QuestionsQuestions (PDIC REGULATORY ISSUANCE NO. 2009-005)
To promote and safeguard the interests of the depositing public by providing permanent and continuing insurance coverage of insured deposits, and to help develop a sound and stable banking system by determining banks’ overall financial condition and compliance with banking rules/regulations.
A Regular Examination is conducted independently or jointly with the BSP. It requires prior approval of both the PDIC Board of Directors and the Monetary Board (MB) and may be conducted only after an interval of at least twelve (12) months from the closing date of the last Regular Examination.
When there is a threatened or impending bank closure, as determined by the PDIC Board of Directors, and upon an affirmative vote of a majority of all PDIC Board members in coordination with the BSP.
It includes: (1) determination of solvency and liquidity position; (2) evaluation of asset quality and sufficiency of valuation reserves on loans and other risk assets; (3) review of all aspects of bank operations; (4) assessment of the risk management system (oversight functions, policies, procedures, internal control, and audit); (5) appraisal of overall management; plus review of compliance with applicable banking laws and rules (including PDIC issuances), follow-through of exceptions/violations from prior exams, and other relevant activities.
They may: (a) conduct a thorough examination of all bank affairs; (b) administer oaths and examine/take/preserve testimony of officers/agents; (c) compel presentation/submission of books, documents, or records; (d) inquire into/examine deposit accounts and related information when there is an unsafe/unsound practice finding (during prior BSP exam or ongoing PDIC exam); and (e) make a full and detailed report to the PDIC Board.
They can conduct either Regular or Special Examination, whether independently or jointly with the BSP, on behalf of the Corporation.
Examiners must give the bank a copy of the findings. The bank may respond during the exit conference and submit written comments within ten (10) calendar days after the exit conference. Findings (and comments) are then submitted to the PDIC Board for action; if joint examination, they are submitted to the BSP as well.
PDIC findings regarding violation and/or compliance with PDIC issuances, rules, and regulations are independently acted upon by the PDIC Board.
When PDIC or the BSP finds unsafe or unsound banking practice in accordance with BSP Circular 341 (series of 2002), as amended by BSP Circular No. 640 (series of 2009), or when other banking activities are determined by PDIC through appropriate resolution or regulation to be unsafe or unsound banking practice.
Prision mayor or a fine of not less than PHP 50,000 but not more than PHP 2,000,000, or both, at the discretion of the court, as provided in Section 21(f) of the PDIC Charter.
Examples include: (1) unjustified refusal to permit examination and/or audit; (2) willfully making a false statement or entry in any bank report or document submitted to PDIC; (3) willful failure/refusal to comply with any provision of the PDIC Charter, and/or conducting business in an unsafe and unsound manner as determined by the PDIC Board.
Administrative fines can still be imposed against the bank and responsible directors/officers/employees/agents pursuant to Section 21(g) of the PDIC Charter and its implementing regulatory issuance; the criminal penalties provision is without prejudice to administrative fines.
Fifteen (15) days after publication in any newspaper of general circulation in the country.
All other related PDIC rules and/or regulations inconsistent with this issuance are repealed or amended accordingly.