QuestionsQuestions (Republic Act No. 9576)
To strengthen the mandatory deposit insurance system to generate and preserve faith and confidence in the banking system, protect it from illegal schemes, and ensure PDIC can provide permanent and continuing insurance coverage to depositing public while helping develop a sound and stable banking system.
It reiterates that a 'deposit' is the unpaid balance of money or its equivalent received by a bank in the usual course of business and credited to specified bank accounts (commercial/checking/savings/time/thrift), plus other obligations the Board may determine to be deposit liabilities, based on banking usage and regulations.
Because the law provides that any obligation payable at the office of the bank located outside the Philippines shall not be a deposit for purposes of the Act or included in total/insured deposits.
Subject to approval of the PDIC Board of Directors, the insured bank may elect to include deposits payable only at the branch outside the Philippines for insurance.
Examples include: (1) investment products and similar instruments (e.g., bonds/securities, trust accounts), (2) unfunded or fictitious/fraudulent deposit accounts or transactions, (3) deposits/transactions emanating from unsound or unsafe banking practices after notice and hearing and a cease-and-desist order, and (4) deposits determined to be proceeds of unlawful activity under RA 9160, as amended.
The PDIC action is final and executory and may not be restrained or set aside except on appropriate petition for certiorari for excess of jurisdiction or grave abuse of discretion. The petition must be filed within thirty (30) days from notice of denial of claim.
Five hundred thousand pesos (P500,000.00). The insured deposit is the amount due to a bona fide depositor for legitimate deposits in an insured bank net of the depositor’s obligations to the bank, as of date of closure, subject to the cap.
The maximum insured deposit is divided into as many equal shares as there are individuals or juridical persons/entities, unless a different sharing is stipulated in the deposit document.
The maximum insured deposits are presumed to belong entirely to the juridical person/entity.
The aggregate of the interest of each co-owner over several joint accounts (owned by the same or different combinations) is subject to the maximum insured deposit of P500,000.00.
No owner/holder of any negotiable certificate of deposit shall be recognized as a depositor entitled to rights under the Act unless the depositor’s name is registered as owner/holder in the books of the issuing bank.
When a condition threatens monetary and financial stability of the banking system with systemic consequences (as defined in Section 17), determined by the Monetary Board; the maximum cover may be adjusted in amount/period and/or deposit products by unanimous vote of PDIC’s Board of Directors in a meeting chaired by the Secretary of Finance, subject to approval of the President.
Within first three years: the first P250,000 of coverage is for the account of PDIC; amounts in excess of P250,000 up to P500,000 are for the account of the National Government. Congress must annually appropriate necessary funding to reimburse PDIC for any payment to insured depositors in excess of P250,000.
No examination can be conducted within 12 months from last exam date (with prior approval of Monetary Board). PDIC may, with coordination with BSP, conduct a special examination if there is threatened or impending closure, via affirmative vote of majority of PDIC Board, chaired by no less than a required quorum of its members (as stated in the provision).
It provides that notwithstanding certain other laws, PDIC and/or BSP may inquire into or examine deposit accounts and related information when there is a finding of unsafe/unsound banking practice.
They are held free and harmless from liability to the fullest extent permitted by law, and are entitled to indemnification for liabilities, losses, claims, damages, expenses arising from performance of functions, unless their actions involve willful violation of the Act, bad faith, malice, and/or gross negligence—without prejudice to criminal liability under existing laws.
All tax obligations for five (5) years from effectivity are chargeable to the Tax Expenditure Fund (TEF) in the General Appropriation Act pursuant to EO No. 93. On the 6th year and thereafter, PDIC is exempt from income tax, final withholding tax, VAT on assessments collected from member banks, and local taxes.