CPA REVIEW SCHOOL OF THE PHILIPPINES
Manila
REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS
Atty. Dante Dela Cruz/Atty. Kenneth Dela Cruz
PDIC LAW
PDIC is a government instrumentality created by virtue of Republic Act 3591 to insure the deposits of all banks
which are entitled to the benefits of insurance. The PDIC is an attached agency of the Department of Finance.
Depositors have quicker access to their insured deposits in the event of bank closure since PDIC has the
authority to pay insured deposits without netting out depositors’ loan obligations with the closed bank, and
based on evidence of deposits and not on the closed bank’s records alone.
The law does away with the 90-day receivership period and allows PDIC to proceed directly to liquidation.
The immediate assignment of encumbered assets to closed bank creditors, adoption of purchase of assets and
assumption of liabilities as a mode of liquidation, and express prohibition on reopening of banks ordered
closed by the Monetary Board of the Bangko Sentral ng Pilipinas help enhance recovery rate for creditors of
closed banks.
Insurable Deposits under PDIC Law (Covered by PDIC Insurance)
Deposit Type
1.
2.
3.
4.
5.
6.
Savings Deposit
Special Savings
Demand/Checking Account
Negotiable Order of Withdrawal
Certificate of Time Deposits
Foreign currency Deposit
Deposit Account
1.
Single Accounts - are individually-owned accounts or accounts held under one name, either as natural
person (single proprietorship or individual) or juridical entity (corporation. partnership or
cooperative).
2.
Joint Accounts - are accounts held under more than one name.
a.
b.
c.
d.
3.
Account "By", "In Trust For" or "For the Account of' another person
a.
b.
c.
4.
A joint account regardless of whether the conjunction "and", "or" or "and/or" is used shall be insured
separately from single accounts.
Unless a different sharing is stipulated in the deposit documents. the insured amount up to the
Maximum Deposit Insurance Coverage of Php500,000 shall be divided equally between or among
co-owners of a joint account.
The total shares of a co-owner in several joint accounts may exceed Php500,000 but will only be
insured up to the Maximum Deposit Insurance Coverage of Php500,000.
Joint accounts held in the names of a juridical entity and a natural person shall be presumed to belong
solely to the juridical entity.
In a "By" account, Rose by Dante, Rose is the depositor.
In an "In Trust For" account, Rose In Trust For Dante, Dante is the depositor.
In a "For the Account of" account, Rose For the Account of Dante, Dante is the depositor.
Notes
a.
b.
c.
Where a depositor is the sole beneficial owner of a single, "For the Account of", "By", and "In Trust
For" accounts, the consolidated balances of these accounts shall be insured up to Php500,000
The depositor's total shares in joint accounts shall be separately insured up to Php500,000.
A depositor with single accounts and joint accounts may have insured deposits of up to Php1,000,000
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Items not covered by PDIC Deposit Insurance
1.
2.
3.
4.
Investment products such as bonds and securities, trust accounts and other similar instruments
Telegraphic note
Deposit accounts or transactions that:
a. Are unfunded, fictitious or fraudulent
b. Constitute and/or emanate from unsafe and unsound banking practices
c. Are determined to be proceeds of an unlawful activity as defined in the Anti-Money Laundering Law
Bank Deposits in Foreign Banks operating outside the Philippine territory or Bank Deposits in Foreign
branch of domestic bank operating outside the Philippine territory
Unsafe and unsound deposit-related activities include, among others:
a. Deposit-related practice/activity/transaction without the approval or adequate controls required under
existing laws, rules and regulations
b. Failure to keep bank records within bank premises
c. Granting high interest rates, when bank has negative unimpaired capital or liquid assets to deposit
ratio less than 10%
d. Noncompliance with PDIC regulations
Maximum Deposit Insurance Coverage
PDIC shall pay deposit insurance on all valid deposits up to the Maximum Deposit Insurance Coverage of
Php500,000 per depositor of a closed bank. However. A depositor with single accounts and joint accounts may
have insured deposits of up to Phpl,000,000.
Examples
1.
Rose Reyes insured deposit if she has the following four deposit accounts in the same bank
ACCOUNT NAME
Rose Reyes
Dante Reyes For the Account of Rose Reyes
Kris Reyes In Trust For Rose Reyes
Rose Reyes Store (Sole Proprietorship)
Total
2.
Insured Deposit of Rose Reyes
100,000
100,000
100,000
200,000
500,000
Rose Reyes insured deposit if she has the following three joint accounts in the same bank
ACCOUNT NAME
Rose Reyes or Dante Reyes
Rose Reyes and Kris Reyes
Rose Reyes and/or Divine Reyes
Total
•
3.
Deposit in PHP
100,000
100,000
100,000
700,000
1,000,000
Deposit in PHP
500,000
1,000,000
1,000,000
2,500,000
Insured Deposit of Rose Reyes
250,000
250,000
0*
500,000
Rose Reyes does not have any insured deposit share since she already has P500,000 in total
shares in the two joint accounts she has with Dante and Kris Reyes.
Rose Reyes insured deposit for all her single and joint accounts in the same bank
ACCOUNT NAME
Deposit in PHP
All single accounts of Rose Reyes in BDO Branch 1 1,000,000
All joint accounts of Rose Reyes in BDO Branch 2 2,500,000
Total
3,500,000
Insured Deposit of
Rose Reyes
500,000
500,000
1,000,000
For purposes of computing the insured deposits, all obligations or loans of the depositor with the closed
bank as of bank closure shall be deducted from the depositor's total deposits with the said bank.
In case of joint account involving a juridical/artificial person and a natural person, the maximum insured
deposit of P500,000 to such joint account shall be given to juridical/artificial person only.
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Requirements for Claims of Insured Deposits
When are claims filed?
Claims are filed during the claims settlement operations 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
Depositors have two years from PDIC's takeover of the closed bank to file their deposit insurance claims.
Who are required to file deposit insurance claims?
1.
2.
3.
4.
5.
Depositors with valid deposit accounts with balances of more than Php100,000.
Depositors who have outstanding obligations with the closed bank regardless of amount of deposits.
Depositors with account balances of less than Php100,000 who have no updated addresses in the bank
records.
Depositors who maintain their accounts under the name of business entities, regardless of type of account
and account balance.
Depositors with accounts not eligible for early payment, regardless of type of account and account balance
per advice of PDIC.
Who are not required to file deposit insurance claims?
Depositors with valid deposit accounts with balances of Phpl00,000 and below are not required to file claims
provided they have no obligations with the closed bank and have complete and updated addresses in the bank
records. Depositors with deposit balances of Phpl00,000 and below may update their addresses using the
Mailing Update Form issued by PDIC and submit to PDIC representatives stationed at the closed bank
premises before the start of the onsite claims settlement operations
These depositors are entitled to immediate/early payment of deposit insurance claim as part of PDIC's initiative
to provide convenience to small depositors. Payments to these depositors are sent as postal money orders to
the depositors' mailing addresses.
Steps in filing deposit insurance claims
1.
Prepare the following documents:
a. Original evidence of deposits such as savings passbook, certificate of time deposit, bank statement,
unused checks, and ATM card.
b. Original copy of ONE VALID PHOTO-BEARING IDENTIFICATION DOCUMENTS (ID)
with clear signature of depositor/claimant such as Driver's License, SSS/ GSIS ID, Senior Citizen's
ID, Passport, PRC ID, OWWA/ OFW ID, Seaman's ID, Alien Certification of Registration ID, Voter's
ID, IBP.
c. If the depositor is below 18 years old, a photocopy of his/her birth certificate from the Philippine
Statistics Authority (PSA) or duly certified copy from the local civil registrar and valid IDs of the
parent.
d. Original copy of a notarized Special Power of Attorney for claimants who are not the signatories in
the bank records. In the case of minor depositor, the Special Power of Attorney must be executed by
the parent.
2.
Submit to:
a. If filing personally:
The PDIC representatives at the premises of the closed bank during Claims Settlement Operations or
to the PDIC Public Assistance Center at the SSS Bldg., Ayala Avenue Makati City.
b. If filing through Mail
Send the accomplished and notarized Claim Form and requirements to The Claims Processing
Department of PDIC SSS Building. Ayala Avenue, Makati City
Who should sign the deposit insurance claim form?
a. Depositor of the account — for depositors 18 years old and above
b. Parent — if the depositor is below 18 years old
c. Agent — in the case of "By" accounts
d. Trustee — in the case of "In Trust for accounts
e. Each Depositor — in the case of joint accounts such as "Or", "And or" or "And" accounts
END
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