Question & AnswerQ&A (Republic Act No. 10846)
The primary policy of the PDIC is to strengthen the mandatory deposit insurance coverage system to generate, preserve, maintain faith and confidence in the country's banking system, and protect it from illegal schemes and machinations, while promoting and safeguarding the interests of the depositing public.
The Board of Directors of the PDIC is composed of seven members: the Secretary of Finance (ex officio Chairman), the Governor of the Bangko Sentral ng Pilipinas (ex officio member), the President of the Corporation (appointed by the President of the Philippines), and four private sector members appointed by the President of the Philippines from a shortlist prepared by the Governance Commission for Government-Owned or -Controlled Corporations.
A member must be of good moral character, unquestionable integrity and responsibility, known probity and patriotism, recognized competence in economics, banking and finance, law, management administration, or insurance, and must be at least 35 years old.
The maximum deposit insurance coverage is Five hundred thousand pesos (₱500,000.00) per depositor for legitimate deposits in an insured bank as of the date of closure.
Excluded accounts include investment products such as bonds and securities, trust accounts, fictitious or fraudulent accounts, accounts arising from unsafe or unsound banking practices, and deposits that are proceeds of unlawful activities.
They are subject to imprisonment of not less than six (6) years but not more than twelve (12) years, or a fine ranging from Fifty thousand pesos (₱50,000.00) up to Ten million pesos (₱10,000,000.00), or both, at the discretion of the court.
Upon closure by the Monetary Board, the PDIC is designated as receiver and oversees the takeover and liquidation of the closed bank. It adopts one or a combination of liquidation modes, including conventional liquidation or purchase of assets and assumption of liabilities, manages assets, pays creditors, and distributes residual assets to shareholders.
The PDIC, in coordination with the Bangko Sentral ng Pilipinas, may commence resolution of a bank upon failure of prompt corrective action or request by the bank. It can determine resolution packages, identify qualified investors, authorize due diligence, conduct bidding, and implement resolution methods considering fair market value, availability of investors, least cost to the Deposit Insurance Fund, and depositor interests.
The PDIC shall underwrite or advance legal costs for those involved in actions arising from their functions in good faith under the Act, except in cases initiated by the PDIC against them, and such protection extends for a period even after resignation or separation from service.
The bank continues as a body corporate only for liquidation purposes, administration powers of directors and officers cease, all assets are placed under receiver's custody protected from garnishment or attachment, employees' relationships with the bank are terminated, the receiver may cancel disadvantageous contracts, and legal proceedings against the bank are managed or suspended accordingly.