Rural Act No. 7353
(enacted in 1992)
Rural Act No. 7353 of 1992 facilitates the creation, organization, and operation of rural banks in the Philippines.
The goal of the act is to encourage and assist in the establishment of a rural banking system that would make credit readily available in the rural sector on reasonable terms.
The act states the following:
- A certificate of authority is required from the Monetary Board for rural banks to operate;
- Restrictions exist on a bank to stand as guarantor or as surety for loans from the employee bank or any other banks;
- Purposes for which a loan application could be made, kinds of mortgages that are permissible against different loan amount;
- The powers of the Central Bank of Philippines with regard to the formulation of rules and regulations as well as for enforcement of bank related laws; and
- Details about mergers and consolidation of rural banks in a given area and the incentives for the same.