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.
Capital Requirements
The various charters require different amounts of minimum capital, as follows:
| Minimum Capital | |
| Type of Bank | PHP mil. |
| a. Universal Banks | 4,950.0 |
| b. Commercial Banks | 2,400.0 |
| c. Thrift Banks | |
| - With head office within Metro Manila | 325.0 |
| - With head office outside Metro Manila | 52.0 |
| d. Rural Banks | |
| - within Metro Manila | 26.0 |
| - Cities of Cebu and Davao | 13.0 |
| - In 1 st , 2 nd & 3 rd class cities and 1 st class municipalities | 6.5 |
| - In 4 th , 5 th & 6 th class cities and in 2 nd , 3 rd & 4 th class municipalities | 3.9 |
| - In 5 th & 6 th class municipalities | 2.6 |