PDIC ACT (RA 3591, as amended)
PHILIPPINE DEPOSIT INSURANCE CORPORATION
(PDIC)
•
•
PDIC is a Corporation created through R.A. 3591 which
shall insure the deposits of all banks.
Basic policy is to promote financial stability and
safeguard the interests of the depositing public.
Functions: is to act as
1. Deposit Insurer
The PDIC shall promote and safeguard the
interests of the depositing public by way of providing
permanent and continuing insurance coverage on all
insured deposits.
2. Co-regulator of Banks
As a bank regulator, the PDIC is empowered to
examine and investigate banks.
3. Receiver and Liquidator of Closed Banks
The PDIC as receiver shall control, manage and
administer the affairs of the bank.
•
•
•
PDIC covers only the risk of a bank closure order by the
Monetary Board (e.g. because of insolvency). Thus,
bank losses due to theft, fire, closure by reason of strike
or existence of public disorder, revolution, or civil war;
are not covered by PDIC.
All banks. It is mandatory for banks to insure their
deposits with, and pay premium to, the PDIC.
Previously up to P250,000 per depositor with the bank
R.A. No. 9576 signed by the President on April 29, 2009
double the coverage to P500,000.
Group 1
BOARD OF
AUTHORITY
DIRECTORS:
COMPOSITION
AND
a. 7 Members of the BoD:
• At least 4 members shall constitute a quorum and at least 4
members shall concur before having a decision (majority).
• Governance Commission for GOCC shall determine the
compensation, per diems and other benefits of the board
members.
• The disclosure of any member’s personal and pecuniary
interest on the BOD’s agenda as well as of his/her recusal is
necessary to reflect in the minutes of meeting. (Code of
Conduct and Ethical Standards for Public Officials and
Employees).
General Qualifications:
▪
▪
▪
▪
▪
Shall be of good moral character
Has unquestionable integrity and responsibility
Of known probity and patriotism
Recognized for being competent is economics, banking
and finance, law, management administration or
insurance
Shall be at least 35 years of age
1. Secretary of Finance
▪ ex officio
▪ May designate an alternate (official with a rank not
lower than assistant secretary) to attend meetings and
to vote on his/her behalf.
2. Governor of the BSP
▪ ex officio
Caporal, Grimaldo, Hubahib, Rellosa, Rivera, Rondina, Zuñiga
1
PDIC ACT (RA 3591, as amended)
▪ May designate an alternate (official with a rank not
lower than assistant secretary) to attend meetings and
to vote on his/her behalf.
3. President of the Corporation
▪ Shall serve as the Vice Chairman of the board.
▪ From the shortlist prepared by the Governance
Commission for GOCC, the Philippine President will
appoint someone.
▪ R.A. 10149 states that person appointed shall serve on
a full-time basis for 6 years (1 term).
4-7. 4 Members from Private Sector
▪
▪
‘
From the shortlist prepared by the Governance
Commission for GOCC, the Philippine President will
appoint four members.
R.A. 10149 states that person appointed shall serve on
a full-time basis for 6 years (1 term) unless sooner
remove.
o Shall be subject to only one (1) reappointment
provided that:
▪ First two appointees on those first
appointed shall serve a period of three (3)
years provided that the appointive director
(nominated by Government Commission
for GOCC) shall continue to hold office
until a successor is appointed.
▪ Appointment to any vacancy shall be only
the unexpired term.
Group 1
Reasons of the Philippine President for the removal of any
appointive member of BOD:
1. Physically or mentally incapacitated for more than 6
months.
2. Guilty of fraudulent and illegal acts.
3. No longer possesses the qualifications
4. Doe does not meet the standards for performance based
on evaluation by the Governance Commission for
GOCC (R.A. 10149)
b. Authority of the BoD:
1. Approve and issue rules and regulations for banks and
the depositing public.
2. Act as policy-making body and oversee the management,
operations, and administration of the corporation
3. Establish a human resource management system
4. Approve a compensation structure
5. Appoint, establish the rank, fix the remuneration,
benefits, including health services through a Health
Maintenance Organization (HMO) and medical benefits
and remover officer or employee for cause.
6. Approve policy on local and foreign travel, and the
corresponding expenses.
7. Adopt an annual budget.
8. Approve the target level of Deposit Insurance Fund
(DIF) and the methods for determining reserves for
insurance and financial assistance losses
9. To review the organizational set-up of the corporation
and adopt a new o revised organization structure.
10. To design, adopt and revise an early separation plan for
employees.
Caporal, Grimaldo, Hubahib, Rellosa, Rivera, Rondina, Zuñiga
2
PDIC ACT (RA 3591, as amended)
11. To promote and sponsor the local or foreign training or
study of personnel in the fields of banking, finance,
management, information technology and law.
INSURED DEPOSIT
•
•
•
•
•
The amount due to any bonafide depositor for legitimate
deposits in an insured bank as of the date of closure but
not to exceed Five hundred thousand pesos (Php
500,000)
Examples of types of deposits covered:
a. Savings Deposit
b. Special Savings
c. Demand/Checking Account
d. Negotiable Order of Withdrawal (NOW)
e. Certificate of Time Deposits
f. Foreign currency Deposit
No owner/holder of any passbook, certificate of deposits,
or other evidence of deposit shall be recognized as a
depositor entitled to the rights under the PDIC charter
unless the passbook, certificate of deposit or evidence of
deposit is determined by the PDIC to be an authentic
document or record of the issuing book.
Payment for insured deposits may be either through cash
or by making available to each depositor a transferred
deposit in another insured bank in an amount equal to the
insured deposit of such depositor.
In determining such amount due to any depositor, there
shall added together all deposits in the bank maintained
in the same right capacity for his or her benefit either in
his or her own name or in the name of others.
Group 1
•
If a bank has one or more branches, the main office and
all branch offices are considered as one bank. Thus, if
you have deposits at the main office and at one or more
branch offices of the same bank, the deposits are added
together when determining deposit insurance coverage,
the total of which shall not exceed Php 500,000
Example:
Doug Judy has the following accounts in different banks
which are as follows:
Pontiac Bankdit:
Savings Account …. 300,000
Current Account ….. 800,000
Rosa Rosa Bank
Savings Account …. 200,000
Current Account ….. 150,000
How much is the insured deposit?
500,000+350,000= 850,000
Adjustment of Maximum Deposit Insurance
The amount of coverage may be adjusted in such amount,
for such a period, and/or for such deposit products, provided:
1. The Monetary Board has determined that there is a
condition that threatens the monetary and financial stability
of the banking system that may have systematic
consequences as defined under RA No. 3591;
Caporal, Grimaldo, Hubahib, Rellosa, Rivera, Rondina, Zuñiga
3
PDIC ACT (RA 3591, as amended)
2. Approval by a unanimous vote of the Board of Directors
of the PDIC in a meeting called for the purpose and chaired
by the DOF Secretary;
3. Approval of the President of the Philippines.
•
•
Under Section 22 of the PDIC Charter, a systemic risk
refers to the possibility of failure of one bank to settle net
transactions with other banks will trigger a chain reaction,
depriving other banks of funds leading to a general
shutdown of normal clearing and settlement activity.
It also means the likelihood of a sudden, unexpected
collapse of confidence in a significant portion of the parking
or financial system with potentially large real economic
effect.
DEPOSIT ACCOUNTS NOT ENTITLED TO PAYMENT
1. Deposit products that resulted from splitting of deposit.
Splitting of Deposit - occurs whenever;
a. A deposit account with an outstanding balance
more than P500,000 is broken down and transferred
to two or more accounts in the name of persons or
entities who have no beneficial ownership in the
transferred deposits in their names
b. within 120 days immediately preceding or during a
bank-declared bank holiday or immediately
preceding a closure order issued by the Monetary
Board
c. for the purpose of availing the maximum deposit
insurance coverage.
This is considered a criminal act punishable by
imprisonment of not less than 6 years but not more
Group 1
than 12 years or a fine not less than P50,000 but not
more than P10,000,000, or both, at the discretion of the
court.
2. Deposit products or money placements by the head office of
a foreign bank in its branch in the Philippines because there
is only one entity.
3. Deposits that are determined to be the proceeds of an
unlawful activity as defined under RA 9160 or the Anti-Money
Laundering Act as amended
4. Deposits payable in a place outside the Philippines (like
those in foreign branches)
5. Deposit accounts or transactions which are unfunded and that
are fictitious or fraudulent
6. Deposit accounts or transactions constituting and/or
emanating from, unsafe and unsound banking practice/s, as
determined by PDIC, in consultation with BSP, after due
notice and hearing, and publication of a cease and desist order
issued by PDIC against such deposit accounts or transactions.
7. Investment products such as bonds and securities, trust
accounts and other similar instruments
UNSAFE AND/OR UNSOUND DEPOSIT-RELATED
PRACTICES
The following may be considered unsafe and/or unsound
deposit-related practices:
1. Performance of any deposit-related practice, activity, or
transaction without the requisite approvals or without
adequate controls, as mandated by existing laws, rules, and
Caporal, Grimaldo, Hubahib, Rellosa, Rivera, Rondina, Zuñiga
4
PDIC ACT (RA 3591, as amended)
2.
3.
4.
5.
regulations, which may result to unaccounted,
undocumented and/or unrecorded deposits.
Failure to keep bank records (printed and/or electronic)
within the bank premises especially deposit documents such
as, but not limited to, signature cards, depositor information
files, and deposit ledgers.
• For purposes of this section, for “premises” shall refer
to places where a bank has a legal right to stay or occupy
to conduct its operations and/or keep its records. It
includes, but is not limited to, lands and buildings,
warehouses, storerooms, online storage, and offsite or
backup sites owned or leased by a bank. For those not
owned by the bank, it must be covered by a contract
showing the bank’s legal right to say or occupy therein.
Granting high interest rates when the bank has: (i) negative
unimpaired capital and (ii) either a liquid assets-to-deposits
ratio of less than 10% or an operating loss.
• A bank is deemed offering high interest rates on deposits
if the interest rate is over 50% of the prevailing
comparable market median rate for similar bank
categories.
• Liquid assets refer to the sum of Cash, Due from
BSP/Banks and Financial Assets, net of allowance for
credit losses.
Non-compliance with PDIC Regulatory Issuances.
Other deposit-related practices, activities, and transactions
which the PDIC may identify through appropriate issuances.
• Attached for guidance is a list of specific activities which
the PDIC may consider to be unsafe and/or unsound
banking practices (Annex A).
• The PDIC may hereafter consider other acts or omissions
as unsafe and/or unsound pursuant to the general
principles and guidelines in this Regulatory Issuance.
Group 1
SANCTIONS AGAINST UNSAFE
BANKING PRACTICES (SEC. 7)
AND UNSOUND
A. Whenever upon examination by the Corporation into the
condition of any insured bank,
• it shall be disclosed that an insured bank or its directors
or agents have committed, are committing or about to
commit unsafe or unsound practices in conducting the
business of the bank, or have violated, are violating or
about to violate any provisions of any law or regulation
to which the insured bank is subject,
• the Board of Directors shall submit the report of the
examination to the Monetary Board to secure corrective
action thereon.
• If no such corrective action is taken by the Monetary
Board within forty-five (45) days from the submission
of the report, the Board of Directors shall, motu proprio,
institute corrective action which it deems necessary.
• The Board of Directors may thereafter issue a cease
and desist order, and require the bank or its directors or
agents concerned to correct the practices or violations
within forty-five (45) days.
▪ However, if the practice or violation is likely to
cause insolvency or substantial dissipation of
assets or earnings of the bank, or is likely to
seriously weaken the condition of the bank or
otherwise seriously prejudice the interests of its
depositors and the Corporation, the period to take
corrective action shall not be more than fifteen
(15) days.
• The order may also include the imposition of fines
provided in Section 21 (f) hereof.
Caporal, Grimaldo, Hubahib, Rellosa, Rivera, Rondina, Zuñiga
5
PDIC ACT (RA 3591, as amended)
• The Board of Directors shall duly inform the
Monetary Board of the Bangko Sentral ng Pilipinas
of action it has taken under this subsection with respect
to such practices or violations. (As amended by R.A.
7400, 13 April 1992; R.A. 9302, 12 August 2004)
B. The actions and proceedings provided in the preceding
subsection may be undertaken by the Corporation if, in its
opinion, an insured bank or its directors or agents have
violated, are violating or about to violate any provision of
this Act or any order, rule or instruction issued by the
Corporation or any written condition imposed by the
Corporation in connection with any transaction with or grant
by the Corporation. (As amended by E.O. 890, 08 April
1983; R.A. 7400, 13 April 1992)
Group 1
Example:
The couple Amy and Jake have account balances with
Peraltiago 99 Bank which are as follows:
Amy Santiago ………………. 750,000
Jake Peralta ……………….. 750,000
Amy and Jake ……………… 500,000
How much can Jake Peralta recover from PDIC if Peraltiago
99 Bank closed by the order of the monetary board ?
500,000/2 + 500,000 (limit) = 750,000
•
RULES ON JOINT ACCOUNTS
•
•
•
A joint account regardless of whether the conjunction
‘and’, ‘or’ ‘and/or’ is used, shall be insured separately
from any individually-owned deposit account. The
maximum insured deposit shall be divided into as many
equal shares as there are account holders, unless a
different sharing is stipulated in the document of deposit.
If the account is held by a juridical person or entity
jointly with one or more natural persons, the maximum
insured deposit shall be presumed to belong entirely to
such juridical person or entity.
The aggregate interest of each co-owner over several
joint accounts, whether owned by the same or different
combinations or individuals, juridical persons, or
entities, shall likewise be subject to the maximum
insured deposit of P500,000.
•
Depositor of a closed bank shall file his deposit
insurance claim with the PDIC within 2 years from the
date of bank takeover. Otherwise, all rights of the
depositor with respect to the insured deposit shall no
longer be honored. But he may still make a claim against
the assets of the closed bank.
The period to enforce the claim is 2 years after the 2-year
period to file a claim.
FILING OF CLAIMS WITH PDIC
•
For account holders with a total deposits amount of not
more than P100,000 there is an automatic payment by
mail. PDIC send the check to by mail, in cooperation
with the Philippines Postal Office. Provided that they:
o have no obligations with the closed bank, or have
not acted as co-makers of these obligations, or
are not spouses of the borrowers
Caporal, Grimaldo, Hubahib, Rellosa, Rivera, Rondina, Zuñiga
6
PDIC ACT (RA 3591, as amended)
•
o have complete mailing address found in the bank
records or have updated their addresses through
the Mailing Address Update Form (MAUF) of
PDIC before the start of the onsite claims
settlement operation
o have not maintained the account under the name
of business entities.
For account holders of more than P100,000, claims must
be filed during the onsite Claims Settlement Operations
(CSO) period, as announced in the Notice to Depositors
published in national or local newspapers or posted in the
bank premises and conspicuous places within the
locality, and in the PDIC website. Depositor who failed
to file their claims during the onsite CSO may do so
personally or through mail by sending a duly
accomplished and notarized Claim Form.
Requirements in Filing Claims
•
•
•
•
Original Evidence of Deposits
Valid Original Photo-bearing identification document
(ID) with clear signature of depositor/claimant
Birth Certificate if depositor is below 18 and VALID ID
of parent
Notarized SPA for claimants who are not the signatories
in the bank records.
Who should sign the insurance claim?
1. Depositor of the account - for depositors 18 years old and
above
2. Parent - if the depositor is below 18 years old
Group 1
3. Agent - in the case of "By" accounts (ex. Juan by Pedro –
Juan is the depositor)
4. Trustee - in the case of "In Trust for ITF" accounts (ex.
Juan ITF Pedro – Pedro is the depositor)
5. Each Depositor - in the case of joint accounts such as
"Or", "And/Or" or "And" accounts. (ex. Juan FAO Pedro
is the depositor)
Effects of non-filing or non-enforcement of claim within the
specified periods above:
a. All rights of the depositor against the PDIC with respect
to the insured deposit shall be barred,
b. All rights of the depositor against the closed bank and its
shareholders or the receivership estate to which PDIC
may have become subrogated, shall thereupon revert to
the depositor.
c. PDIC shall be discharged from any liability on the
insured deposit.
Period for the PDIC to settle claim 6 months from the date of
filing of the claim.
Failure to settle the claim within 6 months from the date of
filing of claim for insured deposit, where such failure was due
to grave abuse of discretion, gross negligence, bad faith or
malice, shall upon conviction, subject the directors, officers or
employees of PDIC responsible for the delay, to
Imprisonment from 6 months to one year.
Except: that the period shall not apply if the validity of the claim
requires the resolution of issues of facts and/or law by another
office, body or agency.
Caporal, Grimaldo, Hubahib, Rellosa, Rivera, Rondina, Zuñiga
7