Chapter 3: Deposit Functions of Banks Items Not in Process of Collection” which is part of “Other Assets: in the
I. Kinds of Deposits Statement of Condition
A. Demand Deposits
 All those liabilities of Bangko Sentral and other banks
 Denominated in PH currency
 Subject to payment in legal tender upon demand by presentation of
depositor’s check
 Banks
o May accept or create demand deposits subject to withdrawal by
check
 A Universal/Commercial Bank
o May accept or create demand deposits subject to withdrawal by
check without prior authority from BSP
 A Thrift/Rural/Cooperative Bank
o May accept or create demand deposits upon prior authority of the
BSP
 Sec. 33, GBL
o A bank other than universal or commercial, cannot accept or create
demand deposits except upon prior approval of and subject to such
conditions and rules as may be prescribed by the Monetary Board1
 Sec. 58, NCBA
o Only banks duly authorized to do so may accept funds or create
liabilities payable in pesos upon demand
o By presentation of checks
o And such operations shall be subject to the control of the MB.
 Manner of making deposit
b. DAUDS
o Account deposits in the form of deposit slips prepared and signed
by the depositor or his agent/representative
o With current account number to which the deposit is to be credited
o With name of the depositor or current account holder,
o Date of deposit
o Amount of deposit
o It has an upper portion or stub detached and given to depositor or
his agent; lower portion is retained by the bank
o Some in duplicate
2. Current Accounts of Bank Officers and Employees
1. Temporary Overdrawings; Drawings Against Uncollected Deposits
The following shall govern TO and DAUDS:
a. Temporary Overdrawings
 TO shall not be allowed, unless caused by normal bank charges and
other fees incidental to handling such accounts
 Violation – subject to fine of 1/10 of 1% per day of violation, computed
on the basis of the amount of overdrawings or fines determined but MB,
but not to exceed P30,000a day for each violation , whichever is lower
 Technical Overdrawings arising from “force posting” in-clearing checks
shall be debited by banks under “Returned Checks and Other Cash
1 MB
 Items under this account shall consist only of in-clearing
checks which may result in “technical overdrawn” accounts and
which shall be reversed the following day
 Checks under “Returned Checks” shall either be returned or honored the
following day before clearing
 Items used as cover for honored checks should only consist of: (C2BT-
PDF)
 Cash
 Cashier/Manager/Certified Checks
 Bank Drafts
 Treasury Warrants
 Postal Money Orders
 Duly funded “On us” Checks
 Fund transfers/credit memos within the same bank
representing proceeds of loans granted under existing
regulations
 Peso demand deposits accounts maintained by foreign correspondent
banks with commercial banks shall not be subject to the above-
mentioned regulations. Provided that:
a. The maintenance of non-resident correspondent bank’s peso
checking accounts had overdrawings are covered by reciprocal
arrangement
b. Temporary overdrawings are covered within 15 days from the
overdrawings are incurred
c. Such accounts are credited only through foreign exchange
inward remittance
 Shall be prohibited except when drawings are made against:
 Uncollected deposits representing
manager/cashier/treasurer checks
 Treasury warrants
 Postal money orders
 Duly funded “on us” checks, which may be permitted
at the discretion of each bank.
 Following are prohibited from maintaining demand deposits or current
accounts with banking office in which they are assigned:
 All officers
 Employees of bank’s cash department/cash units
 Other employees who have direct and immediate
responsibility in the handling of transactions and/or
records pertaining to demand deposits or current
accounts
 Prohibition shall include spouses and relatives within the second degree
of consanguinity and affinity of the officers and employees
 And business interests of such officers and employees, their spouses and
relatives within the 2nd degree of consanguinity and affinity
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  Or Partnerships/corporations where they control at least a majority of
the capital or the outstanding subscribed capital stock (voting and non-
voting) of the corporation.
3. Checks
 A check is a bill of exchange drawn on a bank payable on demand
 A written order addressed to a bank or persons carrying on the business of
banking, by a party having money in their hands, requesting them to pay on
presentment, to the person named therein, or to bearer or order, a named
sum of money
 Fixed savings and current deposits of money shall be governed by laws on
simple loan
 Relationship between the bank and the depositor is that of debtor and
creditor
 Contract – banker agrees to pay checks drawn by the depositor provided that
said depositor has money in the hands of the bank.
4. Duty of Banks to Honor Checks
 Bound to honor his checks to the extent of the amount of his deposits
 Failure to pay when the deposit is sufficient entitles the drawer to substantial
damages without any proof of actual damages.
 A bank is not liable for its refusal to pay a check on account of insufficient
funds, notwithstanding the fact that a deposit may be made later in the day
 To maintain a suit to recover a specific amount, he must first shoe that he
had sufficient funds to meet his demand
 A bank performs its full duty
o upon receipt of a check drawn against an account where there are
insufficient funds to pay it in full
o induce drawer to make good his account
o and failing this, it protests the check on the following morning and
notifies bank
o it cannot therefore be held liable to the payee and holder of the
check for not protesting it upon the day when it was received
 Banks must ensure that the amount of check be paid only to its designated
payee
 Must discover irregularity – negligence
5. Responsibilities of Drawer
 Must personally keep track of his available balance in the bank
 Must not rely on the bank to notify him of the necessity to fund checks he
issued
 A check is supposed to be drawn against a previous deposit of funds, as it is
ordinarily intended for immediate payment
6. Duty of Banks to Know Signatures
 Bank is bound to know the signatures of its customers
 If it pays a forged check, it must be considered as making the payment out of
its own funds
 Cannot ordinarily charge the amount paid to the account of the depositor
whose name was forged
7. No Obligation to Make Partial Payment
 Bank has no obligation to make part payment on a check
 Upon partial payment, check holder could not be called upon to surrender
the check and the bank would be without a voucher affording a certain
means of showing the payment
 Rule is based on commercial convenience
 A check is intended not only to transfer a right but to serve as evidence for
the bank of the payment
8. No Duty to Make Up the Deficiency from Other Accounts
 Two accounts, one open account and one savings account and draws a check
upon the open account for more money that the account contains, the bank
may refuse to pay the check
 No duty to make up the deficiency
9. Legal Character of Checks Representing Demand Deposits
 Checks representing demand deposits do not have legal tender power
 Their acceptance in the payment of debts is at the option of the creditor
 A check cleared and credited to the account of the creditor shall be
equivalent to a delivery to the creditor of cash in an amount equal to the
amount credited to his account
10. Cross-Check
 Effects:
o Check may not be encashed but only deposited in the ban
o Check may be negotiated only once – to one who has an account
with the bank
o The act of crossing the check serves as a warning to the holder that
it has been issued for a definite purpose – so holder must inquire if
the check has been received pursuant to that purpose
11. Cashier’s Check
 CC is a bank’s own check, may be treated as a promissory note with bank as
maker
 Check = primary obligation of the bank which issues it and constitutes a
written promise to pay upon demand
 CC is deemed as cash
 Mere issuance of CC is considered acceptance thereof
12. Set-Off
a. A bank may debit the personal account of a depositor for an amount
erroneously credited to the depositor’s sole proprietorship account; SP has
no separate and distinct personality from the depositor
i. Bank has a right of set-off over the deposits for the payment of any
withdrawals on the part of a depositor
ii. Relationship between banks and depositors has been held to be that
of creditor and debtor so legal compensation may take place
b. Whether it acted judiciously – As business is affected with public interest,
and because of the nature of their functions, banks are under obligation to
treat the accounts with meticulous care – fiduciary nature
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 c. Duty of diligence on collecting bank to scrutinize checks deposited – 4. Deposit slips in booklet form, prenumbered, 3 copies, 3
genuineness and regularity colors
d. Crossing of check with “Payee’s Account Only” a. Original to be issued to depositor
i. Warning that check should be deposited only in the account of the b. 2nd for posting reference
payee c. 3rd to be retained in the booklet
ii. Duty of bank to ascertain that check be deposited in payee’s account 5. All collections must be turned over to the cashier at the
only end of each day with the Collection Summary Report with:
a. Date of report
13. Relationship of Payee or Holder and the Bank b. Names and addresses of the depositors
 Principal and agent relationship, in the absence of an agreement to the c. Deposit slip numbers
contrary d. Amounts of deposit
 A bank which receives such paper for collection is the agent of the e. Savings account and passbook numbers and
payee/holder f. Name and signature of solicitor rendering the
 Even if diversion of the amount of a check payable to the collecting bank in report
behalf of the designated payee may be allowed, diversion must be properly 6. Depositors must accomplish a Signature Card – used to
authorized by the payor check authenticity of signatures
o Can be justified only by proof of authority from the drawer or his 7. Deposits/Withdrawals shall be recorded by the
agent bookkeeper or any ledger clerk, in the depositor’s ledger
cards and passbooks
14. Encashment of Checks 8. At the end of each month, depositors shall be advised in
 One who first cashes and negotiates the check must take some precautions to writing of the balances of their deposits with the bank;
learn whether or not it is genuine must never be handcarried by the solicitors themselves
 If one cashing the check, through indifference, assists the forger in 9. Places of assignment s of bank solicitors shall be rotated at
committing the fraud, he should not be permitted to retain the proceeds of least quarterly.
the check
2. Individual and Joint Accounts
 Thus, one who encashed forged check is guilty of negligence which
contributed to the success of fraud  Deposit either I or JA
 JA – “and” or “and/or”
B. Savings Deposit o And – signature of both co-depositors are required for withdrawals
o And/or – either one may deposit and withdraw, without the
1. Servicing Deposits Outside Bank Premises knowledge, consent and signature
 Banks may be authorized by the BSP to solicit and accept deposits outside
their bank premises, subject to the following conditions: 3. Withdrawals
o Financial condition of the bank applying for authority to solicit is  Banks are prohibited from issuing/accepting withdrawal slips or any other
sound and the operations and quality of management could assure similar instruments designed to effect withdrawals without depositor’s
the safety of funds passbook and withdrawal slips
o Proposed area where it intends to solicit is clearly defined  Except for banks authorized by BSP to adopt the no passbook withdrawal
o Solicitation must be confined within a locality where there are no system
other banks in operation
o Minimum safeguards: C. Negotiable Order of Withdrawal (NOW) Accounts
1. All deposit solicitors2 shall be initially bonded for at least
P1, 000 subject to increase 1. Authority to accept NOW Accounts
2. DS shall provide identification cards with photo and  NOW accounts
signature; certified by officer of the bank; worn at all times o Interest bearing deposit accounts that combine
– upper breast o The payable on demand feature of checks and
3. Adequate insurance coverage for funds in transit shall be o Investment feature of savings account
secured by insurance companies  Universal/Commercial Bank may offer NOW accounts without prior
authority from MB
 Thrift/Rural/Cooperative Bank may accept NOW accounts upon prior
approval of MB
2 DS
3

2. Rules on Servicing NOW Accounts
 In opening of a NOW account, bank shall inform the depositor of its terms
and conditions
 Bank shall be responsible for proper identification of its depositors; shall
require 2 signatures and other information
 Deposits shall be covered by deposit slips in duplicate validated and initialed
by the teller; copy be given to depositor
 Accounts must be kept and maintained separately from the regular savings
deposits
 Blank now forms shall be prenumbered and controlled as in the case of
unissued blank checks
 Bank statement shall be sent to each depositor at the end of each month for
confirmation of balances
 Banks must use the form prescribed by rules on now accounts
D. Time Deposits
 Payment of which cannot legally be required within a specified number of
days
1. Term of Time Deposits
 Issued for a specific period of term
2. Special Time Deposits
 Authority shall be granted to any accredited banking institution, which may
participate in the supervised credit program to accept STD from Agrarian
Reform Fund Commission with interest lower than the rate allowed on time
deposits accepted from general public.
 Such deposits shall be exempt from legal reserve requirements, as an
exception to the existing policies on the matter.
3. Certificates of Time Deposit (CTD)
 Negotiable Certificates of Time Deposit (NCTDs)
o Universal/Commercial Banks may issue NCTDs without approval of
the BSP
o Thrift/Rural/Cooperative Banks may issue NCTDs upon prior
approval of BSP
 Non-Nego CTD
o Banks may issue long-term non-nego tax-exempt certificates of
time deposit without approval of BSP
E. Deposit Substitute Operations (Quasi-banking Functions)
 Essential elements of quasi-banking are:
o Borrowing funds for borrower’s own account
o 20 or more lenders at any one time
o Methods of borrowing are:
 Issuance, endorsement, or acceptance of debt instruments
of any kind, other than deposits
 Acceptances, promissory notes, participations, certificates
of assignments or similar instruments with recourse, trust
certificates, repurchase agreements
 Other instruments as MB may determine
o Purpose is (1) relending, or (2) purchasing receivables or other
obligations
 Borrowing – all forms of obtaining or raising funds
 Borrower’s own account – assumption of liability in one’s own capacity and
not in representation, or an agent/trustee
 Purchasing of receivables or other obligations
F. Foreign Currency Deposits
1. Authority to Deposit Foreign Currencies
 Any person, natural or juridical, may deposit with PH banks with good
standing
 Upon application by Central Bank,
 Foreign currencies acceptable as part of international reserve
 Except those required by Central Bank to be surrendered
2. Authority of Banks to accept Foreign Currency Deposits
Banks designated by the CB shall have the authority:
 To accept deposits and to accept foreign currencies in trust
o Numbered accounts for recording and servicing of said deposits are
allowed
 To issue certificates to evidence such deposits
 To discount said certificates
 To accept said deposits as collateral for loans subject to such rules and
regulations as may be promulgated by the CB from time to time
 To pay interest in foreign currency on such deposits
3. Foreign Currency Cover3 Requirements
Except as MB may prescribe or allow, depositary banks shall:
 Maintain 100% foreign currency cover for their liabilities
 Of which cover at least 15% shall be in the form of FCD with CB
 And the balance – in the form of foreign currency loans/securities – which
loan/securities shall be of short-term maturities and readily marketable
 Such foreign currency loans may include loans to domestic enterprises which
are – export-oriented or registered with BOI – subject to limitations
prescribed by MB on such loans
 FCC shall be I the same currency as that corresponding foreign currency
deposit liability
 CB may pay interest on the foreign currency deposit – and if requested –
shall exchange the foreign currency notes and coins into foreign currency
instruments drawn on its depositary banks.
3 FCC
4
  Depositary banks, on account of networth, resources, past performance, or
other pertinent criteria, have been qualified by MB to function under an
expanded foreign currency deposit system
 Shall be exempt from maintaining 15% of the cover in the form of foreign
currency deposit with CB
 Subject to prior CB approval, depositary banks may extend foreign currency
loans to any domestic enterprise, without the limitations prescribed
regarding maturity and marketability
 Such loans shall be eligible for purposes of 100% foreign currency cover
prescribed
4. Withdrawability and Transferability of Foreign Currency Deposits
 No restriction on withdrawal by depositor of his deposit or
 On the transferability of the same abroad
 Except those arising from the contract between the depositor and the bank
G. Anonymous and Numbered Accounts
 Anonymous or accounts under fictitious names should not be kept/allowed
 Where numbered accounts is allowed, banks/non-bank financial institutions
should ensure that client is identified in an official or other identifying
documents
 RPC
o Any person who shall publicly use a fictitious name for the purpose
of concealing a crime, evading the execution of a judgment or
causing damage (Art. 178)
 Civil Code
o Employment of pen names or stage names is permitted, provided it
is done in good faith and there is no injury to third persons. Pen
names and stage names cannot be usurped (Art. 379)
o No person shall use different names and surnames (Art. 380)
 RA 6085
o Sec 1
 Pseudonym is a normally accepted practice for literary,
cinema, television, or radio or other entertainment
purposes
 Must use name registered at birth in the office of the local
civil registry, or baptized with
 For aliens – registered with Bureau of Immigration or
substitute name authorized by the court
 1 year from approval of this act – register names with
residence
o Sec 2
 Alias – obtain judicial authority, only for one alias
 Petition for an alias – include baptismal and family name
and the name recorded in the civil registry, if different
 His immigrant’s name, if an alien
 His pseudonym if meron
o Sec 3
 Name he is baptized with, or the one registered in local
civil registry or BOI, or pseudonym
 Shall be used to represent himself in any public/private
document
 MUST State or affix his real/original name and all names
or aliases or pseudonym he is or may have been authorized
to use.
o Sec 4
 6 months from the approval of this act, all persons who
have used any name and an alias different from those
authorized in section 1 of this act and duly recorded in the
local civil registry shall be prohibited to use such other
name or alias.
II. Administration of Deposits
A. Specimen Signatures, ID Photos
1.
All banking institutions required to set a minimum 3 specimen signatures
from each depositor
2. To update such every 5 years or sooner, at the discretion of banks
3. At their option, to submit ID photos with specimen signatures
4. BSP Circular No. 564 Series of 2007 – list of valid identification cards)
a. p. 96
b. Student beneficiaries of OFW who are not yet of voting age shall be
required to present 2 IDs.
i. Remittance claims – School ID with photo and signature
of principal is acceptable as one of the two.
ii. Also birth certificate, library ID, membership ID signed by
organization in university
c. B and NB4 shall require
i. Two valid IDs on a one time basis only or at the
commencement of business relationship
ii. Updated photo, other relevant information
d. Financial transactions may include remittances
i. Anti-Money Laundering Act of 2001
1. Financial transaction
a. Any act establishing a right or obligation
or giving rise to any contractual or legal
relationship between parties
b. Movement of funds by any means with a
covered institution
B. Minors and Corporations As Depositors
1. Minors
a. Vested with special capacity and power to make savings or time
deposits, withdraw, receive interests without the assistance of their
parents or guardians provided:
i. At least 7 years of age
ii. Able to read and write
4 Banks and non bank financial institutions
5
 iii. Have sufficient discretion
iv. Not otherwise disqualified by any other incapacity
b. Parents ay deposit for their minor children and guardians for their
wards
2. Deposit in Thrift Banks
a. Minors may make deposits and withdraw them intheir own names
i. If any guardian shall give notice in writing to any thrift
bank not to make payments of deposits, dividends or
interest to the minor of whom he is a guardian, then
payment shall be made only to the guardian
3. Corporations
a. Incorporation stage – Cash - SEC shall require a Bank Certificate of
deposit of paid-up capital notarized in place where signed
b. Post Incorporation – Opening account – BOD issues a resolution
authorizing signatories and specifying depositary bank
C. Time Payment of Interest on Time Deposits/ Deposit Substitutes
1. Interest or yield on time deposit/deposit substitute may be paid at maturity
or upon withdrawal or in advance
2. Shall not exceed interest for 1 year
D. Treatment of Matured Time Deposits/Deposit Substitutes
1. Time deposit not withdrawn or renewed on its due date shall be treated as a
savings deposit and shall earn interest
2. Interest from date of actual withdrawal or renewal at a rate applicable to
savings deposits
3. A deposit substitute instrument not withdrawn or renewed on its maturity
date shall become payable on demand, earn interest, or yield from maturity
to actual withdrawal or renewal at a rate applicable to a deposit substitute
with 15 day maturity
4. Banks with quasi-banking functions shall continue to consider matures and
unwithdrawn deposit substitutes as such and subject to reserves.
E. Clearing Cut-off Time
1. GR: all deposits and withdrawals during regular banking hours shall be
credited/debited to deposit liability accounts on the date of receipt or
payment
2. 2 hours before clearing at BSP
3. Not earlier than 3 ½ hours before start of clearing for all its branches,
agencies, extension offices
4. No BSP clearing – 2 hours before start of local clearing
F. Booking of Cash Deposits
1. Cash deposits received after clearing cut-off time until the close of the
regular banking hours shall be booked as deposits in the day of the receipt.
G. Booking of Non-cash Deposit
 “On us” checks, manager’s/cashier/treasurer’s checks and demand drafts
drawn against depositary bank
 And treasury warrants and postal money orders
 After the clearing cut-off time until the close of the regular banking hours
 May be booked as deposits on the day of the receipt
 Other non-cash deposits shall be treated as contingent accounts on the day of
receipt and shall be booked as deposits the following banking day
H. Booking of Deposits after Regular Banking Hours
 Shall be treated as contingent accounts on the day of receipt and shall be
booked as deposits the following banking day
I. Average Daily Balance
 Service charges and/or maintenance fees on savings and demand deposit
accounts whether active or dormant that fall below required minimum
monthly average daily balance (ADB)
 Conditions
 Clearly stated in the terms and conditions of the deposit
 Rate/amount of charges is properly disclosed
 Deposit account balances are below the required minimum monthly
ADB for dormant accounts and for at least 2 consecutive months
 RMM ADB of deposits are properly disclosed among the terms and
conditions of the deposit
 Period of dormancy shall be properly disclosed; depositors shall be
informed by registered mail with return card on his last known
address at least 60 days prior to the imposition of dormancy fee.
 Change in terms and conditions for the imposition of service charges and/or
maintenance fees shall take effect only after due notice to the depositor
 Information by regular mail, statement of account messages, electronic mail,
courier delivery and/or alternative modes of communications on the
depositor’s last known address at least 60 days prior to implementation shall
be sufficient
 Failure to manifest or register his objection to the new service in writing
within 30 days shall be deemed to constitute acceptance of such changes.
 Banks shall post the information on their websites, ATMs, on-screen
messages; conspicuous places near bank at least 60 days prior to
implementation.
III. Survivorship Agreement
A. Definition
 Survivorship agreement
 When joint (and several) owners of a deposit, agree that either of
them could withdraw part or whole of said account during lifetime
of both
 And the balance, if any, upon death of either, belonged to the
survivor
 An Aleatory contract – mutual agreement of joint depositors
permitting either of them to withdraw whole deposit and transfer it
to the survivor
 Bank accounts may be created by joint owners
B. Survivorship Agreement not Invalid Per Se but may be Violative of Law
 Operation/effect may be violative
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  Mere cloak to hide an inofficious donation, to transfer property in fraud of
creditors, to defeat legitime,
 May be annulled
IV. Nature of Bank Deposits
A. Nature
 Fixed, savings, and current deposits of money in banks that are true deposits
are considered simple loans and not preferred credits
 Irregular deposits
 Loans because they earn interest
 Covered by law on loans
 Current and saving deposits are loans to a bank because it can use
the same
 Depositor is the creditor; bank is the debtor of depositor
 Failure of bank to honor time deposit is failure of obligation as a
debtor and not a breach of trust arising from a depositary’s failure
to return the subject matter of the deposit
 Relationship between depositor and the Savings and Loan Association is that
of creditor and debtor
 Ownership of the amount deposited was transmitted to the bank upon
perfection and can make use of the amount for its operations, pay interests
on deposits and pay withdrawals
 Bank has the obligation to return the amount deposited; Failure to return
will only give rise to civil liability and NOT misappropriation under RPC
 Bo obligation to return the same money deposited
 Contract governed by Civil Code Art. 1980
 Savings deposit agreement between bank and depositor is the contract which
determines the rights and obligations of the parties
 Bank acquires ownership of deposits but coupled with obligation to pay
depositor equal amount of demand
 Draw checks against current account or ask for release of funds in
savings account
 Creditor to expect checks to be honored by the bank as debtor
 Bank does not have a unilateral right to freeze the accounts of a
depositor based on mere suspicion that funds were proceeds of
scam the depositor was allegedly involved in.
B. Set-Off
 When a depositor is indebted to a bank
 Debts are mutual
 Between same parties
 Same right – the bank may apply the deposit to the payment of the
debt due
 Provided there is no express agreement to the contrary
 And the deposit is not specifically applicable to other particular
purpose
V. Duties of Banks
A. Meticulous Care
 Required to take meticulous care of the deposits of its clients
 Client – right to expect high standards of integrity and performance from it.
 Knowing the signatures of its clients
 Depositors not estopped from questioning wrongful withdrawals
even if they failed to question errors in statements sent by the bank
to them for verification
B. Payment to Proper Party
 Payment of money deposited with the bank that will extinguish its obligation
is payment to the person of
 The creditor
 To one authorized by him
 Or by law to receive it
 Payment to the wrong party does not extinguish the obligation
 As to the creditor who is without fault or negligence
 Even in good faith
 By mistake
 Error induced by fraud or third person
C. In Case of Death of Depositor
 NIRC
 If a bank has knowledge of the death of a person who maintained a
bank deposit account alone or jointly with another,
 It shall not allow any withdrawal from the said deposit account
 Unless, the Commissioner has certified that taxes imposed are paid
 Administrator of estate OR any 1 of the heirs, upon authorization by
the Commissioner, withdraw an amount NOT exceeding P20,000
 All withdrawal slips shall contain a statement that all of the joint
depositors are still living at the time of withdrawal by any one of the
joint depositors, under oath.
VI. Secrecy of Bank Deposits
A. Purposes (Secrecy of Bank Deposits Act)
 To give encouragement to the people to deposit money in banks
 To discourage private hoarding, so the same may be properly utilized by
banks in authorized loans to assist in the economic development of the
country
B. Privacy
 Civil Code
 Every person shall respect the dignity, personality, privacy and
peace of mind of his neighbors and other persons
 Meddling/prying into each other
 Violation of rights and liberties
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  Privacy of letters and private communications
 RPC
 Violation of secrets by an officer
 Revelation of trade and industrial secrets
 Trespass to dwelling
 Special Law
 Invasion of privacy
o Anti-Wiretapping, secrecy of BD, IPC
C. Absolute Confidentiality
 All deposits of whatever nature, including investments in bonds issued by
PH Government are all confidential, it may not be examined, inquired, or
looked into by any person, government official, bureau or office
 Unlawful for any official or employee of a banking institution to disclose to
any person any information concerning deposits
1. Prohibition against inquiry into or disclosure of deposits under RA
8367 (Non-Stock Savings and Loan Associations)
 All deposits of whatever nature with an Association are confidential, many
not be examined, inquired or looked into by any PGBO
 Except
o Upon written permission of the depositor in cases of impeachment
o Upon order of a court in cases of bribery or dereliction of duty of
public officials
o Where money deposited or invested is the subject matter of
litigation
 Unlawful for any official/employee to disclose to information concerning
deposits
2. Foreign Currency Deposits (FCD)
 Absolutely confidential nature
 Except upon written permission of the depositors
 Cannot be examined, inquired, or looked into by any PGBO whether judicial,
administrative or private
 FCD shall be exempt from attachment, garnishment, order of court,
legislative body, government agency, administrative body
3. Confidentiality of Deposits in Islamic Banks
 Banking transactions may not be examined, inquired or looked into by any
PGBO except:
o Inspection by bank’s auditor
o Upon written permission by the depositor
o In cases where the money deposited or the transaction concerned is
the subject of court order
 Unlawful for official/employee of Islamic Bank designated by BOD to
examine or audit the books of Bank to disclose or reveal any confidential
information
VII. Exceptions To Secrecy of Deposits
A. Exceptions under the Bank Secrecy Law:
a) Upon written permission of the depositor
b) Impeachment case
c) Order of the court – bribery or dereliction of duty of public officials
d) Money deposited or invested is subject matter of litigation
B. Garnishment
Rules of Court:
 Officer may levy in debts due the judgment obligor and other credits,
including bank deposits, financial interests, royalties, commissions and other
personal property not capable of manual delivery in the possession or control
of third parties.
 Levy
o Made by serving notice upon person owing such debts or having in
his possession or control such credits to cover such amount as will
satisfy judgment and other lawful fees
 Garnishee shall make a written report to the court within 5days from service
of notice of garnishment
o Stating whether or not judgment obligor has sufficient funds or
credit to satisfy amount of the judgment
o How much funds/credits the garnishee holds for the judgment
obligor
 Garnished amount in cash or check shall be delivered directly to the
judgment oblige within 10 working days from notice
 Lawful fees shall be paid directly to the court
 When there are 2 or more garnishees to satisfy the judgment, judgment
obligor shall have the right to indicate the garnishee who shall be required to
deliver the amount due
 Properties exempt from execution
a. Family home/homestead
b. Ordinary tools and implements personally used for his trade,
employment, or livelihood
c. 3 horses, 3 cows, or 3 carabaos or other beasts of burden
d. Clothing, ordinary personal use, except jewelry
e. Household furniture and utensils
f. Provisions for 4 months
g. Professional libraries and equipment of judges, lawyers, engineers,
teachers, etc not exceeding 300,000
h. 1 fishing boat and accessories not exceeding 100,000
i. Salaries, wages, or earningwithin 4 months preceding the levy
j. Lettered gravestones
k. Monies benefits, privileges, or annuities growing out of any life
insurance
l. Right to receive legal support , money or property obtained as such
support or any pension or gratuity from the government
m. Properties actually exempted by law
 Prohibition against examination/inquiry into a bank deposit does not
preclude its being garnished to insure satisfaction of a judgment
o No real inquiry
o Disclosure is incidental to the execution process
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C. Secrecy and Exemption from Attachment and Garnishment of Foreign
Currency Deposits Cannot be Used as Device for Wrongdoing
 Exemption from attachment, garnishment or order of court, legislative body,
government agency or administrative body is not applicable to a foreign
transient
o Otherwise, injustice would result to a citizen aggrieved by foreign
guest
D. Graft and Corruption
 RA 1405 provides that bank deposits are absolutely confidential – may not
be examined, inquired or looked into
 Except
o Anti Graft Law
o Cases of unexplained wealth
o Bribery
o Dereliction of duty
 Public office is a public trust – his life, so far relevant to his duty is open to
public scrutiny
 Inquiry to illegally acquired property extends to cases where such property is
concealed by being held by or recorded in the name of other persons
E. Authority to Inquire into Bank Deposits under the Anti-Money
Laundering Act
 AMLC may examine any particular deposit/investment with any banking
institution or non-bank financial institution upon order of the court
a. There is probable cause that deposits/investments are related to an
unlawful activity
b. A money laundering offenses
 No court order shall be required in the following:
a. Kidnapping for ransom
b. Comprehensive Dangerous Drugs Act
c. Hijacking and violations of RA 6235 – Civil Aviation
d. Destructive Arson, murder by terrorists against combatant persons
F. Periodic or Special Examination
 BSP may inquire into or examine any deposit or investment with any
banking institution or non-bank financial institution when the examination
is made in the course of a periodic or special examination
 Disclosure is allowed in examination in a special or general examination of a
bank authorized by the Monetary Board
o MB after being satisfied that there is reasonable ground to believe
that a bank fraud or serious irregularity has been/being committed
 Another exception – an independent auditor hired by the bank to conduct its
regular audit – cannot be found in statute books but common sense =
disclosure is a natural consequence of examination
G. In Camera Inspection by the Ombudsman
 Power of the Ombudsman
o Administer oath, issue subpoena, subpoena duces tecum, take
testimony in any investigation or inquiry including the power to
examine and have access to bank accounts and records
 An in camera inspection may be allowed but there must be a pending case
before the court of competent jurisdiction
o Bank personnel and account holder must be notified to be present
during inspection and must cover only account identified in the
pending case
 Investigation by OMB is not considered pending litigation and would not
warrant the opening of the bank account for inspection
H. Preliminary Attachment
 Any person owing debts to the party whose property is attached or having in
his possession or control any credit or other personal property belonging to
such party, may be required to attend before the court where the action is
pending or before a commissioner
 May be required to attend to give information respecting the property, be
examined on oath
 May order personal property capable of manual delivery to deliver to the
clerk of court or sheriff
I. Disclosure of Dormant Accounts
 All banks shall forward to the Insular Treasurer a statement under oath of
their respective managing officers
o All credits and deposits held by them in favor of persons known to
be dead
o Or who have not made further deposits or withdrawals during the
preceding years
o Arranged in alphabetical order
o According to the names of depositors
 Names and last known place of residence or post-office
addresses of the persons in whose favor such credit or
deposits stand
 Amount and date of the outstanding credit or deposit;
whether money or security
 Date when person in whose favor the credit stand died or
date when he made his last deposit/withdrawal
 Interest due on credit/deposit
 IS shall publish once a week for 3 consecutive weeks in at least 2 newspapers
of general circulation in the locality where the bank is situated
 IS’s duty to inform Atty-General of the existence of unclaimed balances
J. Authority of the Commissioner of Internal Revenue to Inquire into
Deposits
 Section 6 NIRC
 Commissioner is authorized to inquire into the bank deposits of:
a. Decedent to determine gross estate
b. Any taxpayer who filed an application for compromise of his tax
liability by reason of financial incapacity to pay his tax liability
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  In case taxpayer files an application to compromise the payment of his tax
liabilities on his claim that his financial position demonstrates a clear
inability to pay the tax assessed, application shall not be considered
 Unless and until he waives in writing his privilege under RA 1405 or under
other general or special laws

K. Waiver by DOSRI
 NCBA
 Any director, officer or stockholder who, together with his related interest,
contracts a loan or any form of financial accommodation from:
o His bank or
o From a bank:
 Which is a subsidiary of a bank holding company of which
both his bank and the lending bank are subsidiaries or
 In which a controlling proportion of the shares is owned by
the same interest that owns a controlling proportion of the
shares of his bank,
 In excess of 5% of the capital and surplus of the bank, or
maximum amount permitted by law, whichever is lower,
 Shall be required by the lending bank to waive the secrecy
of his deposits of whatever nature in all banks in the
Philippines
 Any information obtained from the examination of the
deposit shall be confidential and may be used by
examiners only in connection with their supervisory and
examination responsibility or by the BS in a legal action it
has initiated involving the deposit account.

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