General Banking Law

Philippine Deposit Insurance Corporation

Secrecy of Bank Deposits
Unclaimed Balances Law
Republic Act No. 8791
The State recognizes the vital role of banks in
providing an environment conducive to the
sustained development of the national economy
and the fiduciary nature of banking that
requires high standards of integrity and
performance.
 "Banks" shall refer to entities engaged in the lending of
funds obtained in the form of deposits.

To be considered as a bank, three elements that must be

present;

1. The entity must be engaged in lending funds

2. Fund must be obtained from the public with at least
20 depositors
3. Funds are in the form of deposits
Banks shall be classified into:
a) Universal banks; f) Islamic banks
b) Commercial banks; g) Other classifications
c) Thrift banks determined by the Monetary
d) Rural banks Board of the Bangko Sentral
e) Cooperative banks ng Pilipinas

The operations and activities of banks shall be

subject to the supervision of the Bangko Sentral.
 The Securities and Exchange Commission shall not
register the articles of incorporation of any bank, or
any amendment thereto, unless accompanied by a
certificate of authority issued by the Monetary
Board, under its seal.
 Such certificate shall not be issued unless the
Monetary Board is satisfied with the evidence submitted to it:

1. All requirements of existing laws and regulations to engage in

the business for which the applicant is proposed to be
incorporated have been complied with;

2. The public interest and economic conditions, both general and

local, justify the authorization; and

3. The amount of capital, the financing, organization, direction

and administration, as well as the integrity and responsibility
of the organizers and administrators reasonably assure the
safety of deposits and the public interest.
 There shall be at least five (5), and a maximum of
fifteen (15) members of the board of
directors of bank, two (2) of whom shall be
independent directors.

In the case of a bank merger or consolidation, the

number of directors shall not exceed twenty-one (21).
The board of directors is primarily responsible for the
corporate governance of the bank/quasi-bank/trust entity.
Directors are those:

1. Named as such in the articles of incorporation;

2. Duly elected in subsequent meetings of the stockholders; or
3. Elected to fill vacancies in the board of directors.
 Directors, in general, shall not receive any
compensation as such directors, except for reasonable
per diems, in the absence of any provision in the
corporation’s by-laws fixing their compensation.
As a general rule, no appointive and elective public official,
whether full-time or part-time, shall at the same time serve
as the officers of any private bank.

Under the Charter of the Bangko Sentral, the members of

the Monetary Board and Bangko Sentral personnel are
disqualified from being an officer of any bankwhich is
subject to supervision or examination by the Bangko
Sentral.
Universal or commercial banks may open branches
or other offices within or outside the Philippines
upon prior approval of the Bangko Sentral.
Banks, including their branches and officers, doing
business in the Philippines, shall observe a regular
banking week of five (5) days, except when such
holidays.

Banks shall transact business for at least six (6)

hours each day during their regular banking week.
Voluntary liquidation shall be undertaken by the bank as a
consequence of voluntary dissolution, such as:

• By the vote of a board of directors and stockholders, where

no creditors are affected;

• A judgment by the Securities and Exchange Commission

(SEC) after hearing the petition for voluntary dissolution

• By amending the articles of incorporation to shorten the

corporate term
Section 30 describes involuntary liquidation where
the bank is first placed under receivership by the
Monetary Board and subsequently, under
liquidation.
 A foreign bank may transact business in the
Philippines through the establishment of a branch
or an offshore banking unit.
Offshore banking refers to the conduct of banking
transactions in foreign currencies involving the
receipt of funds from external sources and the
utilization of such funds
The Monetary Board is authorized to issue
certificates of authority to operate offshore
banking units.
The operations and activities of offshore banking
units shall be conducted under the supervision of
the Bangko Sentral.
 When a foreign bank has more than one branch or
other office in the Philippines, all such branches and
offices shall be treated as one unit and all references
to the Philippine branches and offices of such foreign
bank shall be held to refer to such unit.
National Law of Foreign Bank

Philippine Domestic Law

The Monetary Board may revoke a foreign bank’s license to
do business in the Philippines on the following grounds:

1. Insolvency

2. Imminent danger of insolvency; or

3. Continuance in a business will involve probable loss to

those transacting business with it.
Upon the revocation of the license of a foreign
bank by the Monetary Board, it shall be
unlawful for it to transact any business within
the Philippines.
Sanctions and penalties applicable to domestic banks
are applicable to foreign banks
Republic Act No. 3591
The Corporation shall, as a basic policy, promote and
safeguard the interests of the depositing public by way
of providing permanent and continuing insurance
coverage on all insured deposits.
Roles of PDIC:

1. Deposit Insurance
2. Co-Regulator of Banks
3. Liquidation of Closed Banks
ALL deposits of commercial banks, savings and mortgage
banks, rural banks, private development banks,
cooperative banks, savings and loan associations, as well
as branches and agencies in the Philippines of foreign
banks and all other corporations authorized to perform
banking functions in the Philippines, are insured with
PDIC.
 P500,000 per depositor

To carry out the purposes of this Act, the permanent

insurance fund shall be Three billion pesos
(P3,000,000,000.00).
 The Corporation shall commence the determination of
insured deposits due the depositors of a closed bank upon
its actual takeover of the closed bank.
The payment of the insured deposits on the such closed bank
shall be made by the Corporation 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 the insured
deposit of such depositor

The depositor must claim his insured deposits within 2 years.

 Depositors with valid deposit accounts with balances of
P100,000 and below are not required to file claims.

Postal Money Orders are sent to these depositors at their

respective mailing addresses found in the bank records or
indicated in the MAUF.
1. DEPOSITOR
2. PARENT
3. AGENT
4. TRUSTEE
5. EACH DEPOSITOR/ACCOUNT HOLDER
6. AUTHORIZED REPRESENTATIVE/s
 When the Corporation has determined that an insured
bank is in danger of closing, in order to prevent such
closing, the Corporation, in the discretion of its Board of
Directors, is authorized to make loans to, or purchase the
assets of, or assume liabilities of, or make deposits in, such
insured bank.
Republic Act No. 1405
All kinds of deposits whether fixed or current are to
be treated as loans and are to be covered by the law
on loans.
1. It hopes to discourage private hoarding; and

2. Encourage the people to deposit their money in

banking institutions, so that it may be utilized by
way of authorized loans and thereby assist in
economic development of the country
 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 may not be examined, inquired or
looked into by any person, government official,
bureau or office.
1. Upon written permission of depositor
2. In cases of impeachment
3. Upon order of a competent court in cases of
bribery or dereliction of duty of public officials
4. In cases where the money deposited or invested is
the subject matter of litigation
5. Or when the depositor is an elective or appointive official
of the republic of the Philippines;

6. In case inquiry of the BIR of bank accounts of a decedent

for estate tax purposes or in case of a tax compromise.

7. Incidental disclosures of unclaimed balances

8. Upon order of a competent court in cases of violation of

the AMLA
Safety deposit boxes

- It is a lockbox stored in a bank’s vault to secure a

customer’s valuables. A safety deposit box is not
strictly a deposit; it is a special kind of deposit.
GENERAL RULE: Any person, government official,
bureau, or office.

EXCEPTION: The Ombudsman is not covered among

the persons banned under SBD
Republic Act No. 6426 is an act constituting a foreign
currency deposit system in the Philippines, and for
other purposes which also provides a prohibition
against disclosure or inquiry into said deposits.
Republic Act No. 3696
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 any further deposits or
withdrawals during the preceding ten (10) years or more.
 judicial process in which the state, by virtue of its
sovereignty, steps in and claimed abandoned, left
vacant, or unclaimed property, without there being an
interested person having legal claim thereto.
 A judicial process in which the state, by its
sovereignty, steps in and claimed abandoned, left
vacant, or unclaimed property, without there being an
interested person having legal claim thereto.
Within the month of January of every odd year, banks,
building and loan associations, and trust corporations
shall forward a statement of all credits and deposits,
of persons known to be dead or those who have not
made any further deposits or withdrawals preceding
ten years or more, to the Treasurer of the Philippines.
 Act No. 3936 requires banks to publicize a sworn
statement of unclaimed balances once a week for
three consecutive weeks in at least two newspapers of
general circulation.
whenever he is informed of such unclaimed balances,
the office of solicitor general shall commence or file
an action/s in the name of the People of the Republic
of the Philippines in the Regional Trial Court.
 At the time of issuing summons in the action above
provided for, the clerk of court shall also issue a notice
signed by him, directed to all persons, claiming any
interest in any unclaimed balance mentioned in said
complaint.
 prescribes the Uniform Rules and Procedure for
Reactivation of Unclaimed Balances reported to the
Treasurer of the Philippines.
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
2. Authentication
3. Letter Request of the Covered Institution
4. Deed of Undertaking
5. Letter of Authority to Reactivate
6. Entity Requirements.
a. Division Chief/Head Law & Litigation Division Legal

Service

b. Director, Legal Service

c. Deputy Treasurer of the Philippines

d. Treasurer of the Philippines

 This circular shall take effect fifteen (15) days after
publication. Orders, circulars and/or Memoranda which are
inconsistent herewith are hereby revoked and modified
accordingly
 Ma. Ramona Sarad Airha Marie Mesayra

Anjelika Viesca Kimberly Tiao Anne Jelline

Castillo