Secrecy of Bank Deposits
Monday, December 14, 2020
12:11 PM
Guide Questions:
1. What bank secrecy law in the Philippines?
-Republic Act 1405 or known as “Bank Secrecy Law” is an act prohibiting disclosure of or inquiry into, deposits with any banking institution and
providing penalty therefor. This law was enacted to encourage individuals to deposit their money in banks instead of hoarding them.
2. What is the policy of the government under RA 1405?
-It is hereby declared to be the policy of the Government to give encouragement to the people to deposit their money in banking institutions and
to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to assist in the economic development of
the country.
3. What is the basic state policy regarding bank deposits?
○ To promote and safeguard the interest of the depositing public by way of providing permanent and continuing insurance coverage on all
insured deposits.
○ strengthen public confidence in the banking system to foster financial stability.
4. Coverage of secrecy of bank deposits (What are covered in the secrecy law?)
-All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government
of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not
be examined, inquired or looked into by any person, government official, bureau or office.
5. What are the exceptions?
-except upon written permission of the depositor or consent (to be valid is it should be knowingly, voluntarily,freely, with co…,….)
-or in cases of impeachment
-or upon order of a competent court in cases of bribery or dereliction of duty of public officials,
-or in cases where the money deposited or invested is the subject matter of the litigation. “MONEY IS THE
****What constitutes the commission constitution? “Impeachable Officer” = COA, COMELEC, CIVIL SERVICE, Ombudsman President, VP, Justices
= Culcablle ….
6. What are the new exceptions under Rep. Act 1405?
-Not covered by the bank secrecy law are investments which are not bank deposits or government securities such as corporate bonds, purchases
of shares of stocks, purchases of receivables of business, and purchases of foreign exchange.
-Upon a subpoena issued by the Ombudsman concerning an investigation it is conducting, provided that there must already be a case pending
in court, the account be clearly identified, the inspection be limited to the subject matter of the pending case; and the bank personnel and the
depositor must be notified to be present during the inspection;
-The BIR can inquire into bank deposits in an application for compromise of tax liability or determination of a decedent’s gross estate;
-The Anti-Money Laundering Council (“AMLC”) can examine bank accounts pursuant to a court order, where there is probable cause that the
deposits are related to an unlawful activity or money laundering offense;
-The AMLC can examine bank accounts, WITHOUT a court order, where there is probable cause that the deposits are related to certain crimes
such as kidnapping for ransom, violation of the Dangerous Drugs Act, hijacking, destructive arson, murder and violations of RA 6235 (acts
inimical to civil aviation);
-The Bangko Sentral can examine bank accounts in the course of its periodic or special examination regarding compliance with Anti-Money
Laundering Law.
******VIOLATION OF
-when there is danger of bank fraud
-BIR- NIRC will look into as a client will
—-AMLC WITH COURT ORDER “unlawful acts” , without COURT order “crimes that are KIDNAPPING,RANSOM, DRUGS, MURDER
—-BSP CAN INQUIRE BANK DEPOSITS IN CASES OF AMLC MANUAL TESTING
—-pdic can inquire whether finding unsounding banking practices
——also court of appeals
7. Define bank account garnishment.
-Bank account garnishment means that a debt collector has successfully sued to have money taken out of your bank account. This happens if
you haven't repaid debts such as a medical bill or unpaid taxes. Your bank isn't required to notify you of an account garnishment unless the
withdrawal overdraws your balance.
-agent of the court can garnish the account. “COURT SHERIFF” - writ of garnishment is the document the sheriff will bring upon the authority
of the court.
8. Can foreign currency deposits be subject to garnishment?
-(General Rule) Foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body whatsoever.
*****DOES GARNISHMENT OF A BANK DEPOSITS VIOLATES THE LAW? NOOOOOO. THE PROVISION DOES NOT PRECLUDE SINCE IT IS
INCIDENTAL.
****the sbd is not absolute