knowledge bank for

**
1. When to file claims:
* 2. Who are required to file:
1. Submit report to MB for corrective
3. Who are not required to
action file
2. MB 45 days corrective action 4. Theft in filing claim
3. After lapse of 45 days, cease and desist 5. Who should sign the
order to correct within 45 days or 15 days PDIC Law
claim form
if insolvency 6. Steps in claiming
4. Impose fine proceeds Insurable Sanctions on Unsafe and
5. Inform MB of action Deposits Unsound Banking Practices*

6. Terminate insured status of bank w/n

30 days from notice Requirements
Covered Uncovered
for filing **

proceeds from Original

Generally all investment fraudulent proceeds Special Power
unlawful Evidence Of for below 18
deposits not products deposits from unsafe One (1) Valid of Attorney
activities Deposits
exceeding the and unsound Original (SPA) for
500,000 limit banking Photo-bearing claimants
practices Identification who are not
certified copy Document the
PSA birth valid ID of the issued by the (Id) signatories in
certificate parent local civil the bank
by deposit by deposit registrar records
by currency
type account

foreign
savings demand/chec certificate of Philippine
special savings NOW currency single joint account by in trust for Foreign
deposit king account time deposits Peso
deposits

Figure 1. Concept Map of the PDIC Law

RA 3591: An Act Establishing the Philippine Deposit Insurance Corporation, Defining
its Powers and Duties, and For Other Purposes, as amended by RA 10846: AN ACT
ENHANCING THE RESOLUTION AND LIQUIDATION FRAMEWORK FOR BANKS,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 3591, AS AMENDED, AND OTHER
RELATED LAWS
I. THE CREATION OF THE PHILIPPINE DEPOSIT INSURANCE CORPORATION

A. Insure the deposits of all banks

B. promote and safeguard the interests of the depositing public by way of providing
permanent and continuing insurance coverage on all insured deposits

II. STATE POLICY

A. strengthen the mandatory deposit insurance coverage system to generate,

preserve, maintain faith and confidence in the country’s banking system, and
protect it from illegal schemes and machinations
B. government must extend all means and mechanisms necessary for the
Corporation to effectively fulfill its vital task of promoting and safeguarding the
interests of the depositing public by way of providing insurance coverage on bank
deposits and in helping develop a sound and stable banking system.
C. PDIC shall enjoy fiscal and administrative autonomy

III. BOARD OF DIRECTORS: COMPOSITION AND AUTHORITY

A. The powers and functions of the Corporation shall be vested in and exercised by
a Board of Directors which shall be composed of seven (7) members

 Secretary of Finance
i. Chairman of the Board without compensation
ii. may designate an alternate (attend meeting and vote)- official with
a rank not lower than assistant secretary or its equivalent with
written authority from the Secretary of Finance

 Governor of the Bangko Sentral ng Pilipinas

i. Member of the Board without compensation
ii. may designate an alternate (attend meeting and vote)- official with
a rank not lower than assistant secretary or its equivalent with
written authority from the Governor of the Bangko Sentral ng
Pilipinas
  President of the PDIC
i. appointed by the President of the Philippines from a shortlist
prepared by the Governance Commission for Government-Owned
or -Controlled Corporations
ii. full-time basis for a term of six (6) years.
iii. shall also serve as Vice Chairman of the Board

 Four (4) members from the private sector

i. appointed by the President of the Philippines from a shortlist
prepared by the Governance Commission for Government-Owned
or -Controlled Corporations
ii. term of six (6) years unless sooner removed for cause and shall be
subject to only one (1) reappointment
iii. those first appointed, the first two (2) appointees shall serve for a
period of three (3) years
iv. appointive director shall continue to hold office until the successor
is appointed
v. appointive director may be nominated by the Governance
Commission for Government-Owned or -Controlled Corporations
for reappointment by the President only if one obtains a
performance score of above average or its equivalent or higher in
the immediately preceding year of tenure as appointive director
based on the performance criteria for appointive directors of the
Corporation.
vi. Appointment to any vacancy shall be only for the unexpired term of
the predecessor

B. BOARD MEMBER QUALIFICATIONS (ALL MUST BE MET)

i. Good moral character
ii. Unquestionable integrity and responsibility
iii. Known probity and patriotism
iv. Recognized competence in economics, banking and finance, law,
management administration or insurance
v. at least thirty-five (35) years of age.
 For the duration of their tenure or term of office and for a
period of one (1) year thereafter, the appointive members of
the Board shall be disqualified from holding any office,
position or employment in any insured bank.
C. Chairmanship (if absent in a meeting or vacant)
 Secretary of Finance
 President of PDIC
 Other board members shall choose among themselves

D. Valid Reasons for Removal by the President of the Philippines (any)

 If the member is physically or mentally incapacitated that he or she
cannot properly discharge his or her duties and responsibilities, and such
incapacity has lasted for more than six (6) months
 If the member is guilty of acts or operations which are of fraudulent or
illegal character or which are manifestly opposed to the aims and
interests of the PDIC
 If the member no longer possesses the qualifications specified in this Act
 If the member does not meet the standards for performance based on the
evaluation by the Governance Commission for Government-Owned or -
Controlled Corporations

E. The presence of four (4) members shall constitute a quorum.

F. All decisions of the Board of Directors shall require the concurrence of at least
four (4) members.

G. Any member of the Board of Directors with personal or pecuniary interest in any
matter in the agenda of the Board of Directors shall disclose his or her interest to
the Board and shall recuse from the meeting when the matter is taken up. The
minutes shall reflect the disclosure made and the recusal of the member
concerned

H. AUTHORITY OF THE BOD

 To approve and issue rules and regulations for banks and the depositing
public as it considers necessary for the effective discharge of its
responsibilities;

 To act as the policy-making body of the Corporation and constitute Board

committees to oversee the management, operations and administration
of the Corporation
 To establish a human resource management system which shall govern
the selection, hiring, appointment, transfer, promotion, or dismissal of
 personnel. Such system shall aim to establish professionalism and
excellence at all levels of the Corporation in accordance with sound
principles of management;

 To approve a compensation structure as an integral component of the

Corporation’s human resource development program based on job
evaluation studies and wage surveys, and revise the same as it may deem
necessary.

i. All positions in the Corporation shall be governed by a

compensation package, position classification system and
qualification standards approved by the Board based on a
comprehensive job analysis and audit of actual duties and
responsibilities.
ii. The compensation structure shall be comparable to that of other
financial institutions based on prevailing market standards, and
shall provide for yearly merit reviews or increases based on
productivity.
iii. The Corporation shall therefore be exempt from existing laws, rules
and regulations on compensation package, position classification
and qualification standards. It shall however endeavor to make its
system conform as closely as possible with the principles under
Republic Act No. 6758, as amended

 To appoint, establish the rank, fix the remuneration, benefits, including

health care services through a Health Maintenance Organization (HMO)
and medical benefits other than those provided for under Republic Act
No. 7875, as amended, and remove any officer or employee of the
Corporation, for cause, subject to pertinent civil service laws
i. Board of Directors may delegate this authority to the President
subject to specific guidelines: Provided, further, That in no case
shall there be any diminution of existing salaries, benefits and other
emoluments

 To approve policy on local and foreign travel, and the corresponding

expenses, allowances and per diems, of officers, employees, agents of the
Corporation, which shall be comparable with the expenses, allowances
and per diems of personnel of other financial institutions based on
prevailing market standards, notwithstanding the provisions of
 Presidential Decree No. 1177, Executive Order No. 292, Executive Order
No. 248, as amended, Executive Order No. 298, and similar laws

 To adopt an annual budget for, and authorize such expenditures by the

Corporation, as are in the interest of the effective administration and
operation of the Corporation;

 To approve the target level of the Deposit Insurance Fund (DIF) and the
methodology for determining reserves for insurance and financial
assistance losses;

 To review the organizational set-up of the Corporation and adopt a new

or revised organizational structure as it may deem necessary for the
Corporation to undertake its mandate and functions;

 To design, adopt and revise, as it may deem necessary, an early

separation plan for employees of the Corporation to ensure availability
of a human resource pool qualified and capable of implementing the
Corporation’s authorities under this Charter in a manner responsive and
attuned to market developments, and to provide incentives for all those
who shall be separated from the service. Notwithstanding any law to the
contrary, these incentives shall be in addition to all gratuities and
benefits the employee is entitled to under existing laws

 To promote and sponsor the local or foreign training or study of

personnel in the fields of banking, finance, management, information
technology and law. Towards this end, the Corporation is hereby
authorized to defray the costs of such training or study. The Board shall
prescribe rules and regulations to govern the training or study programs
of the Corporation.

IV. PRESIDENT OF THE CORPORATION, COMPENSATION, POWERS AND DUTIES

A. The President of the PDIC

 Chief Executive Officer

 Vice Chairman of its Board of Directors
  Salary shall be fixed by the President of the Philippines upon the
recommendation of the Governance Commission for Government-
Owned or -Controlled Corporations, at a sum commensurate to the
importance and responsibility attached to the position.
 The sum total of the salary, allowances, benefits and other emoluments
of the President of the Corporation shall be higher than the compensation
package of the next highest ranking executive of the Corporation.

 Powers and Duties of PDIC President

A. To prepare the agenda for the meeting of the Board and to submit for the
consideration of the Board the policies and measures which he believes
to be necessary to carry out the purposes and provisions of this Act
B. To execute and administer the policies and measures approved by the
Board
C. To direct and supervise the operations and internal administration of the
Corporation in accordance with the policies established by the Board.
The President may delegate certain of his administrative responsibilities
to other officers of the Corporation, subject to the rules and regulations
of the Board.
D. To represent the Corporation in all dealings with other offices, agencies
and instrumentalities of the government and with all other persons or
entities, public or private, whether domestic, foreign or international
E. To authorize, with his signature, upon prior authority of the Board,
contracts entered into by the Corporation, notes and securities issued by
the Corporation, and the annual reports, balance sheets, profits and loss
statements, correspondence and other documents of the Corporation.
The signature of the President may be in facsimile wherever appropriate.
F. To represent the Corporation, either personally or through counsel,
including private counsel, as may be authorized by the PDIC Board, in any
legal proceeding or action
G. To delegate, with the prior approval of the Board of Directors, his power
to represent the Corporation, as provided in subsections (d) and (f) of
this Section, to other officers of the Corporation
H. To exercise such other powers as may be vested in him by the Board.
 The President shall be assisted by a Vice President and other
officials whose appointment and removal for cause shall be
approved and whose salary shall be fixed by the Board of Directors
upon recommendation of the President of the Corporation. During
the absence or temporary incapacity of the President, or in case of
 vacancy or permanent incapacity and pending appointment of a
new President of the Corporation by the President of the
Philippines, the Board of Directors shall designate the officer-in-
charge of the Corporation.

V. DEFINTION OF TERMS

A. Asset
 refers to movable, immovable, tangible, or intangible resources or
properties over which a bank has an established or equitable interest,
including the proceeds of the sale of its bank and branch licenses subject
to the approval of the Bangko Sentral ng Pilipinas

B. Asset distribution plan

 refers to the plan of distribution of the assets of a closed bank to its
creditors, based on its estimated realizable value as of a certain cut-off
date, prepared in accordance with the Rules on Concurrence and
Preference of Credits under the Civil Code or other laws
 Partial asset distribution plan – when it pertains to the distribution of a
portion or some of the assets of the closed bank
 Final Asset distribution plan – when it pertains to the distribution of all
the assets of the closed bank

C. Board of Directors
 means the Board of Directors of the Corporation.

D. Bank and banking institution

 synonymous and interchangeable and shall include banks, commercial
banks, savings banks, mortgage banks, rural banks, development banks,
cooperative banks, stock savings and loan associations and branches and
agencies in the Philippines of foreign banks and all other corporations
authorized to perform banking functions in the Philippines.

E. Burglary
 the breaking and entering of the premises of another with an intent to
commit a felony within. It is one of the specific crimes included in the
general category of theft
F. Closed bank
 refers to a bank placed under liquidation by the Monetary Board

G. Creditor
 refers to any individual or entity with a valid claim against the assets of
the closed bank.

H. Defalcation
 the taking or illegal use of money by someone who has responsibility for
it, such as a company or government official.

I. Deposit
 means the unpaid balance of money or its equivalent received by a bank
in the usual course of business and for which it has given or is obliged to
give credit to a commercial, checking, savings, time or thrift account,
evidenced by a passbook, certificate of deposit, or other evidence of
deposit issued in accordance with Bangko Sentral ng Pilipinas rules and
regulations and other applicable laws, together with such other
obligations of a bank, which, consistent with banking usage and
practices, the Board of Directors shall determine and prescribe by
regulations to be deposit liabilities of the bank
 Any obligation of a bank which is payable at the office of the bank located
outside of the Philippines shall not be a deposit for any of the purposes
of this Act or included as part of the total deposits or of insured deposit
 Subject to the approval of the Board of Directors, any insured bank which
is incorporated under the laws of the Philippines which maintains a
branch outside the Philippines may elect to include for insurance its
deposit obligations payable only at such branch.

The Corporation shall not pay deposit insurance for the following accounts or
transactions:
i. Investment products such as bonds and securities, trust accounts,
and other similar instruments
ii. Deposit accounts or transactions which are fictitious or fraudulent
as determined by the Corporation
iii. Deposit accounts or transactions constituting, and/or emanating
from, unsafe and unsound banking practice/s, as determined by the
Corporation, in consultation with the Bangko Sentral ng Pilipinas,
after due notice and hearing, and publication of a directive to cease
 and desist issued by the Corporation against such deposit accounts,
transactions or practices
iv. Deposits that are determined to be the proceeds of an unlawful
activity as defined under Republic Act No. 9160, as amended.

*The actions of the Corporation taken under Section 5(g) shall be final and executory, and
may only be restrained or set aside by the Court of Appeals, upon appropriate petition for
certiorari on the ground that the action was taken in excess of jurisdiction or with such grave
abuse of discretion as to amount to a lack or excess of jurisdiction. The petition for certiorari
may only be filed within thirty (30) days from notice of denial of claim for deposit insurance.
J. Disputed claim
 refers to a claim or suit against the assets of a closed bank, or for specific
performance, or breach of contract, or damages, of whatever nature or
character, whether for money or otherwise, liquidated or unliquidated,
fixed or contingent, matured or current, denied by the receiver

K. Insured bank
 means any bank the deposits of which are insured in accordance with the
provisions of this Act.

L. Insured deposit
 means the amount due to any bonafide depositor for legitimate deposits
in an insured bank as of the date of closure but not to exceed Five
hundred thousand pesos (P500,000.00).
 Such amount shall be determined according to such regulations as the
Board of Directors may prescribe.
 In determining such amount due to any depositor, there shall be added
together all deposits in the bank maintained in the same right and
capacity for his or her benefit either in his or her own name or in the
name of others.
 A joint account regardless of whether the conjunction ‘and’, ‘or’, ‘and/or’
is used, shall be insured separately from any individually-owned deposit
account

i. Provided:
 if the account is held jointly by two or more natural persons,
or by two or more juridical persons or entities, the maximum
insured deposit shall be divided into as many equal shares
as there are individuals, juridical persons or entities, unless
a different sharing is stipulated in the document of deposit
  if the account is held by a juridical person or entity jointly
with one or more natural persons, the maximum insured
deposit shall be presumed to belong entirely to such
juridical person or entity
 the aggregate of the interest 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
Five hundred thousand pesos (P500,000.00)
 the provisions of any law to the contrary notwithstanding,
no owner/holder of any passbook, certificate of deposit, or
other evidence of deposit shall be recognized as a depositor
entitled to the rights provided in this Act unless the
passbook, certificate of deposit, or other evidence of deposit
is determined by the Corporation to be an authentic
document or record of the issuing bank
 in case of a condition that threatens the monetary and
financial stability of the banking system that may have
systemic consequences, as defined in Section 22 hereof, as
determined by the Monetary Board, the maximum deposit
insurance cover may be adjusted in such amount, for such a
period, and/or for such deposit products, as may be
determined by a unanimous vote of the Board of Directors in
a meeting called for the purpose and chaired by the
Secretary of Finance, subject to the approval of the President
of the Philippines.

M. Liquidation
 refers to the proceedings under Sections 12 to 16 of this Act

N. Liquidation court
 refers to the Regional Trial Court (RTC) of general jurisdiction where the
petition for assistance in the liquidation of a closed bank is filed and given
due course.

O. Payout
 refers to the payment of insured deposits

P. Petition for assistance in the liquidation of a closed bank

  refers to the petition filed by the receiver with the RTC in accordance
with Section 16 of this Act

Q. Purchase of assets and assumption of liabilities

 refers to a transaction where an insured bank purchases any or all assets
and assumes any or all liabilities of another bank under resolution or
liquidation, as provided in this Act

R. Receiver
 refers to the Corporation or any of its duly authorized agents acting as
receiver of a closed bank

S. Records
 include all documents, titles, papers and electronic data of the closed
bank, including those pertaining to deposit accounts of and with the
closed bank, its assets, transactions and corporate affairs

T. Residual assets
 refer to assets, in cash or in kind, to be turned over to the closed bank’s
stockholders of record, in proportion to their interest in the closed bank
as of date of closure, after payment in full of liquidation costs, fees and
expenses, and the valid claims and surplus dividends to all the creditors

U. Resolution
 refers to the actions undertaken by the Corporation under Section 11 of
this Act to:
i. Protect depositors, creditors and the DIF
ii. Safeguard the continuity of essential banking services or maintain
financial stability
iii. Prevent deterioration or dissipation of bank assets.

V. Risk-based assessment system

 pertains to a method for calculating an insured bank’s assessment on the
probability that the DIF will incur a loss with respect to the bank, and the
likely amount of any such loss, based on its risk rating that takes into
consideration the following:
i. Quality and concentration of assets
ii. Categories and concentration of liabilities, both insured and
uninsured, contingent and noncontingent
 iii. Capital position
iv. Liquidity position
v. Management and governance
vi. Other factors relevant to assessing such probability, as may be
determined by the Corporation:

W. Splitting of deposit
 occurs whenever a deposit account with an outstanding balance of more
than the statutory maximum amount of insured deposit maintained
under the name of natural or juridical persons is broken down and
transferred into two (2) or more accounts in the name/s of natural or
juridical persons or entities who have no beneficial ownership on
transferred deposits in their names within one hundred twenty (120)
days immediately preceding a closure order issued by the Monetary
Board of the Bangko Sentral ng Pilipinas for the purpose of availing of the
maximum deposit insurance coverage.

X. Statement of affairs
 refers to a report of financial condition of the closed bank at a given date,
showing the:
i. estimated realizable value of assets
ii. classification of credits
iii. estimated liabilities to be settled

Y. Subrogation
 is a term describing a right held by most insurance carriers to legally
pursue a third party that caused an insurance loss to the insured. This is
done in order to recover the amount of the claim paid by the insurance
carrier to the insured for the loss.

Z. Surplus dividends
 refers to the remaining assets of the closed bank after satisfaction in full
of all the liquidation costs, fees and expenses, and valid claims.
 The surplus dividends shall be computed at the legal rate of interest from
the date of takeover to cut-off date of the distribution plan, and shall be
paid, in cash or in kind, to creditors of the closed bank in accordance with
the Rules on Concurrence and Preference of Credits under the Civil Code
or other laws.
 AA. Systemic risk
 refers to the possibility that failure of one bank to settle net transactions
with other banks will trigger a chain reaction, depriving other banks of
funds leading to a general shutdown of normal clearing and settlement
activity.

BB. Takeover
 refers to the act of physically taking possession and control of the
premises, assets and affairs of a closed bank for the purpose of
liquidating the bank.

CC. Transfer deposit

 deposit in an insured bank made available to a depositor by the
Corporation as payment of insured deposit of such depositor in a closed
bank and assumed by another insured bank

DD. Trust funds

 means funds held by an insured bank in a fiduciary capacity and includes
without being limited to, funds held as trustee, executor, administrator,
guardian or agent

EE. Valid claim

 refers to the claim recognized by the receiver or allowed by the
liquidation court

FF. Winding up period

 refers to the period provided in Section 16 of this Act

VI. DEPOSIT INSURANCE COVERAGE

A. The deposit liabilities of any bank which is engaged in the business of receiving
deposits as herein defined on the effective date of this Act, or which thereafter
may engage in the business of receiving deposits, shall be insured with the
Corporation.

B. Whenever a bank is determined by the Bangko Sentral ng Pilipinas to be capital

deficient, the Corporation may conduct an insurance risk evaluation on the bank
to enable it to assess the risks to the DIF. Such evaluation may include the
determination of:
  the fair market value of the assets and liabilities of a bank
 the risk classification of a bank
 possible resolution modes under Section 11 of this Act, subject to such
terms and conditions as the PDIC Board may prescribe

SCOPE OF DEPOSIT INSURANCE PROTECTION – covers only the risk of bank closure
ordered by the Monetary Board. Thus bank losses due to theft, fire closure by reason of strike
or existence of public disorder, revolution, or civil war, are not covered by PDIC.

COVERAGE OF PDIC INSURANCE

1. By Deposit Type
a. Savings deposit
b. Special savings
c. Demand/checking account
d. Negotiable Order of Withdrawal (NOW)
e. Certificate of Time Deposits
f. Foreign currency deposit

2. By Deposit Account
a. Single accounts – are individually-owned accounts or accounts held under one
name, either as natural person (single proprietorship or individual) or juridical
entity (corporation, partnership, or cooperative)

b. Joint Accounts – are accounts held under more than one name.
a. A joint account regardless of whether the conjunction “and”, “or” or
“and/or” is used shall be insured separately from single accounts.
b. Unless a different sharing is stipulated in the deposit documents, the
insured amount up to the Maximum Deposit Insurance Coverage of Php
500,000 shall be divided equally between or among co-owners of a joint
account.
c. The total shares of a co-owner in several joint accounts may exceed Php
500,000 but will only be insured up to the Maximum Deposit Insurance
Coverage of Php 500,000.
d. Joint accounts held in the names of a juridical entity and a natural person
shall be presumed to belong solely to the juridical entity.
 c. Account “By”, “In Trust For” (ITF), or “For the Account of” (FAO) another
person
a. Ivan by Suga. Ivan is the depositor.
b. Ivan in trust for Suga. Suga is the depositor.
c. Ivan for the account of Suga. Suga is the depositor.

 GENERAL RULE: Maximum deposit insurance coverage is Php 500,000.

 EXCEPTION: In case of a depositor with single account AND joint account, the
aggregate can be insured up to Php 1,000,000.

OUTSIDE THE COVERAGE OF PDIC INSURANCE

The following, whether documented, documented, recorded, or booked as deposited by the
bank, are excluded from the PDIC deposit insurance:
A. Investment products such as bonds and securities, trust accounts and other
similar instrument
B. Deposit accounts or transactions that:
a. Are unfunded, fictitious, or fraudulent
b. Constitute and/or emanate from unsafe and unsound banking practices as
determined by the PDIC, in consultation with the BSP, after due notice and
hearing and publication of PDIC’s cease and desist order against such
deposit accounts/transactions
i. Deposit-related practice/activity/transaction without the approval
or adequate controls required under existing laws, rules, and
regulations
ii. Failure to keep bank records within bank premises
iii. Granting high interest rates, when bank has: (i) negative
unimpaired capital, or (ii) liquid assets to deposit ratio less than
10%
iv. Non-compliance with PDIC regulations
c. Are determined to be proceeds of an unlawful entity as defined in the Anti-
Money Laundering Act (Republic Act 0160, as Amended)
C. Bank deposits in foreign banks operating outside the Philippine territory or bank
deposits in foreign branch of domestic bank operating outside the Philippine
territory
 WHAT ARE THE REQUIREMENTS IN FILING CLAIMS?

1. ORIGINAL EVIDENCE OF DEPOSITS such as savings passbook, certificate of time

deposit, bank statement, used or unused checks, or ATM card.
2. ONE (1) VALID ORIGINAL PHOTO-BEARING IDENTIFICATION DOCUMENT (ID) with
clear signature of depositor/claimant (e.g. Driver's License, SSS/GSIS ID, Senior
Citizen's ID, Passport, PRC ID, OWWA/OFW ID, Seaman's ID, Alien Certificate of
Registration ID, Voter's ID). (IT IS RECOMMENDED TO BRING AT LEAST TWO (2)
VALID IDs IN CASE OF DISCREPANCIES IN SIGNATURE).
3. For depositors below eighteen (18) years old, photocopy of birth certificate from the
Philippine Statistics Authority (PSA) or a duly certified copy issued by the local civil
registrar, and valid ID of the parent.
4. Original copy of a notarized Special Power of Attorney (SPA) for claimants who are
not the signatories in the bank records. In the case of minor depositor, the SPA must
be executed by the parent. (please click to download the sample Form of SPA).
5. Claim Form:
a. When filing claim during the onsite CSO period, or during personal filing at the
PDIC PAC, a system generated Claim Form shall be printed by PDIC
representative after interview/processing.
b. When filing through mail, please download the PDIC Claim Form. (please click
to download the Claim Form,) The claim form needs to be accomplished,
signed, and notarized. Depositors must ensure that the signature on the Claim
Form is similar with the signature in the bank records and the valid IDs
submitted.

VII. ASSESSMENT OF MEMBER BANKS

A. Assessment rate shall be one-fifth of one percent per annum or as determined

by BOD, whichever is lower
 Semi-annual assessment is one-half (1/2) the assessment rate multiplied
by the assessment base, and 5,000 pesos, whichever is higher
 The assessment base shall be the amount of the liability of the bank for
deposits as defined under subsection (g) of Section 5 without any
deduction for indebtedness of depositors.
 The Board of Directors may establish a risk-based assessment system
and impose a risk-based assessment rate which shall not exceed two-fifth
(2/5) of one per centum (1%) per annum multiplied by the assessment
base.
  The semi-annual assessment base for one semi-annual period shall be
the average of the assessment base of the bank as of the close of business
on March thirty-one and June thirty and the semi-annual assessment
base for the other semi-annual period shall be the average of the
assessment base of the bank as of the close of business on September
thirty and December thirty-one
i. When any of said days is a nonbusiness day or legal holiday, either
national or provincial, the preceding business day shall be used
ii. The certified statements required to be filed with the Corporation
under subsections (b) and (c) of this section shall be in such form
and set forth such supporting information as the Board of Directors
shall prescribe.
iii. The assessment payments required from the insured banks under
subsections (b) and (c) of this section shall be made in such manner
and at such time or times as the Board of Directors shall prescribe.

B. On or before the 31st of July of each year, each insured bank shall file with the
Corporation a certified statement showing for the six months ending on the
preceding June thirty the amount of the assessment base and the amount of the
semi-annual assessment due to the Corporation for the period ending on the
following December thirty-one, determined in accordance with subsection (a) of
this Section, which shall contain or be verified by a written declaration that
it is made under the penalties of perjury.
 Each insured bank shall pay to the Corporation the amount of the semi-
annual assessment it is required to certify. On or before the 31st day of
January of each year, each insured bank shall file with the Corporation
a similar certified statement for the six months ending on the preceding
December thirty one and shall pay to the Corporation the amount of the
semi-annual assessment for the period ending on the following June
thirty which it is required to certify

C. Each bank which becomes an insured bank shall not be required to file any
certified statement or pay any assessment for the semi-annual period in which it
becomes an insured bank. On the expiration of such period, each such bank shall
comply with the provisions of subsection (b) of this section except that the semi-
annual assessment base for its first certified statement shall be the assessment
base of the bank as of the close of business on the preceding June thirty or
December thirty-one, whichever is applicable, determined in accordance with
subsection (a) of this section. If such bank has assumed the liabilities for deposits
 of another bank or banks, it shall include such liabilities in its assessment base.
The first certified statement shall show as the amount of the first semi-annual
assessment due to the Corporation, an amount equal to the product of one-half of
the annual assessment rate multiplied by such assessment base.

D. All assessment collections and income from operations after expenses and
charges shall be added to the DIF under Section 17 hereof.
 Such expenses and charges are:
i. the operating costs and expenses of the Corporation for the
calendar year
ii. additions to reserve to provide for insurance and financial
assistance losses, net of recoverable amounts from applicable
assets and collaterals, during the calendar year
iii. the net insurance and financial assistance losses sustained in said
calendar year

E. The Corporation (1) may refund to an insured bank any payment of assessment
in excess of the amount due to the Corporation or (2) may credit such excess
toward the payment of the assessment next becoming due from such bank and
upon succeeding assessments until the credit is exhausted.

F. Any insured bank which fails to file any certified statement required to be filed by
it in connection with determining the amount of any assessment payable by the
bank to the Corporation may be compelled to file such statement by mandatory
injunction or other appropriate remedy in a suit brought for such purpose by the
Corporation against the bank and any officer or officers thereof in any court of the
Philippines of competent jurisdiction in which such bank is located.

G. The Corporation, in a suit brought in any court of competent jurisdiction, shall be

entitled to recover from any insured bank the amount of any unpaid assessment
lawfully payable by such insured bank to the Corporation, whether or not such
bank shall have filed any such certified statement and whether or not suit shall
have been brought to compel the bank to file any such statement. No action or
proceeding shall be brought for recovery of any assessment due to the
Corporation or for the recovering of any amount paid to the Corporation in excess
of the amount due to it, unless such action or proceeding shall have been brought
within five years after the right accrued for which the claim is made, except where
the insured bank has made or filed with the Corporation a false or fraudulent
certified statement with the intent to evade, in whole or in part, the payment of
assessment, in which case the claim shall not have been deemed to have accrued
 until the discovery by the Corporation, that the certified statement is false or
fraudulent.

H. Should any insured bank fail or refuse to pay any assessment required to be paid
by such bank under any provision of this Act, and should the bank not correct such
failure or refusal within thirty (30) days after written notice has been given by the
Corporation to an officer of the bank citing this subsection, and stating that the
bank has failed or refused to pay as required by the law, the Corporation may, at
its discretion, file a case for collection before the appropriate court without
prejudice to the imposition of administrative sanctions allowed under the
provisions of this law on the bank officials responsible for the nonpayment of
assessment fees

I. The Corporation shall have the authority to collect a special assessment from any
member bank and prescribe the terms and conditions thereof to maintain the
target level of the DIF set by the Board of Directors in accordance with this Act

VIII. SANCTIONS AGAINST UNSAFE AND UNSOUND BANKING PRACTICES

 Whenever upon examination by the Corporation into the condition of any insured
bank, it shall be disclosed that an insured bank or its directors or agents have
committed, are committing or about to commit unsafe or unsound practices in
conducting the business of the bank, or have violated, are violating or about to
violate any provisions of any law or regulation to which the insured bank is
subject, the Board of Directors shall submit the report of the examination to the
Monetary Board to secure corrective action thereon.

 If no such corrective action is taken by the Monetary Board within forty-five (45)
days from the submission of the report, the Board of Directors shall, motu proprio,
institute corrective action which it deems necessary.

 The Board of Directors may thereafter issue a cease and desist order, and require
the bank or its directors or agents concerned to correct the practices or violations
within forty-five (45) days. However, if the practice or violation is likely to cause
insolvency or substantial dissipation of assets or earnings of the bank, or is likely
to seriously weaken the condition of the bank or otherwise seriously prejudice the
interests of its depositors and the Corporation, the period to take corrective action
shall not be more than fifteen (15) days.
  The order may also include the imposition of fines provided in Section 26(g)
hereof. The Board of Directors shall duly inform the Monetary Board of the
Bangko Sentral ng Pilipinas of action it has taken under this subsection with
respect to such practices or violations.

 The actions and proceedings provided in the preceding subsections may be

undertaken by the Corporation if, in its opinion, an insured bank or its directors
or agents have violated, are violating or about to violate any provision of this Act
or any order, rule or instruction issued by the Corporation or any written
condition imposed by the Corporation in connection with any transaction with or
grant by the Corporation.

 The Corporation may terminate the insured status of any bank that fails or refuses
to comply, within thirty (30) days from notice, with any cease-and-desist order
issued by the Corporation, or with any corrective action imposed by the Monetary
Board, under this section pertaining to a deposit-related unsafe and/or unsound
banking practice. Such termination shall be final and executory, and shall be
effective upon publication of the notice of termination in a newspaper of general
circulation.

 The deposits of each depositor in the bank on the effective date of the termination
of insurance coverage, less all subsequent withdrawals, shall continue to be
insured up to the maximum deposit insurance coverage for a period of one
hundred eighty (180) days. Additions to, or renewal of, existing deposits and new
deposits in such bank after the effective date of termination of insured status of
the bank shall not be insured by the Corporation.

 The bank shall not advertise or represent that additions to, or renewal of, existing
deposits and new deposits made after the effective date of termination aye
covered by deposit insurance.

Powers as a Corporate Body

1. Adopt and use a corporate seal
2. Have succession
3. Make contracts
4. To sue and be sued; complain and defend
5. Appoint by BOD officers and employees and define their duties, compensation and
required bonds, fix penalties as well as dismiss them
6. Prescribe by-laws
7. Exercise powers granted by the law as well as the incidental ones
8. Conduct examinations of banks but with prior approval of the Monetary Board; no
examination within 12 months from the last examination
a. Corporation in coordination with the Bangko Sentral may
i. conduct special examination if there is a threat of impending closure
ii. examine deposit accounts in case of unsafe or unsound bank practice
9. Act as a receiver
10. Prescribe rules to carry out the provisions of the Act
11. Establish its own provident fund consisting of contributions made by the Corporation,
its officers and its employees
a. PROVIDENT FUND. a retirement fund run by the government.
12. Compromise, condone and release ay claim or settled liability to the Corporation
under terms imposed by the BOD and write off receivables no longer recoverable
13. Determine interested and qualified acquirers for bank liquidations
14. Determine appropriate resolution method
15. Determine and implement mode of liquidation of a closed bank

POWERS AND RESPONSIBILITIES AND PROHIBITIONS

A. Fair and impartial administration of affairs; free use of Philippine mails
B. Appointment of:
a. Examiners to examine insured banks
i. Powers
1. Thorough examination of all affairs of the bank
2. Administer oaths
3. Examine, take and preserve testimonies
4. Compel presentation of books and documents and other records
ii. Responsibilities
1. Make a full and detailed report of the condition of the bank
 b. Claim agents
i. Powers
1. Investigate and examine all claims for insured and transferred
deposits
2. Administer and preserve oaths
c. Investigators
i. Powers
1. Conduct investigations on frauds, irregularities and anomalies
2. Administer and preserve oaths
C. Insured banks shall make reports of condition as required by the BOD; penalty for
non-compliance is a maximum of ten thousand pesos (Php 10,000.00) each day of
such failure
D. The Corporation shall have access to the reports of examination by and condition
to the BSP and vice versa.
a. Insured banks shall keep records of its daily deposit transactions in
compliance with the standards and of which such compliance is certified by
the President of the bank as well as the Compliance Officer

E. PROHIBITIONS TO THE PERSONNEL

a. General Rule: Directly or indirectly being an officer, director or stockholder
of any bank
i. Exception: Unless provided by the law
b. General Rule: Receive gift from any officer, director or stockholder of any
bank
i. Exception: Unless not of value
c. General Rule: Directly or indirectly being an officer, director or stockholder
of any bank
i. Exception: Unless authorized
F. General Rule: Underwriting or advancing of all legal costs and expenses in
connection with proceedings by the reason of the exercise of functions and duties
under this Act including those who are already retired but the proceedings pertain to
an act done or omitted by them during their employment
 a. Exception:
i. does not apply to proceedings initiated by the Corporation against its
officers, agents or employees
ii. does not apply to those that had committed negligence or misconduct
G. Such costs could be paid after or before the proceeding. If paid in advanced, it shall
be reimbursed if it was discovered that the officer is not eligible to the
indemnification
H. If there are no willful violation and gross negligence, the Corporation is free to the
fullest extent and shall be indemnified from any liability
I. Borrowing by examiners to their assigned banks of examination is prohibited during
the time that a transaction in such institution is being examined
 BANK RESOLUTION
• failure of prompt corrective action
a. Commencement of a resolutio • request

b. BSP shall inform the Corporation of the prompt corrective action towards any bank and share with
the latter any information
c. If failure is specifically due to capital deficiency, the Corporation may inquire into the deposit
records of the bank while still keeping in mind the clauses on confidentiality
d. Obligations of the stockholders, • ensure compliance with terms and conditions
• engage an independent appraiser for the valuation of the bank
directors and employees of the • ensure prudent management of assets, liabilities and records
bank • cooperate with the Corporation in the conduct of its authorities

e. Within 180 days from

resolution date, through at least
5 votes of the BOD, whether the
bank may be resolved through
purchase of assets and
assumption of liabilities or
• determine a resolution package
• identify and pre-qualify possible acquirers and investors
• authorize pre-qualified acquirers and investors to conduct due diligence to determine the valiation
of the bank
• conduct bidding to determine acquirer

mergers or consolidation, or
acquisition

f. Considerations when • FMV of assets and liabilities

• availability of qualified investor
determining appropriate • least cost to the DIF
resolution method • interest of the public

g. appoint persons as its agents to perform its powers on the bank resolution

h. prescribe guidelines or criteria

i. Act in accordance with Section 30 of RA 7653

j. Bank resolution on the purchase of assets and assumptions of liabilities shall be exempt from the
"Bulk Sales Law"
k. These are without prejudice to the actions of the Monetary Board.
 LIQUIDATION OF A CLOSED BANK

The Corporation is designated as a RECEIVER when a bank is ordered closed and proceed to
the takeover and liquidation.
 Banks closed SHALL NO LONGER BE REHABILITATED.

AUTHORITIES OF A RECEIVER AND EFFECTS OF PLACEMENT OF A BANK UNDER

LIQUIDATION
1. Authorities:

A. Modes of Liquidation. Adopt and implement the following:

a. Conventional
b. Purchase of assets and/or assumption of liabilities
B. Power as a Receiver:
a. Representation
b. Gather, take charge and administer assets, records and affairs
c. Convert the assets into liquid assets
d. Bring suits to enforce liabilities
e. Appoint persons as agents to perform functions of the Corporation as a
receiver
f. Appoint persons for forensic and fraud investigations
g. Pay accrued rentals, utilities and salaries for a period not exceeding 3
months
h. Collect claims of the closed bank and restructure its terms as may be
deemed advantageous
i. Hire private counsel
j. Borrow any asset if necessary to preserve dissipation of assets and
minimize losses to the depositors and creditors
k. Permit reduction of interest rate if unusually high, provided that such
reduction to earned and unpaid interest
 l. Utilize available funds for reasonable costs for the preservation of the
assets and the liquidation of the bank without the need for the approval of
the court
m. Charge fees for the liquidation of the bank of which the payment is subject
to the approval of the court
n. Distribute assets to creditors in accordance with rules on preference.
o. Dispose records not needed in the liquidation process
p. Exercise other inherent and necessary powers
C. After paying all claims, the Corporation shall pay surplus dividends at legal rate of
interest from the date of takeover to the date of distribution to creditors
D. If act is done in good faith, there shall be no liabilities borne by any officers,
employees pr agents

2. Effects of Placement
a. On corporate franchise or existence:
i. Until termination of the winding-up period for the purpose of
liquidation and for the disposal, conveyance and distribution of its
assets
b. On the powers and functions of its directors, officers and stockholders
i. Terminated upon closure and those people are barred from interfering
with the affairs of the bank
c. On the assets
i. Deemed in “custodia legis”
1. IN CUSTODIA LEGIS. “In the custody of the law”. In general,
when things are in custodia legis, they cannot be distrained, nor
otherwise interfered with by a private person.
ii. Proceeds in excess of the amount secured shall be returned by the BSP
to the receiver
iii. Preliminary attachment on the assets of the closed bank at the time of
the closure shall not give any preference to the attaching party
d. On labor relations
i. Employer-employee relationship is deemed terminated
e. On contractual obligations
i. The receiver may cancel contracts if:
1. not necessary for liquidation
2. grossly disadvantageous
f. On interest payments
i. Liability to pay is ceased upon closure
ii. Receiver shall have the ability (even without court approval) to assign
as payment to secured creditors the assets serving as collateral to those
loans; valuation depends on the prevailing market value on an “as is
where is” basis
a. AS IS WHERE IS. mean that the seller is selling, and the
buyer is buying an item in whatever condition it
presently exists, and that the buyer is accepting the item
"with all faults", whether or not immediately apparent.
g. On liability for penalties and surcharges for late payment and non-payment of
taxes
i. Not liable for:
1. Real property tax
2. Capital Gains Tax
3. Transfer tax
h. On bank charges and fees on services
i. Receiver may charge for services rendered such as execution of deeds and
certifications
i. On actions pending for or against the closed bank
i. Maybe suspended upon motion of the receiver for a period not
exceeding 180 days and referred to mandatory mediation
1. MANDATORY MEDIATION. the process in which parties are
required, by procedural rule, to attend mediation as a
precondition to having their case heard in court.
j. On final decisions against the closed bank
 i. Execution and enforcement of a final decision shall be “stayed” and the
prevailing party shall file the final decision as a claim with the
liquidation court.
1. STAY. The act of temporarily stopping a judicial proceeding
through the order of a court.
k. On docket and other court fees
i. Payment shall be deferred until the action is terminated with finality
1. DOCKET. a sum of money charged by a court for placing a case
on its docket or calendar.
l. All assets, documents and records are presumed held by the bank on its capacity
as the owner
m. Exercise of authority is presumed to be in the regular course of business
n. Assets and documents shall retain their private nature

NOTICE OF CLOSURE AND TAKEOVER ACTIVITIES

1. Designation by the Corporation as the receiver is equal to the notice of closure to the
highest-ranking officer of the bank or if not present, post the notice on the entrance.
a. Effectivity of the closure = Service of the notice of closure
2. Authority to use reasonable force if necessary
3. As a result of their fiduciary capacity, all directors shall immediately surrender to the
receiver the assets, documents and records in their possession or administration.
4. When needed, the LGU provide assistance to the receiver on the service of the notice
of closure and actual takeovers
 PURCHASE OF ASSETS AND ASSUMPTIONS OF LIABILITIES

1. Authority lies on the receiver (even without court approval)

a. Disposition of bank licenses is subject to the approval of the BSP
2. Action by the receiver is final and executory

CONVENTIONAL LIQUIDATION

1. Asset Management and Conversion

a. Assets gathered shall be verified to determine their realizable value
b. Conversion shall be carried out in a fair and transparent manner.
c. The following are the authority of the receiver:
i. Representation before the:
1. LRA (Land Registration Authority)
2. Bureau of Lands
3. Register of Deeds
4. LTO (Land Transportation Office)
5. Assessor’s office
6. SEC (Securities and Exchange Commission)
a. Verifying authenticity of documents
b. Registering interest on a property
c. Consolidating ownership over an asset
d. Securing CTC of documents
e. Securing appropriate certifications
f. Others
ii. Physical or ocular inspection of the properties
iii. Determine disposal price of assets
iv. Dispose real or personal properties
 v. Engage third parties to assist in the liquidation
d. Rules on the Management and Conversion
i. Upon notice of closure, appropriate offices shall not allow any
transactions affecting the assets of the closed bank
ii. Upon notice of closure, any person in possession of the assets and
records of the bank shall turnover custody of assets including
evidences of deposit to the receiver
iii. Such person shall not allow transactions regarding the assets unless
directed by the receiver
e. Funds received from the conversion maybe invested in government securities
f. Proceeds from the sale of branch and bank licenses shall be for the benefit
of the creditors
2. Petition for Assistance in the Liquidation of the Closed Bank
a. PETITION FOR ASSISTANCE IN THE LIQUIDATION. Is a special proceeding
which includes the declaration of the concomitant right of its creditors and the
order of payment of their valid claims in the disposition.
i. CONCOMITANT. naturally accompanying or associated.
b. Procedures shall be considered “in rem”
i. IN REM. "against a thing." An in rem proceeding adjudicates the rights
to a particular piece of property for every potential rights holder, even
potential rights holders who are not named in the lawsuit.
c. Liquidation courts shall have exclusive jurisdictions on disputed claims and
assist in the enforcement of individual liabilities
d. Petition is filed in the RTC which has jurisdiction over the principal office.
e. Petition shall be filed “ex parte”
i. EX PARTE. done with respect to or in the interests of one side only or
of an interested outside party.
f. Persons with claims against the assets shall file their claims with the receiver
within 60 days from the date of publication of notice of closure.
i. If denied, proceed to the liquidation court, filing is within 60 days upon
denial.
g. A claim whose validity is not yet final at the time of final asset distribution shall
be considered as a contingent claim and shall not be paid
 h. Upon finality of the approval of final asset distribution, the receiver and its
agents shall be freed from any claims and liabilities
i. The receiver shall submit a final report on the implementation of the final asset
distribution
3. Winding-up.
a. Creditors shall have a period of 6 months from the date of the notice of final
asset distribution to claim payment of principal obligations and surplus
dividends
i. Failure shall be deemed as waiver on his/her right to payment.
b. Individual stockholder shall have a period of 6 months from the date of the
notice of final asset distribution to claim residual assets
i. Failure shall be deemed as waiver on his/her right to payment.
c. After the lapse of six months, all assets unclaimed shall be turned over to the
Bureau of Treasury
d. Receiver shall continue to keep records for a period of six months and then
he/she could dispose it after.

PERMANENT INSURANCE FUND

 “PIF” shall be 3 billion pesos (Php 3,000,000,000.00)

1. DEPOSIT INSURANCE FUND. The capital account of the Corporation consisting

principally of the following:
a. Permanent Insurance Fund
b. Assessment collections subject to charges
c. Reserves for insurance and financial assistance loses and retained earnings
i. Shall be maintained reasonable level
2. Corporation may conduct a study after two (2) years and after every five (5) years
thereafter on the need to adjust the PIF, insurance cover and assessment rate and
base, of which actuarials may be hired for such services.
Dividend Declaration
▪ The corporation shall remit dividends to the national government only if the target
Deposit Insurance Fund (DIF) level for the applicable year has been reached
▪ The dividend rate shall be at least fifty percent (50%) of the income from other
sources only. Note: all assessment collections shall not be considered as income.

PAYMENT OF INSURED DEPOSITS

Modes of payment: made as soon as possible either:

1) by cash
2) by making available to each depositor a transferred deposit in another insured bank
in an amount equal to insured deposit of such depositor
The Corporation, in its discretion, may require proof of claims to be filed before paying the
insured deposits, and that in any case where the Corporation is not satisfied as to the validity
of a claim for an insured deposit, it may require final determination of a court of competent
jurisdiction before paying such claim.

Period for the PDIC to settle claim: Six (6) months from the date of filing of the claim.
▪ Failure to settle the claim, within six (6) months from the date of filing of claim for
insured deposit, where such failure was due to:
a. grave abuse of discretion
b. gross negligence
c. bad faith or
d. malice
: shall, upon conviction, subject the directors, officers or employees of the Corporation
responsible for the delay, to imprisonment from six (6) months to one (1) year.

▪ Except: The period shall not apply if the validity of the claim requires the
resolution of issues of facts and or law by another office, body or agency by the
Corporation together with such other office, body or agency.

 The corporation, upon payment of any depositor as provided for in Section 19 of this
Act, shall be subrogated to all rights of the depositor against the closed bank to the extent
of such payment.
a. The Corporation shall commence the determination of insured deposits due to the
depositors of a closed bank upon its actual takeover of the closed bank.
▪ The Corporation shall give notice to the depositors of the closed bank of the
insured deposits due by whatever means deemed appropriate by the BOD.
▪ The Corporation shall publish the notice once a week for at least three
(3) consecutive weeks in a newspaper of general circulation or, when
appropriate, in a newspaper circulated in the community of
communities where the closed bank or its branches are located.

b. Payment of an insured deposit to any person by the Corporation shall discharge the
Corporation
▪ Payment of transferred deposit to any person by the new bank or by an
insured bank shall discharge the Corporation; and such new bank or other
insured bank—to the same extent that payment to such person by the closed
bank would have discharged it from liability for the insured deposit.

c. Except as otherwise prescribed by the BOD, neither the Corporation nor such other
insured bank shall be required to recognize as the owner of any portion of a deposit
evidences by a passbook, certificate of deposit or other evidence of deposit
determined by the Corporation to be an authentic document.

d. The Corporation may withhold payment of such portion of the insured deposit of any
depositor in a closed bank as may be required to provide for payment of any liability
of such depositor as a stockholder of the closed bank.

e. Unless otherwise waived by the Corporation, if the depositor in the closed bank shall
fail to claim his insured deposits with the Corporation within two (2) years from
actual takeover of the closed bank by the receiver, or does not enforce his claim filed
within two (2) years after the two-year period to file a claim, all rights of the depositor
with respect to the insured deposit shall be barred.

CORPORATE FUNDS ASSETS

 Money of the Corporation denominated in the local currency, not otherwise

employed, shall be invested in obligations of the Republic of the Philippines or in
obligations guaranteed as to principal and interest by the Republic of the Philippines.
(subject to guideline and limits as approved by the BOD)
 a. The Corporation may also invest in debt investments denominated in foreign
currencies issued or guaranteed by the Republic of the Philippines.

b. The Corporation shall likewise be authorized to buy and/or sell debt

instruments and foreign currencies from any government securities eligible
dealers or any counterparties or brokers, accredited by the PDIC Board.

c. The Corporation shall be authorized to open securities custodianship and

settlement accounts.

i. The banking or checking accounts of the Corporation shall be kept with

the Bangko Sentral ng Pilipinas (or with any other bank designated as
depository or fiscal agent of the Philippine government).
ii. The Deposit Insurance Fund of the Corporation shall be preserved and
maintained at all times.
iii. Assets of the Corporation shall be exempt from attachment,
garnishment, or any other order or process of any court, agency, or any
other administrative body.
Financial Assistance
a. The Corporation is authorized to make loans to, or purchase the assets of, or assume
liabilities of, or make deposits in:

1. A bank in danger of closing, upon its acquisition by a qualified investor

2. A qualified investor, upon its purchase of all assets and assumption of all
liabilities of a bank in danger of closing; or
3. A surviving or consolidated institution that has merged or consolidated with a
bank in danger of closing

b. When the Monetary Board has determined that there are systemic consequences of a
probable failure or closure of an insured bank, the Corporation may grant financial
assistance to such insured bank in such amount as may be necessary to prevent its
failure or closure.

AUTHORITY TO BORROW

 The Corporation is authorized to borrow from the Bangko Sentral ng Pilipinas and
the BSP is authorized to lend to the Corporation. Provided:
 a. That any such loan as may be granted by the BSP shall be consistent with the
monetary policy
b. That the rate of interest thereon shall be fixed by the Monetary Board

 When in the judgment of the BOD, the funds of the Corporation are not sufficient to
provide for an emergency or urgent need to attain the purposes of this Act, the
Corporation is authorized to borrow money, obtain loans or arrange credit lines from
any bank. Provided:

a. That such loan shall be of short-term duration

b. That no prior Monetary Board opinion shall be required for the Corporation
and its counterparties on individual drawdowns

ISSUANCE OF BONDS, DEBENTURES AND OTHER OBLIGATIONS

A. With the approval of the President of the Philippines, upon the recommendation of
the Department of Finance, the Corporation is authorized to issue bonds, debentures,
and other obligations, both local or foreign. Provided:

a. That the BOD shall determine the interest rates, maturity and other
requirements of said obligation
b. That the Corporation may provide for appropriate reserves for the
redemption or retirement of said obligation

B. All notes, debentures, bonds, or such obligations issued by the Corporation shall be
exempt from taxation both as to principal and interest, and shall be fully guaranteed
by the Government of the Republic of the Philippines.
C. The Corporation may issue notes, debentures, bonds, or other debt instruments
without the approval of the President of the Philippines, as long as these shall not be
guaranteed by the national government.
D. The Board of Directors shall have the power to prescribe terms and conditions, rules
and regulations for such issuance, reissuance, servicing, placement and redemption
of the bonds.

Reports
A. The Corporation shall annually make a report of its operations to the Congress as
soon as practicable after the 1st day of January in each year.
B. The financial transactions of the Corporation shall be audited by the Commission on
Audit.
 ▪ All such books, accounts, records, reports, files, papers, and property of the
Corporation shall remain in possession and custody of the Corporation.
C. A report of the Audit for each fiscal year ending on June 30 shall be made by the
Auditor General to the Congress not later than January 15 following the close of such
fiscal year.

Sanctions and Penalties

A. Every insured bank shall display at each place of business maintained by it a sign or
signs, and shall include statement in all its advertisements to the effect that its
deposits are insured by the Corporation.
▪ Exception: Advertisements which do not relate to deposits or when it its
impractical to include such statement therein.

B. No insured bank shall pay any dividend on its capital stock or interest on its capital
notes or debentures or distribute any of its capital assets while it remains in default
in the payment of any assessment due to the Corporation.
▪ Exception: If such default is due to a dispute between the insured bank and the
Corporation over the amount of such assessment.

C. Without prior written consent by the Corporation, no insured bank shall:

1) merge or consolidate with any bank or institution
2) assume liability to pay any deposits made in any bank or institution
3) transfer assets to any bank or institution in consideration of the assumption of
liabilities for any portion of the deposits made in such insured bank.
D. The Corporation may require an insured bank to provide protection of indemnity
against burglary, defalcation, losses arising from discharge of duties by, or particular
acts of defaults of its directors, officers, or employees, and other similar insurable
losses.

E. Any assessment payable by an insured bank under this Act shall be subject to
payment of interest computed from the date of such assessment became due and
payable at the legal rate for loans as prescribed by law or appropriate authority.
▪ In case of willful failure or refusal to pay – there shall be added a penalty
equivalent to twice the amount of interest payable as computed herein for
each day such violations continue.

F. The penalty of imprisonment of not less than six (6) years but not more than twelve
(12) years or a fine not less than Fifty thousand pesos (P50,000.00) but not more than
Ten Million Pesos (P10,000,000.00), or both, at the discretion of the court shall be
imposed upon:
Director, officer, employee or agent of a bank for:

1) Any willful refusal to submit reports as required by law, rules & regulations.

2) Any unjustified refusal to permit examination and audit of the deposit records.

3) Any willful making of a false statement or entry in any bank report.

4) Submission of false material information in connection with any financial assistance

extended to the bank

5) Splitting of deposits or creation of fictitious or fraudulent loans or deposit accounts.

6) Refusal to receive the notice of closure as provided under Sec 14 of this Act.

7) Refusal to allow the Corporation to take over a closed bank

8) Refusal to turn over or destroying or tampering bank records.

9) Fraudulent disposal, transfer or concealment of any asset, property or liability of the

closed bank

10) Violation of, or causing any person to violate, the exemption from garnishment, levy,
attachment or execution provided under this Act and the New Central Bank Act.

11) Any willful failure or refusal to comply with, or violation of any provision of this Act.

12) Other acts inimical to the interest of the bank or the Corporation.

Any person for:

1) Refusal to disclose information, records or data pertaining to the bank accounts of a

closed bank to the receiver.

2) Refusal to turn over possession or custody of the asset and record of the closed bank to
the receiver.

3) Refusal or delaying the:

▪ verification of authenticity of the ownership documents
▪ registration of interest of the closed bank on a specific property
▪ consolidation of ownership over an asset of the closed bank
▪ act of securing certified true copies of documents in relation to an asset od the
closed bank
 ▪ act of securing the appropriate certification from the agencies or entities stated in
Sec 16 of this Act
▪ conduct of a physical or ocular inspection of the properties owned by, or mortgaged
to, the closed bank, to determine their existence and present condition
▪ other related activities of the receiver

4) Allowing the withdrawal from deposits or disposition of any asset of the closed bank
other than by the receiver

5) Willfully violating any provision of this Act

6) Conspiring or willfully participating in any of the offenses enumerated in Par 1 of this

section

Any law enforcement officer or local government official who refuses or fails to
assist the receiver in the service of the notice of closure, as provided under Sec 14
of this Act

G. The Board of Directors is hereby authorized to impose administrative fines for any
act of omission enumerated in the preceding subsection.

H. The penalty of imprisonment of not less than ten (10) years but not more than twelve
(12) years or a fine not less than Five hundred thousand pesos (P500,000.00) but not
more than Ten Million Pesos (P10,000,000.00), or both, at the discretion of the court
shall be imposed upon:
▪ any depositor who files a fictitious and/or fraudulent claim for deposit
insurance
▪ any bank officer who certifies to the validity of the deposit liabilities which is
subsequently verified to be fictitious and/or fraudulent

I. The penalty of imprisonment of not less than twelve (12) years but not more than
fourteen (14) years shall be imposed upon any person who participates, or attempts
to participate, in a scheme to defraud a bank

Additional amendments:
▪ If the offence shall have been committed by a director or officer of the bank, the
penalty of imprisonment of not less than fifteen (15) years, but not more than
seventeen (17) years shall be imposed
 ▪ If the offence shall have resulted in systemic consequences, as determined by the BSP,
the penalty of imprisonment of not less than eighteen (18) years but not more than
twenty (20) years shall be imposed.
Sec. 27. No court, except the Court of Appeals, shall issue any temporary restraining order,
preliminary injunction or preliminary mandatory injunction against the Corporation for any
action under this Act.
Exception: The Supreme Court may issue a restraining order or injunction when
the matter is of extreme urgency involving a constitutional issue, such that unless a
temporary restraining order is issued, grave injustice and irreparable injury will arise

▪ Any restraining order or injunction issued in violation of this Section is void and of no
force and effect and any judge who has issued the same shall suffer the penalty of
suspension of at least sixty (60) days without pay.

Submitted by:
Group 3
▪ Edora, Christine B.
▪ Esguerra, Chenelyn A.
▪ Gamit, Lliena Jane D.
▪ Milanes, Whizelle O.
▪ Ramos, Maria Isabel S.
▪ Reyes Jr., Arnel A.
▪ Sison, Jervee A.
▪ Vergara, Queen Ernna F.
▪ Villanueva, Jefferson Ivan M.