Classification of Banks

1. Universal Banks

 large commercial banks that can do both commercial and investment banking
 They have the power of both commercial bank and investment house
 Have the power to invest in non-allied enterprises

2. Commercial banks

 general powers incident of corporation and can perform commercial banking

 Does not have the power to invest in nonallied enterprises

3. Rural banks

 banks that promote rural development

 They can extend loan or advances to primarily meet the normal credit needs of
farmers, fishermen and their families
 Can also deposit in private banks more than the amount prescribed by Single
Borrower’s Limit in case there are no government banks
 Rural Banks Act (RA 7353)

4. Thrift banks
 encourages the industry, frugality and accumulation of savings of the public
 To make it within easy reach to the people the credit facilities at reasonable cost
 Includes: (1) savings and mortgage bank, (2) stock savings and loan associations
and (3) private development banks
 Thrift Banks Act (RA 7906)

5. Cooperative banks
 organized by cooperatives to provide financial and credit services to cooperatives
 No person or entity shall engage in baking operations without authority from
Bangko Sentral
 Cooperative Code (RA 6938)
 Membership of a cooperative bank shall include ONLY cooperative and federations
of cooperatives

6. Islamic Banks
 promote socio-economic development in autonomous region by performing banking
and investment function based on Islamic concept of banking
 Islamic Bank – RA 6848
 Subject to the principles and rulings of Islamic Shari’a

7. Others banks:
 Philippine Veterans Bank – created to provide government depository to veterans for
nappreciation of grateful nation (RA 3518)
  Land bank of the Philippines – finance distribution of estate to resale to small landholders
(RA 3844)
 Development Bank of Philippines – provide credit facilities for development in agriculture,
commerce and industry
 DBP was previously named as Rehabilitation Finance Corporation (RFC)

8. Non-stock savings and loan associations

 nonstock, non-profit corporation engage in accumulation of savings of its members and
loans to meet its members’ needs
 Confines exclusive membership and cannot transact business with the general public

9. Quasi-banks
 engaged in borrowing of funds through issuance of deposit substitute for purpose of
relending or purchasing receivables and other obligations

10. Offshore Banks

 deals with transaction with foreign currencies in receiving funds from external sources and
utilization of such
 Governed by PD 1034