Question & AnswerQ&A (PDIC REGULATORY ISSUANCE NO. 2009-003)
The State, through the PDIC, safeguards the interests of the depositing public by providing insurance protection on all Legitimate Deposits held by bona fide depositors. All Legitimate Deposits over which a depositor has Beneficial Ownership shall be added together for deposit insurance purposes.
Legitimate Deposits refer to money or its equivalent received by a bank as deposits in the usual course of business, recorded in the books of the bank as such, and opened in accordance with established forms and requirements of the Bangko Sentral ng Pilipinas and/or the PDIC.
A Bona Fide Depositor is a natural or juridical person or entity who/which is the owner of a deposit as determined by the PDIC under this Regulatory Issuance, and whose deposit is recorded in the books of the bank.
Beneficial Ownership exists when a deposit is maintained in the same right and capacity for a depositor’s benefit, whether in his own name or in the name of others.
Valid Consideration is that which gives cause to the transfer or break up of deposits, such as loans, payment for services or goods, or donations.
PDIC will recognize a depositor as the beneficial owner if one or several deposit accounts in the name of others are maintained in the same right and capacity for the benefit of that depositor, provided certain documentary evidence and conditions are met as outlined in the regulations.
The transferee can be recognized if: 1) The breakup and transfer were for a valid consideration; 2) The details of the transfer are contained in the bank’s deposit account records; 3) Copies of documents supporting the transfer are in the custody of the bank upon PDIC takeover; and 4) The transferee is a qualified relative of the transferor, proven by relevant documents.
Deposit Splitting occurs when a deposit account exceeding the maximum insured amount is broken and transferred into two or more accounts in the names of persons/entities with no beneficial ownership within 120 days immediately preceding or during a bank-declared holiday or closure, for the purpose of availing maximum deposit insurance. The elements include existence of source accounts over MDIC, breakup and transfer to others without beneficial ownership, and timing of the transfer within the prescribed period.
Violations may result in prision mayor or a fine ranging from P50,000 to P2,000,000, or both, at the court's discretion. Additionally, administrative fines and sanctions may be imposed by the PDIC Board of Directors, including fines up to 100% of the total amount split.
Banks must inform depositors of these rules by posting the Regulatory Issuance in bank premises and issuing internal circulars to ensure compliance. They must also maintain complete, accurate, and updated records of all deposit accounts and transactions as required under PDIC Regulatory Issuance No. 2006-01.