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It was to help with the purchase of agricultural estates for division and resale to small landholders and the purchase of land by the agricultural lessee.
On October 21,Presidential Decree No. The system was implemented through a system of sharecropping or lease-tenancy. LANDBANK was tasked to collect year land amortizations from beneficiaries at the cost of the value of the land plus six percent interest per annum.
It lacked the resources and the capital needed to implement the land reform programs and lacked the structure to implement the programs efficiently.
The decree granted LANDBANK a universal banking license the first bank in the Philippines to be issued such a license with a social mission to spur countryside development.
The decree expanded LANDBANK's powers to include lending for agricultural, industrial, homebuilding and home-financing projects and other productive enterprises, as well as lending to farmers' cooperatives and associations to facilitate production, marketing of crops and acquisition of essential commodities.
LANDBANK was also required by the decree to provide timely and adequate support in all phases involved in the execution of agrarian reform and also increased its authorized capital to 3 billion pesos. It also became exempted from all national, provincial, city and municipal taxes and assessments.
It was divided into Agrarian, Banking and Operations sectors to strengthen operations and ensure long-term viability. Inthe Agricultural Credit Administration ACAestablished under the same law as Landbank, was abolished and all its assets and functions transferred to Landbank.
ACA's function was to extend credit to small farmers. It was also in that year that UnionBank started a gradual privatization.
Its authorized capital was increased to nine billion pesos and it became an official government depository. The number of members of the board of trustees was also increased to nine.
In rural areas, it either competes against or complements rural banks. It either competes against or works with DBP, depending on the situation.#FlyForFreeFaster with the Cebu Pacific GetGo cards by UnionBank.
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