Mr. Lino R. Peñaflor

May 15, 1981 Mr. Lino R. Peaflor Cooperative Rural Bank of Lanao del Norte, Inc. Tubod, Lanao del Norte Dear Mr. Peaflor : This refers to your letter dated April 3, 1981 requesting opinion on whether the Cooperative Rural Bank of Lanao del Norte, Inc. may be allowed by this Commission to amend its articles of incorporation for the purpose of reducing its authorized capital stock from P10 M to P5 M for reasons stated in an attached copy of its letter to Director Consolacion V. Odra, Director of the Department of Rural Banks and Savings and Loans Associations. It appears that subject corporation is a cooperative rural bank which falls within the exclusive jurisdiction of the Central Bank of the Philippines. As such, the application for the projected decrease in its authorized capital stock has already been referred to said government agency. Consequently, this Office shall have to wait for the favorable recommendation of the Central Bank of the Philippines, pursuant to the legal provision that the Commission shall not accept or approve any amendment to the articles of incorporation of banks, banking and quasi-banking institutions, building and loan associations, trust companies and other financial intermediaries, insurance companies, public utilities, educational institutions, and other corporations governed by special laws unless accompanied by a favorable recommendation of the appropriate government agency (which in your case is the CB) to the effect that such amendment is in accordance with law (Sec. 17, Batas Pambansa Blg. 68). Likewise, the law prescribes that no decrease of the capital stock shall be approved by this Commission, if its effect shall prejudice the rights of corporate creditors. LibLex Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department