Interest Rate Differential – Refers to the difference of margin between interest rates such as the difference between foreign and domestic interest rates.
Negotiable Order of Withdrawal (NOW) – refers to interest-bearing deposit accounts that combine the payable-on-demand feature of checks and the investment feature of savings account.
- The Equity investment of a Universal Bank or of its wholly or majority-owned subsidiaries in a single non-allied enterprise shall not exceed 35% of the total equity.
- The Right of Offset refers to the right of a collecting bank to debit a client’s account for the value of a dishonored check that has previously been credited.
Demand Deposits – are those liabilities of the Bangko Sentral ng Pilipinas (BSP) and other banks which are denominated in Philippine Currency and are subject to payment in legal tender, upon demand by a presentation of depositor’s check.
- The Rule intended to maintain the quality of bank management and afford better protection to depositors and public in general is called Fit and Proper.
Offshore Banking Unit – refers to a bank, subsidiary or affiliate of a foreign banking corporation which is duly authorized by the Bangko Sentral ng Pilipines (BSP) to transact offshore banking business in the Philippines.
- A bank is bound by the negligence of its employees under the principle of Repondeat Superior. (Command Responsibility)
Quasi-Bank – refers to the entities engaged in the borrowing of funds through the issuance, endorsement, or assignment with recourse or acceptance of deposit substitutes for purposes of re-lending of receivables and other obligation.
- The Business of Banking is imbued with Public Interest in order to assure the stability of banks which largely depends on the confidence of the people in the honesty and efficiency of banks.
- The law governing the creation, organization and operation of Rural Bank is Rural Bank Act.
- The total investment in equities of allied enterprise shall not exceed 50% of the net worth of the bank.
Controlling Stockholder – Shall refer to a corporation or firm more than 50% of the outstanding voting stock of which is directly or indirectly owned.
- The rule that the total amount of loans that may be extended by a bank to any person or entity shall at no time exceed 20% of the net worth of such bank is called Single Borrower’s Limit (SBL).