QuestionsQuestions (PDIC REGULATORY ISSUANCE NO. 2012-1)
It is issued pursuant to Section 21(g) of Republic Act No. 3591, as amended (PDIC Charter), with approval by the PDIC Board of Directors through Resolution No. 2011-12-259 dated December 9, 2011.
“Deposit Records” include, among others, subsidiary ledgers of deposit liabilities, copies of time certificates of deposits, deposit agreements, signature cards, registers/logbooks for new deposit accounts, individual depositor files, computer systems and databases (with documentation), deposit liabilities control ledgers in the general ledger, deposit/withdrawal slips, debit/credit memos, and other similar records relevant to deposit liabilities.
A directive from PDIC prohibiting a bank and/or its responsible persons from offering/marketing/promoting (or continuing to offer/market/promote) deposit accounts/products or transactions that constitute or emanate from an Unsafe and/or Unsound Banking Practice, and from representing to the public that the said products/accounts/transactions are insured by PDIC.
It occurs when deposit accounts with outstanding balances exceeding the statutory maximum insured deposit are broken down and transferred into two or more accounts in the names of natural/juridical persons/entities with no beneficial ownership, within 120 days immediately preceding or during a bank-declared holiday or immediately preceding a Monetary Board closure order, for the purpose of availing maximum deposit insurance coverage.
Examples include: willful refusal to submit required reports; unjustified refusal to permit PDIC examination/audit; willful false statements/entries in required bank reports; submission of false material information related to PDIC financial assistance; splitting of deposits or creation of fictitious loans/deposit accounts; refusal to allow PDIC take-over upon closure; refusal to turn over/destroy/tamper records; fraudulent disposal/transfer/concealment of assets/liabilities of a closed bank under PDIC receivership; violation of exemptions from garnishment/levy/attachment/execution under the PDIC Charter and RA 7653; and willful failure/refusal to comply with PDIC Charter/PDIC rules/orders or conducting business in an unsafe/unsound manner as determined by PDIC and/or BSP.
Conducting business in an unsafe or unsound manner (as determined by the PDIC Board and/or BSP) constitutes an administrative offense under Section 2(j), and deposit accounts/transactions that constitute or emanate from such unsafe/unsound practices are excluded from deposit insurance coverage under the relevant PDIC Rules on deposit accounts/transactions excluded from insurance coverage.
A fine as may be determined by PDIC Board of Directors, but in no case to exceed P300,000.00 for each banking day of violation.
A fine as determined by the PDIC Board, but in no case to exceed 100% of the total amount split or fictitious loan created.
A fine as determined by the PDIC Board, but in no case to exceed the fair market value of the asset disposed/ transferred/concealed or the amount of liability concealed.
In no case shall the administrative fine exceed three (3) times the amount of damages or costs caused by the fraudulent/irregular/anomalous transactions for each day the violation subsists, considering attendant circumstances. “Damages or costs” includes financial benefit or gain to the bank or its responsible persons.
An additional fine equivalent to the amount of such financial benefit or gain.
Subject to due process, investigations are conducted in a summary manner without strictly adhering to technical rules of procedure and evidence applicable to judicial proceedings; such rules are only suppletory.
They must be filed with the Office of the General Counsel (OGC) of PDIC, and must be in writing stating the facts alleged and the name of the bank and/or the person involved.
It may conduct preliminary evaluation itself or refer to the Investigation Department; then it may: institute administrative charges (with proper authorization); conduct fact-finding under PDIC Regulatory Issuance No. 2005-02; refer the report to appropriate PDIC department or government agency; or advise the source to submit additional documents within 30 calendar days if the report is insufficient on its face.
After receipt of administrative charge, OGC immediately convenes AHC; within 10 calendar days, AHC issues notice to respondent requiring explanation; within 10 calendar days from receipt, respondent files verified answer and serves a copy to complaining witness if any; failure to file answer leads to default order. AHC may proceed to receive evidence, then prepare report with findings and recommendations; if answer is filed, AHC may set for hearing for further evidence using simplified procedures such as stipulations, issue simplification, evidence marking, and cross-examination if any.
Within 10 calendar days from receipt of the verified answer or declaration of default, or immediately upon termination of hearing, or after lapse of the period to submit position papers—then the AHC issues an order that the case is deemed submitted for report preparation.
The AHC must render a report within 30 calendar days from submission for preparation of the report to the PDIC Board. If the charge involves deposit accounts/transactions constituting or emanating from unsafe/unsound practices, the report may include a recommendation for issuance of a DCD.
Resolution becomes final and executory after 10 calendar days from receipt by parties unless a timely motion for reconsideration is filed. Grounds are new evidence materially affecting the resolution, or errors of fact/law/irregularities prejudicial to the aggrieved party. A request must be verified, addressed to the PDIC Board through the Corporate Secretary, and supported with affidavits/documents; it must be filed by an authorized bank representative. The resolution on reconsideration is immediately executory. No second motion for reconsideration is entertained.
No. An appeal does not stay immediate enforcement and satisfaction of the fine unless restrained by the Court of Appeals or Supreme Court under Section 22 of the PDIC Charter. Otherwise, the resolution is immediately executory unless the aggrieved party posts a cash bond equal to the fine or a surety bond (acceptable to PDIC) in double the amount of the fine.