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    RBSM vs. MB Case Digest

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    Caitlin Kintanar
    1) RBSM, a rural bank, declared a bank holiday and closed all its branches without authorization. In response, the Monetary Board (MB) issued a resolution prohibiting RBSM from doing business and placing it under receivership based on reports of its inability to pay debts. 2) RBSM filed petitions to nullify the MB's resolution, which were dismissed. RBSM then filed this petition claiming the MB committed grave abuse of discretion. 3) The Supreme Court ruled that Section 30 of the New Central Bank Act does not require a current and complete examination before closure, and that the MB complied with legal requirements based on reports received. Therefore, the issuance of the

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    RBSM vs. MB Case Digest

    Uploaded by

    Caitlin Kintanar
    106 views2 pages
    1) RBSM, a rural bank, declared a bank holiday and closed all its branches without authorization. In response, the Monetary Board (MB) issued a resolution prohibiting RBSM from doing business and placing it under receivership based on reports of its inability to pay debts. 2) RBSM filed petitions to nullify the MB's resolution, which were dismissed. RBSM then filed this petition claiming the MB committed grave abuse of discretion. 3) The Supreme Court ruled that Section 30 of the New Central Bank Act does not require a current and complete examination before closure, and that the MB complied with legal requirements based on reports received. Therefore, the issuance of the

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    1) RBSM, a rural bank, declared a bank holiday and closed all its branches without authorization. In response, the Monetary Board (MB) issued a resolution prohibiting RBSM from doing business and placing it under receivership based on reports of its inability to pay debts. 2) RBSM filed petitions to nullify the MB's resolution, which were dismissed. RBSM then filed this petition claiming the MB committed grave abuse of discretion. 3) The Supreme Court ruled that Section 30 of the New Central Bank Act does not require a current and complete examination before closure, and that the MB complied with legal requirements based on reports received. Therefore, the issuance of the

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    106 views2 pages

    RBSM vs. MB Case Digest

    Uploaded by

    Caitlin Kintanar
    1) RBSM, a rural bank, declared a bank holiday and closed all its branches without authorization. In response, the Monetary Board (MB) issued a resolution prohibiting RBSM from doing business and placing it under receivership based on reports of its inability to pay debts. 2) RBSM filed petitions to nullify the MB's resolution, which were dismissed. RBSM then filed this petition claiming the MB committed grave abuse of discretion. 3) The Supreme Court ruled that Section 30 of the New Central Bank Act does not require a current and complete examination before closure, and that the MB complied with legal requirements based on reports received. Therefore, the issuance of the

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    RBSM, INC. vs.

    MB

    Facts: and deliberating on the findings and


    recommendation, issued Resolution No. 105.
    Petitioner Rural Bank of San Miguel, Inc. (RBSM)
    Thereafter, PDIC implemented the closure order
    was a domestic corporation engaged in banking.
    and took over the management of RBSMs assets
    On January 21, 2000, respondent Monetary
    and affairs.
    Board (MB), the governing board of Bangko
    On January 31, 2000, petitioners filed a petition
    Sentral ng Pilipinas (BSP), issued Resolution No.
    for certiorari and prohibition in the Regional Trial
    105 prohibiting RBSM from doing business in the
    Court to nullify and set aside Resolution No. 105.
    Philippines, placing it under receivership and
    However, on February 7, 2000, petitioners filed a
    designating Philippine Deposit Insurance
    notice of withdrawal in the RTC and filed a special
    Corporation (PDIC) as receiver on the basis of its
    civil action for certiorari and prohibition in the CA.
    inability to pay its liabilities as they become due
    in the ordinary course of business and In their petition before the CA, petitioners
    continuance in business without involving claimed that respondents MB and BSP committed
    probable losses to its depositors and creditors. grave abuse of discretion in issuing Resolution
    No. 105. The petition was dismissed by the CA
    On January 4, 2000, RBSM declared a bank
    on the basis that the decision of the MB was
    holiday. RBSM and all of its 15 branches were
    based on the findings and recommendations of
    closed from doing business. Alarmed and
    the Department of Rural Banks Supervision and
    disturbed by the unilateral declaration of bank
    Examination Sector, the comptroller reports and
    holiday, BSP wanted to examine the books and
    the declaration of a bank holiday. Such could be
    records of RBSM but encountered problems.
    considered as substantial evidence. Pertinently,
    RBSMs designated comptroller submitted to the
    on June 9, 2000, on the basis of reports prepared
    Department of Rural Banks, BSP, a
    by PDIC, MB passed Resolution No. 966 directing
    Comptrollership Report on her findings on the
    PDIC to proceed with the liquidation of RBSM
    financial condition and operations of the bank.
    under Section 30 of RA 7653.
    Based on these reports, the director of the
    Hence this petition.
    Department of Rural Banks Supervision and
    Examination Sector made a report to the
    Monetary Bank (MB). The MB after evaluating
    Issue: issuance of Resolution No. 105 was untainted
    with arbitrariness.
    WON Section 30 of RA 7653 (also known as the New
    Central Bank Act) and applicable jurisprudence require
    Also, it is well-settled that the closure of a bank
    a current and complete examination of the bank before
    may be considered as an exercise of police
    it can be closed and placed under receivership.
    power. The action of the MB on this matter is final
    and executory. Such exercise may nonetheless
    Ruling:
    be subject to judicial inquiry and can be set aside
    if found to be in excess of jurisdiction or with such
    Section 30 of RA 7653 does not require a current
    grave abuse of discretion as to amount to lack or
    and complete examination of the bank before it
    excess of jurisdiction.
    can be closed and placed under receivership.

    In RA 7653, only a "report of the head of the


    supervising or examining department" is
    necessary. It is an established rule in statutory
    construction that where the words of a statute
    are clear, plain and free from ambiguity, it must
    be given its literal meaning and applied without
    attempted interpretation.

    SC cannot look for or impose another meaning


    on the term "report" or to construe it as
    synonymous with "examination." From the words
    used in Section 30, it is clear that RA 7653 no
    longer requires that an examination be made
    before the MB can issue a closure order.

    Therefore, MB and BSP complied with all the


    requirements of RA 7653. Accordingly, the

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