UNIVERSITY OF NUEVA CACERES

COLLEGE OF BUSINESS AND ACCOUNTANCY

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

LAW ON SECRECY OF BANK DEPOSITS

REPUBLIC ACT NO.1405, AS AMENDED
AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO, DEPOSITS WITH
ANY BANKING INSTITUTION AND PROVIDING PENALTY THEREFOR

CONFIDENTIALITY OF BANK DEPOSITS AND INVESTMENT IN GOVERNMENT

BONDS
All deposits of whatever nature with banks or banking institutions in the Philippines including
investments in bonds issued by the Government of the Philippines, its political subdivisions and
its instrumentalities, are hereby considered as of an absolutely confidential nature and may
not be examined, inquired or looked into by any person, government official, bureau or office,
except:
 when the examination is made in the course of a special or general examination of a bank
and is specifically authorized by the Monetary Board after being satisfied that there is
reasonable ground to believe that a bank fraud or serious irregularity has been or is being
committed and that it is necessary to look into the deposit to establish such fraud or
irregularity,
 or when the examination is made by an independent auditor hired by the bank to conduct
its regular audit provided that the examination is for audit purposes only and the results
thereof shall be for the exclusive use of the bank,
 or upon written permission of the depositor,
 or in cases of impeachment,
 or upon order of a competent court in cases of bribery or dereliction of duty of public
officials,
 or in cases where the money deposited or invested is the subject matter of the litigation.

PERSONS LIABLE
It shall be unlawful for any official or employee of a bank to disclose to any person other than
those mentioned in the EXCEPTIONS, or for an independent auditor hired by a bank to conduct
its regular audit to disclose to any person other than a bank director, official or employee
authorized by the bank, any information concerning said deposits.

PENALTIES
Any violation of this law will subject the offender upon conviction, to an imprisonment of not
more than five years or a fine of not more than twenty thousand pesos or both, in the
discretion of the court.

FOREIGN CURRENCY DEPOSIT ACT OF THE PHILIPPINES

REPUBLIC ACT NO. 6426
Foreign Currency Deposits may be examined, inquired or looked into when there is written
permission of the depositor (only one exception under RA 6426).

UNCLAIMED BALANCES LAW

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PRESIDENTIAL DECREE No. 679 April 2, 1975
Definition of Terms
1. Unclaimed balances- shall include credits or deposits of money, bullion, security or other
evidence of indebtedness of any kind, and interest thereon with banks, buildings and loan
associations, and trust corporations in favor of any person known to be dead or who has not
made further deposits or withdrawals during the preceding ten years or more.
Such unclaimed balances, together with the increase and proceeds thereof, shall be deposited
with the Treasurer of the Philippines to the credit of the Government of the Republic of the
Philippines.
2. “Applicant” pertains to the depositor or his successor-in-interest who requests for the
reactivation of the account which was reported by his depository bank to the Treasurer of the
Philippines pursuant to the Unclaimed Balances Law.

3. “Procedure” refers to the course of action to be complied with by the applicant in order that
his request be given due course.

4. “Covered Institution” refers to all banks, trust companies, savings and mortgage banks, mutual
building and loan associations, all banking institutions of every kind, covered under Act No.
3936, as amended by P.D. 679, which reported to the Treasurer of the Philippines as unclaimed
the account being applied for reactivation.

5. “Affidavit of Undertaking” is a sworn statement executed by the responsible authorized officer

of the bank absolving the Bureau of the Treasury from any liability that may arise due to the
granting of the Applicant’s request for reactivation.

PROCEDURE FOR REACTIVATION OF UNCLAIMED BALANCES

The following procedure shall be strictly followed in the application for reactivation of
unclaimed balances reported to the Treasurer of the Philippines:

1. Letter Request of Depositor/Creditor. The depositor/creditor shall write his depository bank
requesting for the reactivation of his account which was included in the report of unclaimed
balances to the Bureau of the Treasury.

2. Authentication. The covered institution shall authenticate and verify the request for
reactivation and the signature of the depositor/creditor.

3. Letter Request of the Covered Institution. The depository bank shall write the Bureau of the
Treasury through the authorized approving official, requesting authority to reactivate the deposit
account concerned attaching to its letter the stamped verified letter of the depositor/creditor.

4. Deed of Undertaking. The covered institution, through its responsible authorized officer, shall
execute a Deed of Undertaking ensuring that the Bureau of the Treasury and its officials and
employees shall be free and harmless from any liability once the account is reactivated.

5. Letter of Authority to Reactivate. Finding complete documentation supporting the request, the
Bureau of the Treasury, through the authorized officer shall issue the authority to the covered
institution to reactivate the account.

6. Entity Requirements. In case the requesting party/deposit/creditor is a juridical entity/person,

the request must be accompanied with corresponding board resolutions and /or Secretary’s

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Certificatate showing that the signatory to the request for reactivation is fully authorized to
transact with the Bureau of the Treasury relative to the reactivation of its account.

APPROVING AUTHORITY

The authority to reactivate on unclaimed balance account/s shall be issued by the following
officers:

a. Division Chief/Head Law & Litigation Division Legal Service- aggregate amount of
unclaimed balance not exceeding P100,000.00
b. Director, Legal Service- aggregate amount of unclaimed balance exceeding
P100,000.00 but not exceeding P500,000.00
c. Deputy Treasurer of the – Philippines- aggregate amount exceeding P500,000.00 but
not exceeding P1,000,000.00
d. Treasurer of the Philippines- aggregate amount of unclaimed balances exceeding
P1,000,000.00

ESCHEAT PROCEEDINGS FOR UNCLAIMED BALANCES

RULE 91 of Rules of Court
Escheats
Section 1.When an by whom petition filed. — When a person dies intestate, seized of real
property in the Philippines, leaving no heir or person by law entitled to the same, the Solicitor
General or his representative in behalf of the Republic of the Philippines, may file a petition in
the Court of First Instance of the province where the deceased last resided or in which he had
estate, if he resided out of the Philippines, setting forth the facts, and praying that the estate of
the deceased be declared escheated.

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