Polytechnic University of the Philippines

Sta. Mesa Manila

College of Accountancy and Finance
LAW 20033 – Regulatory Framework and Legal Issues in
Business

Republic Act 1405 An Act Prohibiting Disclosure of or Inquiry Into,

Deposits with any Banking Institution and Providing Penalty Therefore

I. MULTIPLE CHOICE QUESTIONS. Select the best answer

1. Foreign currency deposits are absolutely confidential and cannot be
disclosed.
a. General Rule
b. Absolute Rule
c. If ordered by court
d. With Exception

2. The following instances do not violate the Bank Secrecy Law, choose the
best answer.
a. Submission of report, and turn-over to, the court officer or executing
sheriff of garnished amounts
b. Turnover to liquidator of bank, account amounts to satisfy writ of
garnishment issued to collect delinquent taxes
c. Both A and B
d. None of the above

3. Which of the following is/are the criminal liability for violating the Republic
Act No. 1405 (Bank Secrecy Law)?
a. Imprisonment of not more than five (5) years
b. Fine of at least twenty thousand pesos (P20,000)
c. Either A or B
d. Neither A or B

4. The following are the exceptions to the Bank Secrecy Law, except:
a. Written permission or consent in writing by the depositor
b. In cases of impeachment
c. Upon order of the court in cases where the money deposited or
invested is the subject matter of the litigation
 d. Upon order of the court in cases of bribery or dereliction of duty of
bank employees

5. If an employee of the Land Bank of the Philippines disclosed information

concerning the deposits of Juan de la Cruz to another person without
Juan’s permission, will the employee be liable for his/her actions?
a. No, because the employee is allowed to disclose information of the
bank’s depositors.
b. Yes, the employee is already in violation of the Act and is
subject to an imprisonment of more than five years.
c. Yes, the employee is already in violation of the Act and is subject to
a fine of not more than twenty thousand pesos.
d. No, because the employee is allowed to disclose information of the
depositor if the depositor is a debtor of the person to whom the
information is disclosed.

6. The Bank Secrecy Law (RA 1405) prohibits disclosing any information
about deposit records of an individual without court order except -
a. In an examination to determine gross estate of a decedent.
b. In an investigation for violation of Anti-Graft and Corrupt Practices.
c. In an investigation by the Ombudsman.
d. In an impeachment proceeding.

7. The following are the exceptions to the Rule on Secrecy of Bank Deposits
except.
a. Upon written consent of the depositor
b. Impeachment cases
c. Upon order of competent court in cases of bribery or dereliction of
duty of public officials or where the money deposited or invested is
the subject of litigation
d. None of the above

8. What is the purpose of secrecy of bank deposits?

a. To encourage deposit in banking institutions
b. To discourage private hoarding so that banks may lend such funds
and assist in the economic development of the country.
c. Both a and b.
d. Neither a nor b
 9. Mike’s parents wanted to know the deposit of their son. Can they inquire
from the bank considering they are parents of the depositor?
a. Yes, family affiliates can inquire anytime from the bank of their
family member.
b. No, any person is not allowed to examine, inquire or even look at
someone's deposit without any exception.
c. Yes, by written permission of Mike, the depositor
d. No, because they are in the same bloodline.

10. Exception to Foreign Currency Deposit Act do not include

a. Written consent of depositor
b. Upon order of the competent court
c. Examination by the BPS, PDIC, PCGG and COA
d. Under Section 27 and 28 of the Human Security Act

II. TRUE OR FALSE QUESTIONS. Write TRUE if you think a statement is

True and FALSE if you think the statement is FALSE.

1. Deposits are money or funds placed with a bank that can be withdrawn on
depositor’s order of demand.
2. There is a violation of bank secrecy law in garnishment since the amount
of deposit is disclosed.
3. Foreign currency deposits are also governed by Republic Act No. 1405
(Bank Secrecy Law).
4. The Bank Secrecy Law protects all deposits of whatever nature in banks
or banking institutions in the Philippines as well as investments in
government bonds.
5. Investments in Government Bonds refer to investments in bonds issued by
the Government of the Philippines and publicly listed companies.
6. The purpose of Secrecy in bank deposits is to discourage private hoarding
so that banks may lend such funds and assist in the economic
development of the country.
7. It shall be lawful for any official or employee to disclose any information
about deposits.
 8. To encourage private hoarding so that the same may be properly utilized
by banks in authorized loans to assist in the economic development of the
country.
9. Deposits may only be disclosed if a bank account is being investigated in
court.
10. Upon order of the competent court in cases subject to litigation, money
deposited is not the subject matter in order to constitute an exception
related to the Secrecy of Bank Deposits.

ANSWER KEY

Part 1 MULTIPLE CHOICE QUESTIONS

1. D 5. A
2. A 6. D
3. A 7. C
4. D 8. C
5. C 9. B

Part 2 TRUE OR FALSE QUESTIONS

1. TRUE
2. FALSE
3. FALSE
4. TRUE
5. FALSE
6. TRUE
7. FALSE
8. FALSE
9. TRUE
10. FALSE
GROUP 3 MEMBERS

ABORDO, AIZEL MIN A.

AVERILLA, KATRINA MAE A.

BAYRON, MIKE E.

CAYABYAB, DWYER SYDNEY

FRANCIA, MERYL KAYE A.

MADUCDOC, PHILLIP HENRY G.

REYEL, RAYMART C.

SANTIANO, JOHN CARLO B.

VOCAL, YSSA CLARIN M