Amending Further Republic Act Numbered Seven Hundred Twenty, Otherwise Known As The Rural Banks' Act.
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Amending Further Republic Act Numbered Seven Hundred Twenty, Otherwise Known As The Rural Banks' Act.
Presidential Decree No. 1403
June 6, 1978
Case Overview and Summary
Amending the Rural Banks' Act (Republic Act No. 720)Purpose:
- Promote expansion of rural economy by facilitating productive capacities of rural communities.
- Adapt law to changing conditions to better serve credit needs of small farmers, merchants, enterprises, industries, and cooperatives.
Provisions:
- Loans by rural banks shall primarily cater to: (Section 5)
- Small farmers or farm families owning/cultivating up to 50 hectares of agricultural land.
- Cooperatives and small merchants with capital investment up to ₱100,000 or as prescribed by Monetary Board.
- Preference given to farmers and merchants with small cash requirements.
- Loans may be granted on security of lands without Torrens titles if owner can show 5+ years of peaceful, continuous, and uninterrupted possession, or on lands covered by sales contracts with at least 5 years of installments paid. (Section 5)
- Foreclosure of mortgages up to ₱10,000 or as prescribed by Monetary Board is exempt from newspaper publication requirement; posting in 3 conspicuous public places in municipality and barrio is sufficient. (Section 5)
- Homesteaders or free patent holders have right to redeem foreclosed land within 2 years from foreclosure date (non-Torrens title) or registration date (Torrens title). (Section 5)
- Tenants' produce share may be accepted as security. (Section 5)
- Rural banks may devote portion of loanable funds to meet credit needs of small business enterprises with capital investment up to ₱100,000 or as prescribed by Monetary Board, and essential non-agricultural enterprises or industries. (Section 6)
- City or municipal judges shall administer oath or acknowledge instruments of rural banks and borrowers/mortgagors for loans up to ₱10,000 or as prescribed by Secretary of Finance, free from charges, fees, and documentary stamp tax. (Section 16)
- Registers of Deeds shall accept instruments from rural banks and borrowers/mortgagors for registration, free from charges, fees, and documentary stamp tax, for loans up to ₱10,000 or as prescribed by Monetary Board. (Section 17)
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Law
Amending Further Republic Act Numbered Seven Hundred Twenty, Otherwise Known As The Rural Banks' Act.
Presidential Decree No. 1403
•June 6, 1978
MALACAÑANGM a n i l a
PRESIDENTIAL DECREE No. 1403
AMENDING FURTHER REPUBLIC ACT NUMBERED SEVEN HUNDRED TWENTY, OTHERWISE KNOWN AS THE RURAL BANKS' ACT.
WHEREAS, the expansion of the rural economy must be promoted by providing the means of facilitating and improving the productive capacities of the people of the rural communities; and
WHEREAS, the law should adopt to changing conditions in order to attain its objectives and to better serve the credit requirements of small farmers, small merchants, small business enterprises, essential rural enterprises or industries and cooperatives.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree the amendment of Republic Act No. 720, as amended, as follows;
Section 1. Section 5 of Republic Act No. 720, as amended, is hereby to read as follows;
"Sec. 5. Loans or advances extended by Rural Banks organized and operated under this Act, shall be primarily for the purpose of meeting the normal credit needs of any small farmer...
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