES. 
"SECTION 3. ESTABLISHMENT OF COOPERATIVE BANKS. - 
THE 
ARTICLES OF COOPERATION AND BY-LAWS OF ANY COOPERATIVE BANK 


c 
t 
OR ANY AMENDMENT THERETO, SHALL BE REGISTERED ONLY WHEN 
ACCOMPANIED BY A CERTIFICATE OF AUTHORITY ISSUED BY THE 
MONETARY BOARD, UNDER IT§ OFFICIAL SEAL. SUCH CERTIFICATE 
§HALL BE ISSUED IF THE MONETARY BOARD IS SATISFIED FROM THE 
EVIDENCE SUBMITTED TO IT THAT: (A) ALL THE REQUIREMENTS OF 
EXISTING LAWS AND REGULATION§ TO ENGAGED IN BUSINESS FOR 
WHICH THE APPLICANT IS PROPOSED TO BE REGISTERED HAVE BEEN 
COMPLIED WITH; (B) PUBLIC INTEREST AND ECONOMIC CONDITIONS, 
BOTH GENERAL AND LOCAL, JUSTIFY THE AUTHORIZATION, DIRECTION 
AND ADMINISTRATION; AND (C) THE AMOUNT OF CAPITAL, THE 
FINANCING ORGANIZATION, DIRECTION AND ADMINISTRATION, AS 
WELL AS THE INTEGRITY AND RESPONSIBILITY OF THE ORGANIZERS 
AND ADMINISTRATORS REASONABLY ASSURE THE SAFETY OF THE 
INTEREST WHICH THE PUBLIC MAY ENTRUST TO THEM. 
SEC. 5, Art. 103 is hereby amended by denominating it as Art. 102, on 
Administration of Cooperative Banks, and a new paragraph shall be inserted 
therein to read as follows: 
"ART. [lo31 102. [Board of 
Directors.] 
ADMINISTRATION OF 
COOPERATIVE BANKS. 
"SECTION 1. BANK MANAGEMENT. - IN ORDER TO MAINTAIN THE 
QUALITY OF BANI< MANAGEMENT AND ACCORD BETTER PROTECTION 
TO DEPOSITORS AND THE PUBLIC IN GENERAL, THE MONETARY BOARD 
MAY PASS UPON AND REVIEW THE QUALIFICATIONS OF PERSONS WHO 
ARE ELECTED OR 
APPOINTED BANK DIRECTORS AND OFFICERS, AND DISQUALIFY THOSE 
UNFIT. THE MONETARY BOARD SHALL PRESCRIBE THE QUALIFICATIONS 
OF BANK DIRECTORS AND OFFICERS FOR PURPOSES OF THIS SECTION, 
GIVING DUE RECOGNITION TO THE UNIQUE COOPERATIVE NATURE 


AND CHARACTER OF COOPERATIVE BANKS. 
"SECTION 2. Board of Directors. - The number, composition, and voting 
rights of the Board of Directors shall be defined in the articles of cooperation and 
by-laws of the cooperative bank, notwithstanding provisions of this Code to the 
contrary. 
"EX OFFICIO MEMBERSHIP IN THE BOARD OF DIRECTORS OF A 
COOPERATIVE BANK SHALL BE SUBJECT TO THE APPROVAL OF THE 
BANI<'S BOARD OF DIRECTORS. 
I 
SEC. 6. Art. 104 shall be denominated as Art. 103, and shall enumerate the 
powers, functions and allied undertakings of cooperative banks, to read as follows: 
, 
"ART. [lo41 103. [Loans. - Cooperatives may obtain loans from a cooperative 
bank. Loans granted by a cooperative bank shall be reported to the Central Bank 
I 
of the Plulippines.] POWERS, FUNCTIONS AND ALLIED UNDERTAKINGS OF 
COOPERATIVE BANKS. 
I 
I 
"SECTION 1. POWERS AND FUNCTIONS. - COOPERATIVE BANKS 
I 
SHALL PRIMARILY PROVIDE FINANCIAL, BANKING AND CREDIT 
SERVICES TO COOPERATIVE ORGANIZATIONS AND THEIR MEMBERS. 
I 
"IN ADDITION TO THE POWERS GRANTED BY THIS CODE AND 
OTHER EXISTING LAWS, ANY COOPERATIVE BANK MAY: 
(A) ACCEPT SAVINGS AND TIME DEPOSITS; 
(B) MOBILIZE SAVINGS FOR THE BENEFIT OF THE COOPERATIVE 
MOVEMENT; 
(C) RECEIVE FINANCIAL AID OR LOANS FROM THE GOVERNMENT 
AND THE BANGKO SENTRAL FOR AND IN BEHALF PRIMARILY OF THE 
COOPERATIVE BANKS AND COOPERATIVE ORGANIZATIONS ENGAGED 
IN BUSINESS AND SUPERVISE THE LENDING AND COLLECTION OF 
LOANS; 
(D) ACT AS A BALANCING MEDIUM FOR THE SURPLUS FUNDS OF 


COOPERATIVE ORGANIZATIONS; 
(E) ISSUE NEGOTIABLE INSTRUMENTS TO FACILITATE THE 
ACTIVITIES OF COOPERATIVE ORGANIZATIONS; 
(F) ISSUE DEBENTURES SUBJECT TO THE APPROVAL OF AND UNDER 
CONDITIONS 
AND 
GUARANTEES TO 
BE 
PRESCRIBED 
BY 
THE 
GOVERNMENT; 
(G) BORROW MONEY 
INSTITUTIONS WITHIN THE 
SENTR AL; 
FROM BANKS AND OTHER FINANCIAL 
LIMIT TO BE PRESCRIBED BY THE BANGKO 
(H) OPEN CURRENT AND CHECKING ACCOUNTS: PROVIDED, THAT 
THE COOPERATIVE BANK HAS NET ASSETS OF AT LEAST FIVE MILLION 
PESOS (P5,000,000.00), SUBJECT TO SUCH GUIDELINES AS MAY BE 
ESTABLISHED BY THE MONETARY BOARD; AND SHALL BE ALLOWED TO 
DIRECTLY CLEAR ITS DEMAND DEPOSIT OPERATIONS WITH THE 
BANGKO SENTRAL AND/OR 
THE PHILIPPINE CLEARING HOUSE 
CORPORATION; 
(I) ACT AS CORRESPONDENT FOR OTHER FINANCIAL INSTITUTIONS; 
(J) ACT AS COLLECTION AGENT FOR GOVERNMENT ENTITIES, 
INCLUDING BUT NOT LIMITED TO THE BUREAU OF INTERNAL REVENUE, 
THE SOCIAL SECURITY SYSTEM AND THE BUREAU OF CUSTOMS; 
(I<) ACT AS OFFICIAL DEPOSITORY OF NATIONAL AGENCIES, AND OF 
MUNICIPAL, CITY OR PROVISION GOVERNMENT UNITS IN THE 
MUNICIPALITY, CITY OR PROVINCE WHERE THE COOPERATIVE BANK IS 
LOCATED, SUBJECT TO SUCH GUIDELINES AS MAY BE ESTABLISHED BY 
THE MONETARY BOARD; 
(L) DISCOUNT AND REDISCOUNT PAPER WITH PRIVATE OR 
GOVERNMENT FINANCIAL INSTITUTIONS; 
(M) ISSUE MORTGAGE AND CHATTEL MORTGAGE CERTIFICATES, 
BUY AND SELL THEM FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF 


c 
OTHERS, OR ACCEPT OR RECEIVE THEM IN PAYMENT FOR OR 
AMORTIZATION OF ITS LOAN; 
(N) PURCHASE, HOLD AND CONVEY REAL ESTATE UNDER THE 
SAME CONDITIONS AS THOSE GOVERNING COMMERCIAL BANKS AS 
SPECIFIED UNDER SECTION 25 OF REPUBLIC ACT NO. 337, AS AMENDED; 
(0) ENGAGE IN QUASI-BANKING MONEY MARKET OPERATIONS; 
(P) OPEN LETTERS OF CREDIT AND BANK DRAFTS; 
(Q) EXTEND CREDIT FACILITIES TO PRIVATE AND GOVERNMENT 
EMPLOYEES: PROVIDED, THAT IN CASE OF A BORROWER W O  IS A 
PERMANENT EMPLOYEE OR WAGE EARNER, THE TREASURER, CASHIER 
OR PAYMASTER OR THE OFFICE EMPLOYING HIM IS AUTHORIZED, 
NOTWITHSTANDING THE PROVISIONS OF ANY EXISTING LAW, RULES OR 
REGULATIONS TO THE CONTRARY, TO MAKE DEDUCTIONS FROM HIS 
SALARY, WAGE OR INCOME PURSUANT TO THE TERMS OF HIS LOAN, TO 
REMIT DEDUCTIONS TO THE COOPERATIVE BANK CONCERNED, AND 
COLLECT SUCH REASONABLE FEES FOR HIS SERVICES; 
(R) EXTEND CREDIT AGAINST THE SECURITY OF JEWELRY, 
PRECIOUS STONES AND ARTICLES OF SIMILAR NATURE, SUBJECT TO 
SUCH RULES AND REGULATIONS AS THE MONETARY BOARD MAY 
PRESCRIBE; AND 
(S) OFFER OTHER BANKING SERVICES AS PROVIDED UNDER 
SUBSECTIONS (H), 
(J), (K), (M) AND (0) OF THIS SECTION ONLY UPON 
PRIOR APPROVAL OF THE MONETARY BOARD. 
"NOTHING IN THIS SECTION SHALL BE CONSTRUED AS PRECLUDING 
A COOPERATIVE BANK FROM PERFORMING, WITH PRIOR APPROVAL OF 
THE MONETARY BOARD, COMMERCIAL BANKING SERVICES, OR FROM 
OPERATING UNDER AN EXPANDED BANKING AUTHORITY, OR FROM 
EXERCISING, WHENEVER APPLICABLE AND NOT INCONSISTENT WITH 
THE PROVISIONS OF THIS ACT AND BANGKO SENTRAL REGULATIONS, 


SUCH OTHER POWERS INCIDENT TO A CORPORATION. 
"SECTION 2. INVESTMENT IN ALLIED UNDERTAKINGS. - 
SUBJECT 
TO SUCH GUIDELINES AS MAY BE ESTABLISHED BY THE MONETARY 
BOARD, COOPERATIVE BANKS MAY INVEST IN EQUITIES OF ALLIED 
UNDERTAKINGS A§ HEREINAFTER ENUMERATED: PROVIDED, THAT (A) 
THE TOTAL INVESTMENT IN EQUITIES SHALL NOT EXCEED TWENTY-FIVE 
PERCENT (25%) OF THE NET WORTH OF THE COOPERATIVE BANK; (B) THE 
EQUITY INVESTMENT IN ANY SINGLE ENTERPRISE SHALL BE LIMITED TO 
FIFTEEN PERCENT (15%) OF THE NET WORTH OF THE COOPERATIVE 
BANK; AND (C) THE EQUITY INVESTMENT IN OTHER BANKS §HALL BE 
SUBJECT TO THE SAME PROVISION§ GOVERNING SIMILAR INVESTMENT 
OF COMMERCIAL BANKS AND SHALL BE DEDUCTED FROM THE 
INVESTING BANK'S NET WORTH FOR THE PURPOSE OF COMPUTING THE 
PRESCRIBED RATIO AS PROVIDED IN SECTION 2, ARTICLE 106 HEREOF: 
PROVIDED, FURTHER, THAT EQUITY INVESTMENTS SHALL NOT BE 
PERMITTED IN NON-RELATED ACTIVITIES, WHERE THE ALLIED ACTIVITY 
IS A WHOLLY OR MAJORITY-OWNED SUBSIDIARY OF THE COOPERATIVE 
BANK, THE BANGKO SENTRAL MAY SUBJECT IT TO EXAMINATION. 
"INVESTMENT IN ALLIED 
UNDERTAKING§ 
SHALL 
INCLUDE 
ENGAGING IN THE FOLLOWING ACTIVITIES: 
(A) BANKING AND FINANCING; 
(B) WAREHOUSING AND OTHER POST-HARVEST ACTIVITIES; 
(C) FERTILIZER AND AGRICULTURAL CHEMICAL AND PESTICIDE 
DISTRIBUTION; 
(D) FARM EQUIPMENT DISTRIBUTION; 
(E) MARKETING OF AGRICULTURAL PRODUCT§; 
(F) LEASING; AND 
(G) OTHER UNDERTAKINGS AS MAY IS DETERMINED BY THE 
MONETARY BOARD. 


t 
"SECTION 3. 
LIMITATIONS ON LENDING 
AUTHORITY. 
- 
COOPERATIVE ORGANIZATIONS, THEIR MEMBERS, AND THE BANK'S 
DEPOSITORS MAY OBTAIN LOANS FROM A COOPERATIVE BANK, SUBJECT 
TO SUCH LIMITATIONS AS MAY BE PROVIDED FOR BY THE BANGKO 
SENTRAL. 
"EXCEPT AS THE MONETARY BOARD MAY OTHERWISE PRESCRIBE, 
THE DIRECT INDEBTEDNESS TO COOPERATIVE BANK OR ANY PERSON OR 
ASSOCIATION, EXCEPT COOPERATIVE ORGANIZATIONS, FOR MONEY 
BORROWED, EXCLUDING: (A) LOANS SECURED BY OBLIGATIONS OF THE 
BANGKO 
SENTRAL; 
(B) 
LOANS 
FULLY 
GUARANTEES 
BY 
THE 
GOVERNMENT AS TO THE PAYMENT OF PRINCIPAL AND INTEREST; (C) 
LOANS TO THE EXTENT COVERED BY THE HOLD-OUT, OR ASSIGNMENT 
OF DEPOSITS MAINTAINED IN THE PHILIPPINES; 
(D) LOANS TO 
COOPERATIVE ORGANIZATIONS FOR THEIR MEMBERS FROM FUNDS 
PASSED THROUGH THE COOPERATIVE BANK AS A CONDUIT IN ANY 
PRIVATE OR GOVERNMENT LENDING PROGRAM; 
AND (E) 
OTHER 
LOANS OR CREDIT AS THE MONETARY BOARD MAY, FROM TIME TO 
TIME, SPECIFY AS NON-RISK ASSETS, SHALL AT NO TIME EXCEED FIFTEEN 
PERCENT (15%) OF THE UNIMPAIRED CAPITAL AND SURPLUS OF THE 
COOPERATIVE BANK. 
"NOTWITHSTANDING THE PROVISIONS OF THE 
PRECEDING 
PARAGRAPH 
AND SUBJECT TO SUCH RGULATIONS THAT THE 
MONETARY BOARD MAY PRESCRIBE, THE TOTAL INDEBTEDNESS OF ANY 
BORROWER TO THE COOPERATIVE BANK ANY AMOUNT TO A FURTHER 
FIFTEEN PERCENT (15%) OF THE UNIMPAIRED CAPITAL AND SURPLUS OF 
SUCH BANI<: PROVIDED, THAT THE ADDITIONAL INDEBTEDNESS IS FOR 
THE 
PURPOSE 
OF 
FINANCING 
A 
SUBDIVISION 
OR 
HOUSING 
DEVELOPMENT MEDIUM-INCOME OR LOW-INCOME BORROWERS, OR 
AGRICULTURE, ON A FULLY SECURED BASIS. 


"THE MONETARY BOARD MAY REGULATE THE AMOUNT OF CREDIT, 
ACCOMMODATIONS 
THAT 
MAY 
BE 
EXTENDED, 
DIRECTLY 
OR 
INDIRECTLY, BY COOPERATIVE BANKS TO THEIR DIRECTORS, OFFICERS 
OR 
SHAREHOLDERS. 
HOWEVER, 
THE 
OUTSTANDING 
CREDIT 
ACCOMMODATIONS WHICH A COOEERATIVE BANK MAY EXTEND TO 
EACH OF ITS DIRECTORS, OFFICERS O@ SHAREHOLDERS, EXCEPT MEMBER 
COOPERATIVE-SHAREHOLDERS, SHALL BE LIMITED TO AN AMOUNT 
EQUIVALENT TO THE RESPECTIVE OUTSTANDING DEPOSITS AND BOOK 
I 
VALUE OF THEIR PAID-IN CAPITAL CO~TRIBUTION 
IN THE BANK. 
1 
"THE MONETARY BOARD MAY RRESCRIBE APPROPRIATE CEILINGS 
AND CONDITIONS ON BORROWING OF A COOPERATIVE ORGANIZATION 
FROM A COOPERATIVE BANK. 
I 
~ 
I 
SEC. 7. Art. 105 shall be renumber4d as Art. 104 and shall be amended to 
j 
read as follows: 
! 
"ART. [lo51 104. SUPERVISION OF !2OOPERATIVE BANKS. 
I 
SECTION 1. Supervision. - The cboperative banks registered under this 
Code shall be under the supervision of thk [Central Bank] BANGKO SENTRAL. 
The [Central Bank] BANGKO SENTRAL, THROUGH THE MONETARY BOARD, 
upon consultation with the [agency] COOPERATIVE DEVELOPMENT 
I 
AUTHORITY and the NATIONAL qEDERATIONS AND UNIONS OF 
cooperative (movement), shall formulate ORDERS, INSTRUCTIONS, RULES AND 
REGULATIONS, AND guidelines regarding the operation and banking 
traixactions of cooperative banks. [These] SUCH ORDERS, INSTRUCTIONS, 
RULES AND REGULATIONS, AND guidhlines shall give due recognition to the 
unique cooperative nature and character1 of cooperative banks. To this end, 
cooperative banks may be exempted fro4 [Central Bank] BANGKO SENTRAL 
rules and regulations, applicable to our types of banks, which would impede the 
cooperative [rural] bank from performing Ikgitimate financial and banking services 
I 
i 
~ 
I 
I 


to its members. 
"SECTION 2. POWER OF THE BANGKO SENTRAL OVER COOPERATIVE 
BANKS. - THE BANGKO SENTRAL SHALL HAVE THE POWER TO ENFORCE 
THE LAWS, ORDERS, INSTRUCTIONS, RULES AND REGULATIONS 
PROMULGATED 
BY 
THE 
MONETARY 
BOARD 
APPLICABLE 
TO 
COOPERATIVE BANKS; TO REQUIRE COOPERATIVE BANKS, THEIR 
DIRECTORS, OFFICERS AND AGENTS TO CONDUCT AND MANAGE THE 
AFFAIRS OF THE COOPERATIVE BANK IN A LAWFUL AND ORDERLY 
MANNER; AND UPON PROOF THAT THE COOPERATIVE BANK OR ITS 
BOARD OF DIRECTORS OR OFFICERS ARE CONDUCTING AND MANAGING 
THEIR AFFAIRS OF THE BANK IN A MANNER CONTRARY TO LAWS, 
ORDERS, INSTRUCTIONS, RULES AND REGULATIONS PROMULGATED BY 
THE MONETARY BOARD OR IN A MANNER SUBSTANTIALLY PREJUDICIAL 
TO THE INTEREST OF THE GOVERNMENT, DEPOSITORS, CREDITORS OR 
THE GENERAL PUBLIC, TO APPOINT A CONSERVATOR PURSUANT TO 
SECTION 29 OR REPUBLIC ACT NO. 7653 WITHOUT PREJUDICE TO THE 
PROSECUTION OF PERSONS RESPONSIBLE FOR 
SUCH VIOLATIONS 
UNDER THE PROVISIONS OF SECTIONS AND 737 OF REPUBLIC ACT NO. 
7653. 
"THE DIRECTOR AND EXAMINER OF THE DEPARTMENT OF THE 
BANGKO SENTRAL CHARGED WITH THE SUPERVISION OF COOPERATIVE 
BANI<S ARE HEREBY AUTHORIZED TO ADMINISTER OATHS TO ANY 
DIRECTOR, OFFICER OR EMPLOYEE OF ANY COOPERATIVE BANI< OR TO 
ANY VOLUNTARY WITNESS, AND TO COMPEL THE PRESENTATION OF 
ALL BOOKS, DOCUMENTS, PAPERS, OR RECORDS NECESSARY TO 
ASCERTAIN THE FACTS RELATIVE TO THE TRUE CONDITION OF ANY 
COOPERATIVE BANK OR TO ANY LOAN EXTENDED. 
SEC. 8. Art. 106 shall be renumbered as Art. 105 and shall be amended to 


4 
, read as follows: 
"ART. [lo61 105. CAPITALIZATION AND CAPITAL REQUIREMENTS OF 
COOPERATIVE BANKS. 
"SECTION 1. Capitalization. - (1) A national cooperative bank shall have a 
minimum authorized share capital of Two hundred million pesos (P200,000,000.00) 
in relation to Article 14(5). The authorized share capital shall be divided into such 
number of shares with a minimum par value of One thousand pesos (f1,000.00) 
per share. For the purpose of primarily determining the permanency of equity, the 
types of shares a cooperative bank may issue, including the terms thereof, and the 
rights appurtenant; thereto, shall be subject to such rules and regulations as the 
[Central Bank] BANGKO SENTRAL may prescribe. 
"(2) A local cooperative bank shall have a minimum Twenty million pesos 
(P20,000,000.00) divided into such number of shares with a minimum par value of 
One hundred pesos (PlOO.00) per share. 
"(3) THE LAND BANK OF THE PHILIPPINES (LBP) SHALL SUBSCRIBE 
TO AT LEAST TWENTY PERCENT (20%) OF THE PREFERRED SHARES OF A 
COOPERATIVE BANK. OTHER GOVERNMENT-OWNED AND CONTROLLED 
FINANCIAL INSTITUTIONS MAY ALSO SUBSCRIBE TO THE PREFERRED 
SHARES OF A COOPERATIVE BANK. HOWEVER, SUCH SUBSCRIPTIONS OF 
THE LBP AND OTHER GOVERNMENT-OWNED AND CONTROLLED 
FINANCIAL INSTITUTIONS SHALL BE SUBJECT TO THE APPROVAL OF THE 
BANK'S BOARD OF DIRECTORS. SUCH CAPITAL INFUSION SHALL BE 
CONSIDERED AS PARTIAL COMPLIANCE BY THE GOVERNMENT-OWNED 
AND CONTROLLED FINANCIAL INSTITUTIONS CONCERNED WITH THE 
PROVISIONS OF PRESIDENTIAL DECREE NO. 717, OTHERWISE KNOWN AS 
THE AGRI-AGRA LAW. THE SHARES HELD BY GOVERNMENT FINANCIAL 
INSTITUTIONS SHALL BE PAID OFF AT PAR AND RETIRED IN WHOLE OR 
IN PART WHEN THE COOPERATIVE BANK HAS ACQUIRED ENOUGH 
CAPITAL STRENGTH TO PERMIT RETIREMENT OF SUCH SHARES, 


"(4) THE AGRICULTURAL CREDIT POLICY COUNCIL (ACPC), 
THORUGH ITS EXECUTIVE DIRECTOR, THE COOPERATIVE DEVELOPMENT 
AUTHORITY (CDA), THROUGH ITS BOARD OF ADMINISTRATORS, AND 
OTHER GOVERNMENT-OWNED AND CONTROLLED NON-FINANCIAL 
INSTITUTIONS WITH LOANING AND DEVELOPMENT FUNCTIONS AND 
PROGRAMS, THROUGH THEIR APPROPRIATE AUTHORITIES, MAY UTILIZE 
FUNDS SUCH AS THE COMPREHENSIVE AGRICULTURAL LOAN FUND 
(CALF), THE COOPERATIVE DEVELOPMENT LOAN FUND (CDLF), THE 
COOPERATIVE MARKETING PROJECT FUND (CMPF) AND OTHER FUNDS 
EXISTING OR HEREINAFTER CREATED UNDER THEIR RESPECTIVE 
ADMINISTRATIONS TO SUBSCRIBE TO THE PREFERRED SHARES OF A 
COOPERATIVE BANK THROUGH THE CONVERSION OF THE LIABILITIES 
OF BANK DUE TO THESE INSTITUTIONS INTO PREFERRED SHARE§ 
AND/OR FRESH CAPITAL INFUSION SUBJECT TO MUTUAL AGREEMENT 
OF THE PARTIES: PROVIDED, THAT SUCH PREFERRED SHARES HELD BY 
SUCH NON- FINANCIAL INSTITUTION SHALL BE RETIRED IN WHOLE OR 
IN PART AT BOOK VALUE WHEN THE COOPERATIVE BANK HAS 
ACQUIRED ENOUGH CAPITAL STRENGTH TO PERMIT THE RETIREMENT 
OF SUCH SHARES: PROVIDED, FURTHER, THAT THE ACPIC, THE CDA 
AND 
THE 
OTHER 
GOVERNMENT 
OWNED 
AND 
CONTROLLED 
NON-FINANCIAL INSTITUTIONS MAY UTILIZE EARNINGS DERIVED FROM 
SUCH BASIC SOURCE FUNDS SUCH AS CALF, CDLF, CMPF AND OTHER 
FUNDS 
CREATED 
UNDER 
THEIR 
ADMINISTRATION 
FOR 
INSTITUTION-BUILDING, CREDIT AND CREDIT-RELATED PROGRAMS AND 
ACTIVITIES. 
"SECTION 2. COMBINE CAPITAL ACCOUNTS. - THE COMBINED 
CAPITAL ACCOUNTS OF EACH COOPERATIVE BANK SHALL NOT BE LESS 
THAN AN AMOUNT EQUAL TO TEN PERCENT (10%) OF ITS RISK ASSETS, 
WHICH IS DEFINED AS ITS TOTAL ASSETS MINUS THE FOLLOWING 


ASSETS: 
(A) CASH ON HAND; 
(B) AMOUNTS FROM THE BANGKO SENTRAL; 
(C) EVIDENCES OF INDEBTEDNESS OF THE REPUBLIC OF THE 
PHILIPPINES, AND OF THE BANGKO SENTRAL, AND ANY OTHER 
EVIDENCES OF INDEBTEDNESS OR OBLIGATIONS THE SERVICING AND 
REPAYMENT OF WHICH ARE FULLY GUARANTEED BY THE REPUBLIC OF 
THE PHILIPPINES; 
(D) LOANS TO THE EXTENT COVERED BY HOLD-OUT ON, OR 
ASSIGNMENT OF DEPOSITS MAINTAINED IN, THE LENDING BANK AND 
HELD IN THE PHILIPPINES; AND 
(E) OTHER NON-RISK ITEMS AS THE MONETARY BOARD MAY, 
FROM TIME TO TIME, AUTHORIZE TO BE DEDUCTED FROM TOTAL 
ASSETS. 
"THE MONETARY BOARD SHALL PRESCRIBE THE MANNER OF 
DETERMINING THE TOTAL ASSETS OF COOPERATIVE BANKS FOR 
PURPOSES OF THIS SECTION. 
"WHENEVER THE CAPITAL ACCOUNTS OF A COOPERATIVE BANK 
ARE DEFICIENT WITH RESPECT TO THE REQUIREMENTS OF THE 
PRECEDING PARAGRAPH, THE MONETARY BOARD, AFTER CONSIDERING 
THE REPORT OF THE APPROPRIATE SUPERVISING DEPARTMENT ON THE 
STATE OF SOLVENCY OF THE INSTITUTION, SHALL LIMIT OR PROHIBIT 
THE DISTRIBUTION OF NET PROFITS AND SHALL REQUIRE THAT PART OR 
ALL OF THE NET PROFITS BE USED TO INCREASED THE CAPITAL 
ACCOUNTS OF THE INSTITUTION UNTIL THE MINIMUM REQUIREMENT 
HAS BEEN MET. 
THE MONETARY BOARD MAY, AFTER CONSIDERING 
THE 
AFORESAID 
REPORT 
OF 
THE 
APPROPRIATE 
SUPERVISING 
DEPARTMENT AND IF THE AMOUNT OF THE DEFICIENCY JUSTIFIES IT, 
RESTRICT OR PROHIBIT THE MAKING OF NEW INVESTMENT OF ANY SORT 
BY THE BANI<, WITH THE EXCEPTION OF PURCHASES OF EVIDENCES OF 


c 
INDEBTEDNESS INCLUDED UNDER SUBSECTION (C) OF THIS SECTION, 
UNTIL THE MINIMUM REQUIRED CAPITAL RATIO HAS BEEN RESTORED. 
"WHEN IN THE PROCESS OF A BANK MERGER OR CONSOLIDATION, 
THE MERGED OR CONSTITUENT BANK MAY NOT BE ABLE TO COMPLY 
FULLY WITH THE NET WORTH TO RISK ASSET RATION HEREIN 
PRESCRIBED, THE MONETARY BOARD MAY, AT ITS DISCRETION, 
TEMPORARILY RELIEVE THE BANK FROM FULL COMPLIANCE WITH THIS 
REQUIREMENT UNDER SUCH CONDITIONS IT MAY PRESCRIBE. 
SEC. 9. Art. 107 shall be renumbered as Art. 106 and shall be amended to 
read as follows: 
"ART. [107] 106. [Distribution of Net Surplus. - The provisions of this Code 
on the allocation of net surplus shall apply.] PROHIBITED ACTS. - WITHOUT 
PREJUDICE TO ANY PROSECUTION UNDER ANY LAW WHICH MAY HAVE 
BEEN VIOLATED, A FINE OF NOT MORE THAN TEN THOUSAND PESOS (P 
10,000.00) OR IMPRISONMENT OF NOT LESS THAN SIX (6) MONTHS BUT 
NOT MORE THAN TEN (10) YEARS, OR BOTH, AT THE DISCRETION OF THE 
COURT, SHALL BE IMPOSED UPON: 
(A) ANY OFFICER, EMPLOYEE OR AGENT OF A COOPERATIVE BANK 
WHO SHALL: 
1. MAKE FALSE ENTRIES IN ANY BANK REPORT OR STATEMENT 
THEREBY AFFECTING THE FINANCIAL INTEREST OF, OR CAUSING 
DAMAGE TO THE BANK OR TO ANY PERSON; OR 
2. WITHOUT ORDER OF A COURT OF COMPETENT JURISDICTION, 
DISCLOSE ANY INFORMATION RELATIVE TO THE FUNDS OR PROPERTIES 
IN THE CUSTODY OF A COOPERATIVE BANK; OR 
3. ACCEPT GIFTS, FEES OR COMMISSIONS OR ANY OTHER FORM OF 
REMUNERATION IN CONNECTION WITH THE APPROVAL OF A LOAN 
FROM SAID BANK; OR 


i 
A 
4. OVERVALUE OR AID IN THE OVERVALUING OF ANY SECURITY 
FOR THE PURPOSE OF INFLUENCING IN ANY WAY THE ACTION OF THE 
BANK ON ANY LOAN; OR 
5. APPEAR AND SIGN AS GUARANTOR, INDORSER, OR SURETY OR 
LOANS GRANTED; OR 
6. VIOLATE ANY PROVISIONS OF THIS CODE; 
(B) ANY APPLICANT FOR LOAN OR BORROWER OF A COOPERATIVE 
BANK WHO SHALL: 
(1) MISUSE, MISAPPLY OR DIVERT THE PROCEEDS OF A LOAN 
OBTAINED BY HIM FROM ITS DECLARED PURPOSE; OR 
(2) FRAUDULENTLY OVERVALUE PROPERTY OFFERED AS SECURITY 
FOR A LOAN FROM SAID BANK; OR 
(3) GIVE OUT OR FURNISH FALSE STATEMENTS OR WILLFULLY 
MISREPRESENT OR CONCEAL MATERIAL FACTS FOR THE PURPOSE OF 
OBTAINING, RENEWING, OR INCREASING A LOAN OR EXTENDING THE 
PERIOD THEREOF; OR 
(4) ATTEMPT TO DEFRAUD THE COOPERATIVE BANK IN THE EVENT 
OF COURT ACTION TO RECOVER THE LOAN; OR 
(5) OFFER ANY OFFICER, EMPLOYEE OR AGENT OF THE 
COOPERATIVE BANK A GIFT, FEE, COMMISSION OR OTHER FORMS OF 
COMPENSATION IN ORDER TO INFLUENCE SUCH BANK PERSONNEL 
INTO APPROVING A LOAN APPLICATION; OR 
(6) DISPOSE OF ENCUMBER THE PROPERTY OFFERED AS SECURITY 
FOR A LOAN; AND 
(C) ANY EXAMINER, OR OTHER OFFICER OR EMPLOYEE OF THE 
BANGKO SENTRAL OR OF ANY DEPARTMENT, BUREAU, OFFICE, BRANCH 
OR AGENCY OF THE GOVERNMENT WHO IS ASSIGNED TO EXAMINE, 
SUPERVISE, ASSIST OR RENDER TECHNICAL SERVICE TO COOPERATIVE 
BANKS WHO SHALL CONNIVE OR AID IN THE COMMISSION OF THE ACTS 


PROHIBITED IN THIS ARTICLE. 
"ANY METROPOLITAN, MUNICIPAL, OR MUNICIPAL CIRCUIT TRIAL 
COURT JUDGE OR REGISTER OF DEEDS WHO SHALL DEMAND OR ACCEPT, 
DIRECTLY OR INDIRECTLY, ANY GIFT, FEE, COMMISSION, OR ANY OTHER 
FORM OF COMPENSATION IN CONNECTION WITH THE SERVICE, OR 
SHALL ARBITRARILY AND WITHOUT REASONABLE CAUSE DELAY THE 
ACKNOWLEDGEMENT OR ADMINISTRATION OF AN OATH, OR THE 
REGISTRATION OF DOCUMENTS REQUIRED TO BE PERFORMED BY SAID 
JUDGE OR SAID REGISTER OF DEEDS SHALL BE PUNISHED WITH A FINE OF 
NOT 
MORE 
THAN 
ONE THOUSAND 
PESOS 
(P1,OOO.OO) 
OR 
BY 
IMPRISONMENT OF NOT MORE THAN ONE (1) YEAR, OR BOTH, AT THE 
DISCRETION OF THE COURT. 
"ANY BANK NOT ORGANIZED AND REGISTERED UNDER THIS CODE, 
AND ANY PERSON, ASSOCIATION OR CORPORATION DOING THE 
BUSINESS OF BANKING, NOT AUTHORIZED UNDER THIS CODE OR 
EXISTING LAWS, WHICH SHALL USE THE WORDS "COOPERATIVE BANK" 
AS PART OF ITS NAME OR TITLE AS SUCH BANK OR SUCH PERSON, 
ASSOCIATION OR CORPORATION SHALL BE PUNISHED BY A FINE OF NOT 
LESS THAN ONE HUNDRED PESOS (HOO.00) BUT IN NO CASE TO EXCEED 
THIRTY THOUSAND PESOS (f30,000.00) FOR EACH DAY DURING WHICH 
THE SAID WORDS ARE SO USED. 
"SECTION 5. PRIVILEGES. - IN ADDITION TO THE PRIVILEGES 
GENERALLY GRANTED TO COOPERATIVES UNDER THIS CODE, A 
COOPERATIVE BANK SHALL ALSO BE EXEMPTED FROM THE PAYMENT OF 
ALL TAXES, LICENSES, FEES AND CHARGES OF WHATEVER TYPE, NATURE 
AND DESCRIPTION, WHETHER NATIONAL OR LOCAL, FOR A PERIOD OF 
TEN YEARS FROM THE EFFECTIVITY OF THESE AMENDMENTS TO THE 
COOPERATIVE CODE OR FROM THE DATE OR REGISTRATION OF A 
COOPERATIVE 
BANK 
WITH 
THE 
COOPERATIVE 
DEVELOPMENT 


*' 
1 
AUTHORITY, WICHEVER COMES LATER. 
SEC. 10. Art. 109 is hereby amended to read as follows: 
"ART. 109. Assistance to Cooperative Banks. 
"SECTION 1. GENERAL. 
- 
IN ACCORDANCE WITH EXISTING 
POLICIES, GOVERNMENT AGENCIES, GOVERNMENT- OWNED OR 
CONTROLLED CORPORATIONS AND FINANCIAL INSTITUTIONS SHALL 
PROVIDE ASSISTANCE, WHETHER TECHNICAL OR FINANCIAL OR 
OTHERWISE, TO COOPERATIVE BANKS TO PERMIT THEM TO GROW, 
DEVELOP AND PERFORM THEIR ROLE IN COUNTRYSIDE DEVELOPMENT 
AND TOWARDS A SUSTAINABLE NATIONAL ECONOMIC DEVELOPMENT. 
"SECTION 2. GOVERNMENT FUNDING. - WHENEVER NECESSARY 
AND NOTWITHSTANDING 
PROVISIONS OF THIS CODE TO THE 
CONTRARY, THE BANGKO SENTRAL, MAY, UPON CONSULTATION WITH 
THE NATIONAL FEDERATIONS AND UNIONS OF COOPERATIVES AND 
THE CDA, AUTHORIZE THE LAND BANK OF THE PHILIPPINES, THE 
DEVELOPMENT BANK OF THE PHILIPPINES, AND OTHER GOVERNMENT 
ORGANIZATIONS AND INSTRUMENTALITIES TO INFUSE FRESH CAPITAL 
INTO COOPERATIVE BANKS, AND TO PROVIDE FUNDS FOR COOPERATIVE 
BANKS AT MINIMAL INTEREST RATES, SUBJECT TO SUCH RULES AND 
REGULATIONS THAT THE BANGKO SENTRAL MAY PROMULGATE FROM 
TIME TO TIME. 
"SECTION 3. 
[Assistance to Cooperative Banks] DISTRESSED 
COOPERATIVE BANKS. - Whenever a cooperative bank organized under this 
Code is distressed or may need assistance in the rehabilitation of its financial 
condition or to avoid bankruptcy, tlie Monetary Board of tlie {Central Bank of the 
Philippines] BANGKO SENTRAL shall designate an official of the [Central Bank] 
BANGKO SENTRAL or a person of recognized competence in banking or finance 


as (receiver or) conservator of the said bank pursuant to the provisions of Section 
29 of Republic Act No. 7653, as amended." 
SEC. 11. Any provision of law, presidential decree or issuance, executive 
order, letter of instruction, rule or regulation, inconsistent with the provisions of 
this Act is hereby repealed, amended or modified accordingly. 
SEC. 12. If any provision of this Act or the application thereof to any 
person or circumstances is held invalid or unconstitutional, the other provisions of 
this Act and the application of such provisions to other persons and circumstances 
shall not be affected thereby. 
SEC. 13. This Act shall take effect fifteen (15) days following its publication 
in at least two (2) national newspapers of general circulation. 
Approved,