Bank Secrecy Law
Bank Secrecy Law
Bank Secrecy Law
Deposits Covered:
1. All deposits of whatever nature with banks or banking institutions in the Philippines,
including trust accounts.
Deposits refer to money or funds placed with a bank that can be withdrawn on the
depositor's order or demand, such as deposit accounts in the form of savings, current and
time deposits. Deposits are characterized as being in the nature of a simple loan. The
placing of deposits in a bank creates a creditor-debtor relationship between the depositor
and the bank. As such, the bank being the debtor has the obligation to pay a certain sum
of money to the depositor, being the creditor.
2. Investments in bonds issued by the Government of the Philippines, its subdivisions,
and its instrumentalities.
Investments in Government Bonds are debt securities which are unconditional
obligations of the State and backed by its full taxing power. Government bonds include
treasury bills, treasury notes, retail treasury bonds, dollar linked peso notes, and other
risk-free bonds
Prohibited Act:
It shall be unlawful:
1. Bank (any official or employee or independent auditor of a bank) - to disclose to
any person other than a bank director, officials, or employee authorized by the
bank, any information concerning deposits.
2. Any person, including the government – to inquire, examine, or look into bank
deposits or bonds issued by the government.
The prohibition is not absolute. The rule allows several exceptions, carved out
by special laws and jurisprudence
Exceptions:
Peso Deposits:
1. When there is written permission from the depositor or investor
DOSRI accounts: Directors, officers, stockholders, and related interests who contract
a loan or any form of financial accommodation with their bank or a related bank are
required to execute a written waiver of secrecy of deposits pursuant to The New
Central Bank Act (Sec. 26, Rep. Act No. 7653).
2. Impeachment cases of the President, Vice President, members of the Supreme Court,
members of the Constitutional Commission (Commission on Elections, Civil Service
Commission and Commission on Audit) and the Ombudsman for culpable violation
of the Constitution treason, bribery, graft and corruption, other high crimes, or
betrayal of public trust. (Art. XL, Sec. 2, 1987 Philippine Constitution)
Answer: No. Since the very subject of the case is the money deposited in her
account by virtue of the case for recovery filed by Mellon Bank. Therefore, it
constitutes an exception to the Secrecy of Bank Deposits.
Example 2: A buys 100 flowerpots from B and deposits P100,000 to B’s bank
account as payment for the pots. However, B did not deliver the pots so A then
filed for litigation. To prove that A paid P100,000, A wants to check B’s bank
account. The court could NOT order the disclosure of information as the
subject matter of the litigation is B’s performance, not the deposited money.
6. Prosecution for unexplained wealth under the Anti-Graft and Corrupt Practices Act.
7. PDIC/BSP may inquire into bank deposits if there is a finding of unsound or unsafe
banking practice (Sec. 8 [8], PDIC Charter)
8. The Ombudsman has the power to issue subpoena and subpoena duces tecum,
take testimony in any investigation or inquiry, as well as examine and access bank
accounts and records. The power of the Ombudsman to subpoena deposit information
of a government official may be exercised when the following conditions concur:
10. Authority of the AMLC to inquire into any particular deposit or investment with any
banking institution upon order of CA based on an ex parte application upon probable
cause that such deposit/investment is related to an unlawful activity or to money
laundering pursuant to Sec 11 of the Anti-Money Laundering Act of 2001 (RA 9160,
as amended by RA 9194 and RA 10167).
a. Reporting of covered or suspicious transactions pursuant to 59(c) of the
AMLA.
b. The BSP may, in the course of a periodic or special examination, check the
compliance of a covered institution with the requirements of the AMLA and
its implementing rules and regulations (S11 AMLA)
11. Authority of AMLC, either upon its own initiative or at the request of ATC, to inquire
into bank deposits upon the issuance by the court of a preliminary order of
proscription or in the case of designation:
a. Any property or funds that are in any way related to the financing of
terrorism as defined and penalized under RA 10168
b. Violation of Sec 4, 6, 7, 10, 11, or 12 of the Anti-Terrorism Law
c. Property or funds of any person or persons in relation to whom there is
probable cause to believe that such person or persons are committing or
attempting or conspiring to commit, or participating in or facilitating the
financing or terrorism
12. Examination is made by an independent auditor hired by the bank to conduct its
regular audit provided that the examination is for audit purposes only and the results
thereof shall be for the exclusive use of the bank.
2. Obligation to pay losses suffered due to the character of the thing deposited,
UNLESS:
a. depositor was not aware or was not expected to know the dangerous
character of the thing;
b. depositor notified the depositary of the dangerous character;
c. depositary was aware of the dangerous character without advice from the
depositor;
Note: The PDIC and its duly authorized officers or employees are prohibited from disclosing
information obtained under this section to any person, government official, bureau or office.
Any act done pursuant to this section shall not be deemed as a violation of Republic Act No.
1405, as amended, Republic Act No. 6426, as amended, Republic Act No. 8791, and other
similar laws protecting or safeguarding the secrecy or confidentiality of bank deposits:
Provided, That any unauthorized disclosure of the information under this section shall be
subject to the same penalty under the foregoing laws protecting the secrecy or confidentiality
of bank deposits.