R.A. No. 6426, Foreign Currency Deposit Act of the Philippines

REPUBLIC ACT NO. 6426
AN ACT INSTITUTING A FOREIGN CURRENCY DEPOSIT SYSTEM IN THE PHILIPPINES, AND FOR OTHER PURPOSES

Section 1. Title. - This Act shall be known the "Foreign Currency Deposit Act of the Philippines."

Section 2. Authority to Deposit Foreign Currencies. - Any person, natural or juridical, may in accordance with the provisions of this Act, deposit with such Philippine banks in good standing, as may, upon application, be designated by the Central Bank for the purpose, foreign currencies which are acceptable as part of the international reserve, except those which are required by the Central Bank to be surrendered in accordance with the provisions of Republic Act Numbered Two hundred sixty-five.

Section 3. Authority of Banks to Accept Foreign Currency Deposits. - The banks designated by the Central Bank under section two hereof shall have the authority:

1) To accept deposits and to accept foreign currencies in trust: provided, that numbered accounts for recording and servicing of said deposits shall be allowed;

2) To issue certificates to evidence such deposits;

3) To discount said certificates;

4) To accept said deposits as collateral for loans subject to such rules and regulations as may be promulgated by the Central Bank from time to time; and

5) To pay interest in foreign currency on such deposits.

Section 4. Foreign Currency Cover Requirements. - Except as the Monetary Board, by a unanimous vote of all incumbent members, may otherwise prescribe or allow, the depository banks shall maintain at all times a one hundred percent foreign currency cover for their deposit liabilities, of which cover at least fifteen seventy-one. Thereafter, such sum as may be necessary for the same purpose shall be included in the annual General Appropriations Act.

Section 5. This Act shall take effect upon its approval.

Approved, April 4, 1972.