PDIC Law

a.Explain insurable deposits

The term insured deposit means the amount due to any bona fide depositor for legitimate
deposits in an insured bank net of any obligation of the depositor to the insured bank as of
date of closure, but not to exceed P500,000.00.
A joint account shall be insured separately from any individually-owned deposit account.
R.A. No. 9576 stipulates that PDIC will not pay deposit insurance for the following accounts
or transactions:
a. Investment products such as bonds, securities and trust accounts;
b. Deposit accounts which are unfunded, fictitious or fraudulent;
c. Deposit products constituting or emanating from unsafe and unsound banking
practices;
d. Deposits that are determined to be proceeds of an unlawful activity as defined under
the Anti-Money Laundering Law.
b. explain maximum liability
EffectiveJune1,2009, the maximum deposit insurance coverageisP500,000 per depositor. All
deposit accounts by a depositor in a closed bank maintained in the same right and capacity
shall be added together.
Under R.A.No.9576, the PDIC may propose to adjust the MDIC, subject to the approval of the
President of the Philippines, in case of a condition that threatens the monetary and financial
stability of the banking system that may have systemic consequences.
c. enumerate the requirements of claims

1. 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 (2) years from PDICs takeover of the closed bank to file their deposit
insurance claims.
2. WHO ARE REQUIRED TO FILE DEPOSIT INSURANCE CLAIMS?
2.1 Depositors with valid deposit accounts with balances of more than Php100,000.
2.2 Depositors who have outstanding obligations with the closed bank regardless of
amount of deposits.
2.3 Depositors with account balances of less than Php100,000 who have no updated

addresses in the bank records or who have not updated their addresses through
the Mailing Address Update Form (MAUF) issued by the PDIC.
2.4 Depositors who maintain their accounts under the name of business entities,
regardless of type of account and account balance.
2.5 Depositors with accounts not eligible for early payment, regardless of type of
account and account balance per advice of PDIC.
DEPOSITORS NOT REQUIRED TO FILE DEPOSIT INSURANCE CLAIMS

Depositors with valid deposit accounts with balances of Php100,000 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 or have updated these through the
Mailing Address Update Form (MAUF) issued by the PDIC. Depositors with deposit balances
of Php100,000 and below may update their addresses using the MAUF 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 PDICs initiative to provide convenience to small depositors. Payments to these depositors
are sent as postal money orders to the depositors mailing addresses.

Secrecy of Bank Deposits and Unclaimed Balances Law

a. Explain the Secrecy of Bank deposits
LAW ON SECRECY OF BANK DEPOSITS
REPUBLIC ACT NO.1405
AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO, DEPOSITS WITH ANY BANKING
INSTITUTION
AND PROVIDING PENALTY THEREFOR

SECTION 1. 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.
SECTION 2. 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, except upon written permission of the depositor, 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.

SECTION 3. It shall be unlawful for any official or employee of a banking institution to
disclose to any person other than those mentioned in Section two hereof any information
concerning said deposits.
SECTION 4. All Acts or parts of Acts, Special Charters, Executive Orders, Rules and
Regulations which are inconsistent with the provisions of this Act are hereby repealed.
SECTION 5. Any violation of this law will subject offender upon conviction, to an
imprisonment of not more than five years or a fine of not more than twenty thousand pesos
or both, in the discretion of the court.
SECTION 6. This Act shall take effect upon its approval.
Approved, September 9, 1955

b.Explain Unclaimed Balances

"Sec. 1. "Unclaimed balances", within the meaning of this Act, shall include credits or
deposits of money, bullion, security or other evidence of indebtedness of any kind, and
interest thereon with banks, buildings and loan associations, and trust corporations, as
hereinafter defined, in favor of any person known to be dead or who has not made further
deposits or withdrawals during the preceding ten years or more. Such unclaimed balances,
together with the increase and proceeds thereof, shall be deposited with the Treasurer of the
Philippines to the credit of the Government of the Republic of the Philippines to be used as
the National Assembly may direct.
--Section 1. PRESIDENTIAL DECREE No. 679 April 2, 1975 (amending act no. 3936)
General Banking Law
a. Describe and explain different kinds of loans
AMLA Law
A. Describe covered transactions.
(b) "Covered transaction" is a single, series, or combination of transactions involving a total
amount in excess of Four million Philippine pesos (Php4,000,000.00) or an equivalent
amount in foreign currency based on the prevailing exchange rate within five (5) consecutive
banking days except those between a covered institution and a person who, at the time of
the transaction was a properly identified client and the amount is commensurate with the
business or financial capacity of the client; or those with an underlying legal or trade
obligation, purpose, origin or economic justification.
It likewise refers to a single, series or combination or pattern of unusually large and complex
transactions in excess of Four million Philippine pesos (Php4,000,000.00) especially cash
deposits and investments having no credible purpose or origin, underlying trade obligation
or contract.

-SEC. 3. Definitions Anti-Money Laundering Act of 2001 (RA 9160)

b. describe suspicious transactions
'Suspicious transaction' are transactions with covered institutions, regardless of the amounts
involved,
Where any of the following circumstances exist:
"1.there Is no underlying legal or trade obligation, purpose or economic justification;
"2.the client is not properly identified;
"3.the amount involved is not commensurate with the business or financial capacity of the
client;
"4.taking into account all known circumstances, it may be perceived that the clients
transaction is structured in order to avoid being the subject of reporting requirements under
the Act
"5. Any circumstance relating to the transaction which is observed to deviate from the
profile of the client and/or the clients past transactions with the covered institution;
"6. The transaction is in anyway related to an unlawful activity or offense under this Act that
is about to be, is being or has been committed ;or
"7. Any transaction that is similar or analogous to any of the foregoing."

"Unlawful activity" refers to any act or omission or series or combination thereof

involving or having relation to the following:
(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as
the Revised Penal Code, as amended;
(2) Sections 3, 4, 5, 7, 8 and 9 of Article Two of Republic Act No. 6425, as amended,
otherwise known as the Dangerous Drugs Act of 1972;
(3) Section 3 paragraphs B, C, E, G, H and I of Republic Act No. 3019, as amended;
otherwise known as the Anti-Graft and Corrupt Practices Act;
(4) Plunder under Republic Act No. 7080, as amended;
(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of
the Revised Penal Code, as amended;
(6) Jueteng and Masiao punished as illegal gambling under Presidential Decree No.
1602;
(7) Piracy on the high seas under the Revised Penal Code, as amended and
Presidential Decree No. 532;
(8) Qualified theft under Article 310 of the Revised Penal Code, as amended;
(9) Swindling under Article 315 of the Revised Penal Code, as amended;
(10) Smuggling under Republic Act Nos. 455 and 1937;
(11) Violations under Republic Act No. 8792, otherwise known as the Electronic
Commerce Act of 2000;
(12) Hijacking and other violations under Republic Act No. 6235; destructive arson
and murder, as defined under the Revised Penal Code, as amended, including those
perpetrated by terrorists against non-combatant persons and similar targets;
(13) Fraudulent practices and other violations under Republic Act No. 8799,
otherwise known as the Securities Regulation Code of 2000;
(14) Felonies or offenses of a similar nature that are punishable under the penal
laws of other countries.
c.Enumerate reportorial requirements
SEC. 4. Money Laundering Offense. Money laundering is a crime whereby the
proceeds of an unlawful activity are transacted, thereby making them appear to have
originated from legitimate sources. It is committed by the following:

(a) Any person knowing that any monetary instrument or property represents,
involves, or relates to, the proceeds of any unlawful activity, transacts or attempts to
transact said monetary instrument or property.
(b) Any person knowing that any monetary instrument or property involves the
proceeds of any unlawful activity, performs or fails to perform any act as a result of
which he facilitates the offense of money laundering referred to in paragraph (a)
above.
(c) Any person knowing that any monetary instrument or property is required under
this Act to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails
to do so.
The New Central Bank Act
a. Explain legal tender power over coins and notes
SEC 52.
Legal Tender Power. All notes and coins issued by the Bangko Sentral shall be fully
guaranteed by the Government of the Republic of the Philippines and shall be legal
tender in the Philippines for all debts, both public and private: Provided, however, That,
unless otherwise fixed by the Monetary Board, coins shall be legal tender in amounts not
exceeding Fifty pesos (P50) for denominations of twenty-five centavos and above, and in
amounts not exceeding Twenty pesos (P20) for denominations of ten centavos or less.
- Republic act no. 7653 (The New Central Bank Act)
b. Explain conservatorship
SEC. 29. Appointment of Conservator. Whenever, on the basis of a report submitted by
the appropriate supervising or examining department, the Monetary Board finds that a
bank or a quasi-bank is in a state of continuing inability or unwillingness to maintain a
condition of liquidity deemed adequate to protect the interest of depositors and
creditors, the Monetary Board may appoint a conservator with such powers as the
Monetary Board shall deem necessary to take charge of the assets, liabilities, and the
management thereof, reorganize the management, collect all monies and debts due said
institution, and exercise all powers necessary to restore its viability. The conservator
shall report and be responsible to the Monetary Board and shall have the power to
overrule or revoke the actions of the previous management and board of directors of the
bank or quasi-bank. The conservator should be competent and knowledgeable in bank
operations and management. The conservatorship shall not exceed one (1) year.
The conservator shall receive remuneration to be fixed by the Monetary Board in an
amount not to exceed two-thirds (2/3) of the salary of the president of the institution in
one (1) year, payable in twelve (12) equal monthly payments: Provided, That, if at any
time within the one-year period, the conservatorship is terminated on the ground that
the institution can operate on its own, the conservator shall receive the balance of the
remuneration which he would have received up to the end of the year; but if the
conservatorship is terminated on other grounds, the conservator shall not be entitled to
such remaining balance. The Monetary Board may appoint a conservator connected with
the BangkoSentral, in which case he shall not be entitled to receive any remuneration or
emolument from the Bangko Sentral during the conservatorship. The expenses attendant
to the conservatorship shall be borne by the bank or quasi-bank concerned.
The Monetary Board shall terminate the conservatorship when it is satisfied that the
institution can continue to operate on its own and the conservatorship is no longer
necessary. The conservatorship shall likewise be terminated should the Monetary

Board, on the basis of the report of the conservator or of its own findings, determine that the
continuance in business of the institution would involve probable loss to its depositors or
creditors, in which case the provisions of Section 30 shall apply.
c. Explain Receivership
SEC. 30.Proceedings in Receivership and Liquidation
Whenever, upon report of the head of the supervising or examining department, the
Monetary Board finds that a bank or quasi-bank:
(a)is unable to pay its liabilities as they become due in the ordinary course of business:
Provided, That this shall not include inability to pay caused by extraordinary demands
induced by financial panic in the banking community;
(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its
liabilities; or
(c) cannot continue in business without involving probable
losses to its depositors or creditors; or
(d) has willfully violated a cease and desist order under Section 37 that has become final,
involving acts or transactions which amount to fraud or a dissipation of the assets of the
institution; in which cases, the Monetary Board may summarily and without need for prior
hearing forbid the institution from doing business in the Philippines and designate the
Philippine Deposit Insurance Corporation as receiver of the banking institution.
For a quasi-bank, any person of recognized competence in
banking or finance may be designated as receiver.
The receiver shall immediately gather and take charge of all the assets and liabilities of the
institution, administer the same for the benefit of its creditors, and exercise the general
powers of a receiver under the Revised Rules of Court but shall not, with the exception of
administrative expenditures, pay or commit any act that will involve the transfer or
disposition of any asset of the institution:
Provided, That the receiver may deposit or place the funds of the institution in
nonspeculative investments. The receiver shall determine as soon as possible, but not later
than ninety (90) days from take-over, whether the institution may be rehabilitated or
otherwise placed in such a condition so that it may be permitted to resume business with
safety to its depositors and creditors and the general public: Provided , That any
determination for the resumption of business of the institution shall be subject to prior
approval of the Monetary Board.
If the receiver determines that the institution cannot be rehabilitated or permitted to resume
business in accordance with the next preceding paragraph, the Monetary Board shall notify
in writing the board of directors of its findings and direct the receiver to proceed with the
liquidation of the institution. The receiver shall:
(1) file ex parte with the proper regional trial court, and without requirement of prior
notice or any other action, a petition for assistance in the liquidation of the institution
pursuant to a liquidation plan adopted by the Philippine Deposit Insurance
Corporation for general application to all closed banks. In case of quasi-banks, the
liquidation plan shall be adopted by the Monetary Board. Upon acquiring jurisdiction,
the court shall, upon motion by the receiver after due notice, adjudicate disputed
claims against the institution, assist the enforcement of individual liabilities of the
stockholders, directors and officers, and decide on other issues as may be material to
implement the liquidation plan adopted. The receiver shall pay the cost of the
proceedings from the assets of the institution.

(2) convert the assets of the institution to money, dispose of the same to creditors and
other parties, for the purpose of paying the debts of such institution in accordance with
the rules on concurrence and preference of credit under the Civil Code of the Philippines
and he may, in the name of the institution, and with the assistance of counsel as he may
retain, institute such actions as may be necessary to collect and recover accounts and
assets of, or defend any action against, the institution. The assets of an institution under
receivership or liquidation shall be deemed in custodia legis in the hands of the receiver
and shall, from the moment the institution was placed under such receivership or
liquidation, be exempt from any order of garnishment, levy, attachment, or execution.
The actions of the Monetary Board taken under this section or under Section 29 of this
Act shall be final and executory, and may not be restrained or set aside by the court
except on petition for certiorari on the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as to amount to lack or excess of
jurisdiction. The petition for certiorari may only be filed by the stockholders of record
representing the majority of the capital stock within ten (10) days from receipt by the
board of directors of the institution of the order directing receivership, liquidation or
conservatorship.
The designation of a conservator under Section 29 of this Act or the appointment of a
receiver under this section shall be vested exclusively with the Monetary Board.
Furthermore, the designation of a conservator is not a precondition to the designation of
a receiver .