Professional Documents
Culture Documents
Banking Laws
Banking Laws
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BANKING LAWS
GOVERNING LAW
Banking Institution are governed by the following
laws:
A.
B.
Philippine
Deposit
Insurance
Corporation Act (R.A. No. 3591)
Government
Depositors
Investors
Creditors
Borrowers
BAR QUESTION:
BAR QUESTION:
Theory of Cognition vs. Theory of Manifestation
(1997)
The Civil Code adopts the theory of cognition, while
the Code of Commerce generally recognizes the
theory of manifestation, in the perfection of
contracts. How do these two theories differ?
SUGGESTED ANSWER:
Under the theory of cognition, the acceptance is
considered to effectively bind the offeror only from
the time it came to his knowledge. Under the theory
of manifestation, the contract is perfected at the
moment when the acceptance is declared or made by
the offeree.
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GENERAL CONCEPTS
BANKS
QUASI-BANKS
FINANCIAL INTERMEDIARIES
Authority to Register/Incorporate
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of the mortgagors title, in case of a banking
institution, it must exercise due diligence before
entering into said contract, and cannot rely upon on
what is or is not annotated on the title. Reason:
Before a loan is approved, representatives are sent
to the premises offered as collaterals so as to
investigate who the real owners are (DBP vs. CA,
331 SCRA 267).
CONSEQUENCES
1
2
OF NATURE OF
BUSINESS :
1.
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ORDINARY
CORPORATION
BANKING
CORPORATION
May be a stock or
non-stock
corporation
Must generally be a
stock corporation
May be registered
with
the
SEC
without
any
certificate
of
authority issued by
a
government
agency.
Must
secure
a
certificate of authority
from the Monetary
Board before it can
register with SEC.
May
purchase/acquire its
own shares for a
legitimate corporate
purpose; provided
that,
it
has
unrestricted
retained earnings in
its books to cover
the shares to be
purchased/
acquired.
Must be composed
of 5 to 15 directors,
each of whom shall
own at least one (1)
share of the capital
stock
of
the
corporation.
Also composed of 5 to
15 directors. In case
of
merger
or
consolidation,
the
number of directors
shall not exceed 21
(Sec. 17).
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May
declare
dividends out of its
unrestricted
retained earnings.
UNIVERSAL BANK
May
not
declare
dividends, if any of the
conditions set forth
under Sec. 57 are
present.
COMMERCIAL BANK
Authority to exercise
additional
powers
other
than
those
authorized
for
commercial banks
No
such
powers
additional
Authorized to engage in
quasi-banking functions
without
need
for
approval
Not so authorized
EQUITY INVESTMENTS
Powers
1
The
powers 1. General powers
authorized for a
incident to
commercial bank;
corporations
2 The powers of an 2. Such powers as may
investment house;
be necessary to carry
and
on the business of
3. The power to invest
commercial banking:
in
non-allied
a. Accepting drafts
enterprises (Sec.
and issuing letter of
23).
credits;
b. Discounting and
negotiating
promissory
notes,
drafts,
bills
of
exchange and other
evidence of debt;
c.
Accepting
or
creating
demand
deposits;
receiving
other
types
of
deposits and deposit
substitutes;
d. Buying and selling
foreign exchange and
other debt securities;
e. Extending credit.
(Sec. 29)
POINT
OF
DISTINCTION
Total investment
in allied
enterprises
Total investment
in non-allied
enterprises
Equity investment
in any one
enterprise
OTHER BANKS
UNIVERSAL
BANK
(Sec. 24-28)
COMML BANK
50%
35%
of net worth
of net worth
50%
N/A
(Sec. 30-32)
of net worth
25%
25%
of net worth
of net worth
(Allied only)
Equity investment
in financial allied
enterprise: thrift
bank, rural bank
or any financial
allied enterprise
(Sec. 25)
100%
100%
of equity
of equity
In other financial
allied
enterprises,
investment shall
remain a
minority holding
(Sec. 31).
? A publicly-listed
bank may own up
to 100% of the
voting stock of
only one other UB
/ CB (Sec. 25).
Equity investment
in
non-financial
allied enterprises
Equity investment
in a single nonallied enterprise
UNIVERSAL &
COMMERCIAL BANK
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100%
100%
of equity
of equity
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3
voting stock in
that enterprise
Equity investment
in Quasi-Banks
40%
40%
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FUNCTIONS OF BANKS
BASIC FUNCTIONS:
NET WORTH
The total of the unimpaired paid-in capital including
paid-in surplus, retained earnings and undivided profit,
net valuation reserves and other adjustments as may be
required by the Bangko Sentral (Sec. 24).
1. Loan Function
2. Deposit Function
OTHER FUNCTIONS
Universal banks and commercial banks may also
exercise any of the following functions:
a
Receive in custody funds, documents and
valuable objects;
b
Act as financial agent and buy and sell, by
order of and for the account of their customer,
shares, evidences of indebtedness and types
of securities;
c
Make collection and payments for the account
of others and perform such other services for
their customer as are not incompatible with
banking business;
d
Upon prior approval of the Monetary Board, act
as managing agent, adviser, consultant or
administrator of investment management/
advisory/consultancy accounts; and
e
Rent out safety deposit boxes.
A. LOAN FUNCTION
Requirement for Grant of Loans
Before granting a loan, a bank must ascertain that
the debtor is capable of fulfilling his commitments to the
bank.
Rules:
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1.
2.
Classification of Loans
UNCLASSIFIED
LOANS
Those that do not
have a greaterthan
normal risk and the
borrower
have
apparent ability to
satisfy it in full and no
loss
in
ultimate
collection
is
anticipated.
Limit
on
accommodations
(Sec. 35)
DOSRI
Accounts
(Directors,
Stockholders, and Related Interests)
Officers,
CLASSIFIED LOANS
Those
that
have
extraordinary risks of
loss in collection due to
some defects such as
bad debts or those
under litigation.
loans,
credit
and
guarantees
1.
b.
c.
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3.
4. Related Interest
a. Spouse, relatives within first degree of
consanguinity or affinity, or relative by legal
adoption of a DOS, partnerships of which a
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b.
c.
a.
b.
BAR QUESTION:
BANKS;
RESTRICTIONS
ON
LOAN
ACCOMMODATIONS (2006)
Pio is the president of Western Bank. His wife
applied for a loan with the said bank to finance an
internet cafe. The loan officer told her that her
application will not be approved because the grant of
loans to related interests of bank directors,
officers, and stockholders is prohibited by the
General Banking Law. Explain whether the loan
officer is correct. (5%)
SUGGESTED ANSWER:
Section 36 of the General Banking Law of 2000 does
not entirely prohibit directors or officers of the
bank, directly or indirectly, from borrowing from the
bank. In this case, Pio is the president of Western
Bank, which makes him an officer, director and
stockholder of the said bank. The General Banking
Law provides for additional restrictions to the bank
before it can lend to its directors or officers. A
written approval of the majority vote of all the
directors of the bank, excluding the director
concerned, is required. Furthermore, such dealings
must be upon terms not less favorable to the bank
than those offered to others ( Section 1326, Central
Bank's "Manual of Regulations for Banks and Other
Financial Intermediaries, cited in Ranioso v. CA, G.R.
No. 117416, December 8, 2000 ). A violation of this
provision will cause his or her position to be declared
vacant and the erring director or officer subjected
to the penal provisions of the New Central Bank Act.
Restrictions
NCBA:
under
the
GBL
and
COLLATERALS
1. Value of collaterals
The loan shall not exceed 75% of the appraised
value of the real property plus 60% of the appraised
value of the improvements or 75% of the appraised
value of the chattel ( Secs. 37 & 38, GBL )
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from
examination
is
B. DEPOSIT FUNCTION
Kinds of Deposits between a Bank and
its Depositor
strictly
1.
As debtor-creditor
a. Savings
b. Time
c. Demand
Characteristics:
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i
ii
iii
iv
v
2.
As lessor-lessee
a. Safety deposit boxes the relation between a
bank renting out safety deposit boxes and its
customer with respect to the contents of the
box is that of a bailor and bailee the bailment
for hire and mutual benefit has been adopted in
this jurisdiction. It cannot be considered as a
contract of lease because the full possession
and control of the safety deposit box is not
given to the renters (Sia vs. CA, 222 SCRA 24
[1993]).
3.
As trustee-trustor
a. Trust account
4.
As bailee-bailor
a. Deposit strictly for safekeeping and for specific
purposes
5.
As agent-principal:
a. Deposit of check for collection
b. Deposit for specific purpose
c. Deposit for safekeeping
Depositors:
1
Minors :
a at least seven years of age
b able to read and write
c
not disqualified by any incapacity
d it should only be savings or time deposits
Note: Parents may deposit for their minor children
or wards (Sec.1 PD No.734)
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commercial bank
CANNOT accept
demand deposit
Temporary overdrawing
against current accounts
shall not be allowed
unless caused by normal
bank charges and other
fees incidental to
handling such accounts.
A bank is negligent if it
allows the withdrawal
without requiring the
presentation of a
passbook. (BPI v. CA)
Drawings against
uncollected deposits
(uncleared checks) are
generally prohibited.
NOW ACCOUNTS
(Negotiable Order of
Withdrawal)
Interest bearing deposit
accounts that combine
the payable on demand
feature of checks and
investment feature of
savings account.
TIME DEPOSITS
Kinds of Deposits
DEMAND DEPOSITS
SAVINGS ACCOUNT
Note:
Only a universal or
commercial bank can
accept or create demand
deposits.
Evidenced by a
passbook.
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July 21, 2000) exception: Foreign currency deposits
may be a numbered account. However, the law
requires that the necessary measures are undertaken
by the bank to record and establish the true identity of
the depositor.
Individual
2.
Joint
a. And account
Co-ownership
The signatures of both co-depositors are
required for withdrawals.
b.
And/or account
Either one of the co-depositors may
deposit and withdraw from the account
without the knowledge, consent and
signature of the other. And upon the death
of one, the survivor may withdraw the
entire balance on deposit.
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Deposit substitutes
An alternative form of obtaining funds from the public,
other
than
deposits,
through
the
issuance,
endorsement, or acceptance of debt instruments for the
borrowers own account, for the purpose of re-lending or
purchasing of receivables and other obligations (Sec.
95, RA 7653).
DEPOSIT
DEPOSIT
SUBSTITUTE
No security given to
guarantee repayment;
the depositor relies on
the
stability
and
reputation
of
the
bank.
Guaranteed
by
certificates and other
instruments.
(Handbook on Bank
Deposits, A. Viray,
1998 ed.)
PROHIBITIONS
A. ON BANKS :
1.
2.
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b
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c.
3.
4.
5.
Unauthorized
advertisement
representation (Sec. 64); or
6.
C. ON BORROWERS:
1.
2.
3.
4.
or
business
B. ON
1.
2.
5.
a.
b.
The
making
of
false
reports
or
misrepresentations or suppression of material
facts by personnel of the BSP shall constitute
fraud and shall be subject to administrative and
criminal sanctions.
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unsound manner, the MB shall consider any of the
following circumstances:
1. The act or omission has resulted or may result in
material loss or damage, or abnormal risk or danger
to the safety, stability, liquidity or solvency of the
institution;
2.
3.
4.
Filipino
In case of a Filipino individual or a domestic nonbank corporation, each may own up to 40% of the
outstanding voting stock of a local bank.
2.
Foreign
Foreign individuals and non-bank corporations may
own or control up to an aggregate of 40% of the
voting stock of a domestic bank.
OWNERSHIP OF STOCKS OF A
DOMESTIC BANK
1.
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2.
1.
2.
S TOCKHOLDINGS OF F AMILY
OR R ELATED I NTEREST
GROUPS
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in all transaction by such corporations or related group
of person with the bank. (Sec 13, GBL)
2. Mortgagor is a
juridical person At
any time before the
registration of the
certificate of
foreclosure sale
which in no case
shall be more than 3
months after
foreclosure,
whichever is earlier.
Redemption price:
Amount due under the mortgage deed + interest
+ all the cost and expenses incurred by the
bank or institution from the sale and custody of
the property less the derived income (Sec 78;
Union Bank vs. CA, GR 134068, June 25,
2001)
EXCEPTIONS:
1. As shall be necessary for its own use in the conduct
of its business, provided:
a. The total investment in such real estate and
improvements shall not exceed 50% of the
combined capital accounts; and
b.
2.
RULES ON FORECLOSURE OF A
REAL ESTATE MORTGAGE BY A
MORTGAGEE-BANK
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EXTRAJUDICIAL
Right of redemption
Within 1 year from
registration of the
foreclosure sale
(exception to Rule 68)
1. Mortgagor is a
natural person
Within one year after
the registration of
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EXCEPTIONS:
1. As otherwise provided under Sec. 5 of the Rural
Bank Act
2. Where such service is incidental to financial
assistance provided by the government-owned or
-controlled corporation to the bank
3. As otherwise provided under existing laws.
Prohibitions:
1. No trust entity shall, for account of the trustor or the
beneficiary of the trust, purchase or acquire
property from, or sell, transfer, assign or lend
money or property to, purchase debt from
instruments of, any of the departments, directors,
officers, stockholders or employees of the trust
entity, including relatives within the 1st degree of
consanguinity or affinity, or the related interests, of
such directors, officers and stockholders, unless the
transaction is specifically authorized by the trustor
and the relationship of the trustee and the other
party involved in the transaction is fully disclosed to
the trustor or beneficiary of the trust prior to the
transaction (Sec. 80, GBL).
2. The trust business and all funds, properties or
securities received by any trust entity as executor,
administrator, guardian, trustee, receiver or
depositary shall be kept separate and distinct from
the general business, including all other funds,
properties, and assets, of such trust entity (Sec. 87,
GBL).
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Purpose: To maintain a central monetary authority that
shall function and operate as an independent and
accountable body in the discharge of its responsibilities
concerning money, banking and credit.
P RIMARY
OBJECTIVES :
1.
2.
8.
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C OMPOSITION :
Seven members consisting of:
1.
2.
3.
R ESPONSIBILITIES :
1.
2.
3.
P OWERS / FUNCTIONS :
1.
2.
3.
4.
5.
Financial advisor of the government (Secs. 123124) Under Article VII, Sec. 20 of the 1987
Constitution, the President may contract or
guarantee foreign loans but with the prior
concurrence of the Monetary Board.
Source of credit (Secs. 61-63, 81-89, 109)
Supervisor of the banking system (Sec. 25) shall
include the power to:
a. Examine, extending to enterprises wholly or
majority-owned or controlled by the bank (Sec.
6.
7.
2.
3.
4.
2.
3.
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interest in any private bank in the Philippines, within
one (1) year prior to his appointment (Sec. 9);
4.
5.
6.
NO RESTRAINING ORDER
BSP
AGAINST
OR
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CORPORATE POWERS
1.
2.
3.
4.
5.
6.
OF THE
BSP
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7.
CONSERVATORSHIP OF A BANK OR
QUASI-BANK
Ground: State of continuing inability or unwillingness to
maintain a condition of liquidity deemed adequate to
protect the interest of depositors and creditors.
A conservator appointed by the BSP may take over
without the need of first declaring the bank
insolvent.
Duration: Not to exceed 1 year
Effects:
1. Bank/quasi-bank retains juridical personality
2. Not a precondition to the designation of a receiver
Powers of conservator:
1. To take charge of the assets, liabilities, and the
management thereof;
2.
3.
4.
Termination:
1.
2.
Under GBL
1. Inability
to
pay
liabilities as they become
due in the ordinary
course of business, but
not including inability to
pay those caused by
extraordinary demands
induced
by
financial
panic in the banking
community;
1. Notification to the
BSP
or
public
announcement of a
bank holiday (Sec.
53, GBL)
2. Insufficiency
of
realizable assets to meet
its liabilities;
2. Suspension of
payment of deposit
liabilities continuously
for more than 30
days (Sec. 53, GBL)
3. Inability to continue
business
without
involving probable losses
to its depositors or
creditors; or
3. Persistence
in
conducting business
in an unsafe or
unsound
manner.
(Sec. 56, GBL)
4. Willful violation of a
cease and desist order
that has become final,
involving
acts
or
transactions
which
amount to fraud or a
dissipation of the assets
of the institution (Sec.
30)
Receiver:
1. Banks PDIC
2. Quasi-banks Any person
competence in banking or finance
QUASI-BANK/CLOSURE
Receivership is equivalent to an injunction to restrain
the bank in any way. Thus, the appointment of a
of
recognized
Functions:
1. Immediate gathering and taking charge of all the
assets and liabilities of the institution and
administering them for the benefit of creditors
2. General powers of a receiver
3. Determination ASAP but not later than 90 days,
whether
the
institution
should
undergo
rehabilitation or liquidation.
Note the distinctions between rehabilitation and
liquidation.
RECEIVERSHIP OF A BANK OR
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1.
2.
3.
4.
5.
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CASE DIGEST
LIQUIDATION
Facts:
Based on the financial reports submitted to the
Central Bank, which states that the Financial condition
of The Triumph Savings Bank (TSB) is one of insolvency
and its continuance in the business world involve
probable loss to its depositors and creditors, the
Monetary Board issued a Resolution ordering the
closure of TSB, forbidding it from doing business in the
Philippines, placing it under receivership and appointing
Ramon V. Taiaoqi as receiver. The TSB filed a complaint
assailing the resolution on the ground of lack of prior
notice and hearing
Grounds:
1. The condition of the bank is one of insolvency or
that its continuance would involve probable loss to
its depositors and creditors.
2.
Procedure:
1. Receiver shall file ex parte, with the proper RTC, a
petition for assistance in the liquidation of the
institution pursuant to a liquidation plan adopted by
the PDIC for general application to all closed banks.
In case of quasi-banks, the liquidation plan shall be
adopted by the Monetary Board.
2.
3.
Issue:
Whether or not a Monetary Board Resolution
be annulled on the ground of lack of prior notice and
hearing.
Ruling:
Section 29 of the Central Bank Act does not
contemplate prior notice and hearing before a bank may
be declared to stop operations and placed under
receivership. When it provides for the filing of the case
within 10 days after the receiver takes charge of the
assets of the bank, it is unmistakable that the assailed
actions should precede the filing of the case. Plainly, the
legislature could not have intended or authorize no
prior notice and hearing in the closure of the bank and
at the same time allow the suit to annul it on the basis of
the absence thereof.
This close now and hear later scheme is
grounded on practical and legal consideration to prevent
the unwarranted dissipation of the banks asset and as a
valid exercise of the police power to protect the
depositors, creditors, stockholders and the general
public.
4.
5.
LEGAL TENDER
MANDATORY REQUIREMENTS FOR BANK
CLOSURE
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3.
1.
2.
2.
Rules:
1. Notes and coins called in for replacement shall
remain legal tender for a period of one year from
the date of call.
3 IMPORTANT TOOLS
PRICE STABILITY
TO
ACHIEVE
2.
MONETARY STABILIZATION
PROHIBITED ACTS:
1.
2.
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may not be examined, inquired or looked into by any
person, governmental bureau, or office.
a
b
EXCEPTIONS:
A.
1.
2.
In cases of impeachment;
3.
4.
3.
BAR QUESTION:
Banks: Secrecy of Bank Deposits; Garnishment
(2004)
CDC maintained a savings account with CBank. On
orders of the MM Regional Trial Court, the Sheriff
garnished P50,000 of his account, to satisfy the
judgment in favor of his creditor, MO. CDC
complained that the garnishment violated the Law on
the Secrecy of Bank Deposits because the existence
of his savings account was disclosed to the public.
(5%) Is CDC's complaint meritorious or not? Reason
briefly.
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4.
SUGGESTED ANSWER
No. CDC's complaint is not meritorious. It was held in
China Banking Corporation v. Ortega, 49 SCRA
A.
B.
C.
1.
3.
D.
1.
2.
2.
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2.
E.
Provides
for
another
exception
to
confidentiality, which is applicable to both peso
and foreign currency deposits.
SUGGESTED ANSWER:
No, because the Foreign Currency Deposit Act (R.A.
No. 6426), including its punitive provisions, refers to
foreign currency deposits accounts constituted
within the Philippines. It has no application at all to
accounts, even though they are banks, opened and
constituted abroad
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VS .
D ESIERTO , G.R. N O .
135882,
Penalties
Imprisonment of not more than 5 years or a fine not
more than P20,000 or both, in the discretion of the
court.
Impeachment
In impeachment proceedings, the impeachment
court may inquire into bank deposits. Thus, during the
impeachment proceedings against former President
Estrada, Chief Justice Davide ruled that Clarissa
Ocampo could testify on the Jose Estrada/Jaime
Dichaves accounts maintained with Equitable PCIB
Bank, over the objections of the defense that this would
violate the Bank Secrecy Law. Basis for this ruling was
that the inquiry would be made in the course of an
impeachment proceeding.
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authorization does not suffice. This consent may be
given voluntarily. In some cases, however, the consent
is involuntary because the law requires it.
Thus, Section 26 of the New Central Bank Act as
implemented by BSP Circular No. 170, series of 1998,
requires a director, officer or stockholder of a bank or
their related interests to submit a written waiver of the
secrecy of all his deposits of whatever nature in all
banks of the Philippines in favor of the Bangko Sentral,
if he applies for a DOSRI loan. However, the
information obtained from the examination remains
confidential and may be used by BSP examiners only in
legal action it may initiate involving the said deposits.
A waiver of the Bank Secrecy Law is also required
in case of loans secured by a hold-out or an assignment
of certificates of time deposits. (Section X315, Manual of
Regulations for Banks).
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In China Banking Corporation v. Court of Appeals,
(193 SCRA 452 (1991) the Supreme Court held that the
garnishment of a bank deposit does not violate the Bank
Secrecy Law. Said the court:
It is clear from the discussion of the
conference committee report on x x x Republic Act.
No. 1405, that the prohibition against examination of
or inquiry into a bank deposit under Republic Act
No. 1405 does not preclude its being garnished to
insure satisfaction of a judgment. Indeed, there is
no real inquiry in such a case, and if the existence
of the deposit is disclosed, the disclosure to evade
payment of their just debts, even if ordered by the
Court, through the expedient of converting their
assets into cash and depositing the same in a
bank.(Phil. Commercial & International Bank v.
Court of Appeals, 93 SCRA 452 (1991).
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1.
2.
Covered Entities:
1.
Banks
2.
Non-banks
3.
Quasi-banks
4.
Trust entities
5.
BAR QUESTION:
Banks; Secrecy of Bank Deposits (2000)
GP is a suspected Jueteng lord who is rumored to be
enjoying police and military protection. The envy of
many drug lords who had not escaped the dragnet of
the law, GP was summoned to a hearing of the
Committee on Racketeering and Other Syndicated
Crimes of the House of Representatives, which was
conducting a congressional investigation in aid of
legislation on the involvement of police and military
personnel, and possibly even of local government
officials, in the illegal activities of suspected
gambling and drug lords. Subpoenaed to attend the
investigation were officers of certain identified
banks with a directive to them to bring the records
and documents of bank deposits of individuals
mentioned in the subpoenas, among them GP. GP and
the banks opposed the production of the banks
records of deposits on the ground that no such
inquiry is allowed under the Law on Secrecy of Bank
Deposits (RA 1405 as amended). Is the opposition of
GP and the banks valid? Explain.
SUGGESTED ANSWER:
Yes. The opposition is valid. GP is not a public official.
The investigation does not involve one of the
exceptions to the prohibition against disclosure of
any information concerning bank deposits under the
Law on Secrecy of Bank Deposits. The Committee
conducting the investigation is not a competent court
or the Ombudsman authorized under the law to issue
a subpoena for the production of the bank record
involving such disclosure.
COVERED TRANSACTION:
Transaction, in cash or other equivalent monetary
instrument in excess of P500,000, within one banking
day.
SUSPICIOUS TRANSACTIONS :
Transactions with covered institutions regardless of the
amounts involved, where any of the following
circumstances exists:
1.
2.
3.
4.
5.
6.
7.
MONEY LAUNDERING:
A crime whereby the proceeds of an unlawful activity are
transacted, thereby making them appear to have
originated from legitimate sources. It is committed by
the following:
1.
Purposes:
Notes of
hotjurist
in foro conscientiae
Page
2.
3.
P REVENTION
L AUNDERING
1
OF
M ONEY
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BAR QUESTION:
BANKS; SECRECY OF BANK DEPOSIT; AMLC
(2006)
Rudy is jobless but is reputed to be a Jueteng
operator. He has never been charged or convicted of
any crime. He maintains several bank accounts and
has purchased 5 houses and lots for his children
from the Luansing Realty, Inc. Since he does not
have any visible job, the company reported his
purchases to the Anti-Money Laundering Council
(AMLC). Thereafter, AMLC charged him with
violation of the Anti-Money Laundering Law. Upon
request of the AMLC, the bank disclosed to it Rudy's
bank
deposits
amounting
to
P100
Million.
Subsequently, he was charged in court for violation
of the Anti-Money Laundering Law.
1. Can Rudy move to dismiss the case on the
ground that he has no criminal record? (2.5%)
SUGGESTED ANSWER:
No. Under the Anti-Money Laundering Law, Rudy
would be guilty of a "money laundering crime"
committed when the proceeds of an "unlawful
activity," like Jueteng operations, are made to
appear as having originated from legitimate sources.
The money laundering crime is separate from the
unlawful activity of being a Jueteng operator, and
requires no previous conviction for the unlawful
activity (See also Sec. 3, Anti-Money Laundering Act
of 2001).
J URISDICTION :
b.
SUGGESTED ANSWER:
Luansing Realty, Inc. is a real estate company, hence
it is not a covered institution under Section 3 of the
Anti-Money
Laundering
Act.
Only
banking
institutions, insurance companies, securities dealers
and brokers, pre-need companies and other entities
administering or otherwise dealing in currency,
commodities or financial derivatives are covered
institutions. Hence, Luansing Realty, Inc. may not use
the Anti-Money Laundering Act to refuse to transfer
to the buyer ownership of the houses and lots.
Notes of
hotjurist
in foro conscientiae
Page
3. In disclosing Rudy's bank accounts to the
AMLC, did the bank violate any law? (2.5%)
SUGGESTED ANSWER:
No, the bank did not violate any law. The bank being
specified as a "covered institution" under the AntiMoney Laundering Law, is obliged to report to the
AMLC covered and suspicious transactions, without
thereby violating any law. This is one of the
exceptions to the Secrecy of Bank Deposit Act.
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2.
SUGGESTED ANSWER:
F UNCTIONS :
A.
Insurance
The PDIC assesses and collects insurance
assessments from member-banks to insure
member-banks deposit accounts. In case of bank
closures, the PDIC processes and services claim
for insured deposits. Deposits are insured up to a
maximum coverage of P250,000 per depositor.
BAR QUESTION:
BANKS; SECRECY OF BANK DEPOSITS (1991)
The law (RA 6832) creating a Commission to conduct
a Thorough Fact-Finding Investigation of the Failed
Coup detat of Dec 1989, Recommend Measures to
Prevent the Occurrence of Similar Attempts At a
Violent Seizure of Power and for Other Purposes,
provides that the Commission may ask the Monetary
Board to disclose information on and/or to grant
authority to examine any bank deposits, trust or
investment funds, or banking transactions in the
name of and/or utilized by a person, natural or
juridical, under investigation by the Commission, in
any bank or banking institution in the Philippines,
when the Commission has reasonable ground to
believe that said deposits, trust or investment funds,
or banking transactions have been used in support or
in furtherance of the objectives of the said coup
detat. Does the above provision not violate the Law
on Secrecy of Bank Deposits (RA 1405)?
B.
C.
Bank Rehabilitation
The PDIC may grant financial assistance to
distressed banks if it is proven to be a less costly
alternative than closure.
D.
SUGGESTED ANSWER:
The Law on Secrecy of Bank Deposits is itself merely
a statutory enactment, and it may, therefore, be
modified, or amended (such as by providing further
exceptions therefrom), or even repealed, expressly
or impliedly, by a subsequent law. The Secrecy of
Bank Deposits Act did not amount to a contract
between the depositors and depository banks within
the meaning of the non-impairment clause of the
Constitution. Even if it did, the police power of the
State is superior to the non- impairment clause. RA
Bank Examination
E.
Notes of
hotjurist
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Page
25 of 27
INSURANCE FUNCTION
Ruling:
1.
2.
3.
Insured deposits
4.
5.
6.
7.
Manner of payment:
a. Cash
b. Transferred deposit A deposit in an insured
bank made available to a depositor by the
PDIC as payment of the insured deposit of
such depositor in a closed bank and assumed
by another insured bank.
Transferred deposits
SPECIAL
1.
Case Digest
RULES
Facts:
2.
3.
Issue:
Whether or not the PDIC is liable for the
plaintiffs claims.
4. a.
Notes of
hotjurist
in foro conscientiae
Page
aggregate of the interests of each co-owner
over several joint accounts, whether owned by
the same or different combinations of
individuals, juridical persons or entities, shall
likewise be subject to the maximum insured
deposit of Two hundred fifty thousand pesos
(P250,000.00).
2.
LEGAL CONSEQUENCE
The unclaimed balances may be subject of escheat
proceedings, after proper publication and the depositors
still do not lay claim to them.
1.
Money;
Bullion;
Security; or
who is dead, or
FOREIGN CURRENCY
DEPOSIT
PESO DEPOSIT
Governed by R.A.
No. 1405
4
exceptions
+
exceptions found in
special laws
1 exception + 1 provided
under AMLA (R.A. No.
9160)
May be garnished
or attached (not a
violation of R.A. No.
1405)
(R.A. N O . 3936)
ELEMENTS OF UNCLAIMED
BALANCES
26 of 27
OTHER FEATURES:
1.
2.
Notes of
hotjurist
in foro conscientiae
Page
Note: This case does not constitute another
exception, the SC only ruled as such due to the
special circumstances of the said case.
( RA 3765)
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SUGGESTED ANSWER:
a)
There was no substantial compliance with
the Truth in Lending Act. The law provides that the
creditor must make a full disclosure of the credit
lost. The statement that the total amount due
includes the principal and the financial charges,
without specifying the amounts due on each portion
thereof would be insufficient and unacceptable.
b)
A violation of the Truth in Lending Act will
not adversely affect the validity of the contract
itself.
c)
It would allow Dana to refuse payment of
financial charges or, if already paid, to recover the
same. Dana may also initiate criminal charges against
the creditor.
***
GOD SPEED!!!
BAR QUESTION:
Notes of
hotjurist
in foro conscientiae