Republic Act No.

3591

Philippine
Deposit
DATE

October

Insurance 05 2022

Corporation This presentation is

presented by students from
BSA-2C namely Besas,
PDIC LAW Cabigao, De Guzman,
Nantes, and Sales.
 Definition and Purpose of PDIC

Composition of Corporation
and its Powers

Board of Directors

Agenda Deposit

Insured Deposit and Maximum Liability

Prohibitions of PDIC

Receivership

Liquidation and Requirement for Claims

 Philippine Deposit Insurance
Corporation (PDIC) - R. A 3591
BASIC POLICY

Philippine Deposit Insurance Corporation or also

To promote and safeguard
1 the interests of the
depositing public
known as PDIC was created by R. A. No. 3591 on
June 22, 1963 as an insurer of deposits in all banks
entitled to the benefits of insurance under the
PDIC Charter

To strengthen the mandatory

The primary purpose is to act as deposit insurer,
deposit insurance coverage as a co-regulator of banks, and as receiver and
2
system to generate, preserve, liquidator of closed banks.
maintain faith and confidence
in the country's banking
system
Composition Board of Directors

of
the
Corporation
Secretary of Governor President of the Four members from
Finance of BSP Corporation the private sector

Note: Note:
The president of These four appointive
the corporation directors shall serve for
shall serve the term a term of six years
of six years on a unless sooner removed
full-time basis. for cause and shall be
The president of subject to only one
the corporation 1. Reappointment
shall also serve as 2. Appointees shall
the Vice Chairman serve for a period of
of the Board three (3) years
Qualifications of the members of
the board
The Board of Directors shall the authority:
No person shall be appointed as a
member of the board unless he/she
be:
Of good moral character
Of unquestionable integrity and
responsibility
Of known prohibit and patriotism
Is recognized of competence
At least thirty-five (35) years old
Powers of Board of Directors
Approve and issue rules and regulations
Act as the policy - making body and
constitute Board Committees
Establish a human resource management
system
Note: such system shall aim to establish
professionalism and excellence at all
levels of the Corporation
Approve a compensation structure
Appoint, establish the rank, fix the
remuneration, benefits , including health
care services
 Powers
of Approve policy
Adopt an annual budget and
the authorize such expenditures
Corporation Approve the target level of the
Deposit Insurance Fund (DIF)
Review the organizational set-up
Design, adopt and revise
Promote and sponsor the local or
foreign training or study
personnel
President of the Corporation
POWERS & DUTIES

1. Prepare the agenda for the 2. Submit for the consideration of 3. Execute and administer the
meeting the Boarda, the policies and policies and measures
measures

4. Direct and supervise the oprations 5. Represent the Corporation in all

and internal consideration dealings 6.To authorize contracts with his/her
signature

8. Delegate his power to represent

7. Represent the Corporation 9. Exercise such other powers
 Power & Responsibilites
of the Board of the
Powers & Functions of PDIC
Directors

Administer the affairs of the

1 Insurer of deposit liabilites of banks 5 Bank Resolution Corporation fairly.

appoint examiners to examine and any

insured bank and appoint investigators to
6 Liquidation of a Closed Bank conduct investigations for cases of fraud
2 Conduct insurance risk evaluation and irregularities committed in banks.

7 Others Require reports of conditions.

3 Assessment of members banks

To have access to reports of

The PDIC's power as examination made by.
Corporation body is almost the
Sanctions Against Unsafe and same with the business
4 corporations.
Unsound Banking Practices
Advance all legal cost and expenses in
connection with the exercise of authority
of functions and duties under the PDIC
act.
Prohobitions
Personnel of the Corporation are prohibited from:

Receiving any gift from any

employees of banks.

Being an officer directly or indirectly

of any bank except otherwise
provided in this Act.

Revealing any information without

any authorization.
Note: The examiners are also prohibited to borrow
from their assigned bank to be examined.
Deposit
unpaid balance of money or its equivalent
received by a bank for which it has given
or obliged to give credit to an evidence of
Deposits of all commercial banks, savings and
deposit issued in accordance with BSP
mortgage banks, rural banks, private
rules and regulations. development banks, cooperative banks, savings
and loan associations, as well branches and
agencies in the PH of foreign banks and all other
corporations authorized to perform banking
functions in the country.

Deposit that are insured by PDIC

Deposit
The Corporation shall not pay deposit
Notes: insurance for the following:
The Board of Director will determine and
prescribe by regulations to be deposited
liabilities of the bank. Investment products

Provided: Obligation outside of the

Deposit accounts/transactions
Philippines shall not be a deposit for any
purposes of this act. And in case of banks
which are fictitious or
incorporated in the Philippines and it has fraudulent
branch outside the country, it will be
subject to Approval from the Board.
Deposit accounts/transactions
constituting unsafe and
Foreign Currency unsound banking practices
Deposits are also
insured by PDIC
pursuant to RA 6426
Deposits that are determined to
and Central Bank be the proceeds of an unlawful
Circular No. 1389 activity

Insured
Deposit and Insured Deposit

Extent of
The amount due to any bonafide
depositor for legitimate deposits in an
insured bank as of the date of closure

Liability not to exceed 500,000 php.

RA 9567
April 29, 2009 - The PDIC
propose to adjust the Maximum
Deposit Insurance Coverage.
June 01, 2009 - The start of the
effectivity of the proposal.
 Joint Accounts shall be insured separately from
Calculation any individually-owned deposit account:

of Liability
If the account is held jointly by 2 or more
natural persons, or by two or more juridical
entities - maximum insured deposit shall be
Per depositor, per capacity rule.
divided into as many equal shares as there are
Joint Accounts
individuals and juridical persons, unless
stipulated otherwise.
Insurance Risk If the account is held by a juridical person
Evaluation jointly with one or more natural persons -
The evaluation may include the maximum insured deposit shall be presumed to
determination of: belong entirely to such juridical person.
FMV of the assets and liabilities Note: The aggregate of the interest of each
of the bank co-owner over several joint accounts, shall
Risk Classification of a bank
likewise be subject to MIDC of 500,000 php.
Possible resolution modes
PROHIBITION

AGAINST

SPLITTING

OF

DEPOSITS
Penalty for Splitting of Deposits
General Rule:
Imprisonment not less than 6 years but not more than 12
years or a fine of not less than 50,000 pesos but not more
No court, except Court of Appeals,
than 10 million pesos or both at the discretion of the court shall issue TRO, preliminary
shall be imposed upon the any director, officer, employee or
agent of the bank for spitting of deposits or creation of injunction or Preliminary Mandatory
fictitious or fraudulent loans or deposit accounts.
Injunction against the Corporation
for any action under this act.

PROHIBITION
AGAINST Exemption: when the supreme court may

ISSUANCES
issue a restraining order or injunction
extreme urgency involving a

OF
constitutional issues such that
unless a temporary restraining order

TEMPORARY is issued

RESTRAINING
grave injustice
irreparable injury will arise

ORDERS
B O N D S
Shall file a Bond
in amount to be
Fixed by the
any restraining order or
Supreme Court
injunction issued in violation of
this section is void and if no
Shall accrue in favor
of the corporation if
force and effect and any judge
the court should who has each with the same
finally decide that the shall suffer the penalty of
applicants was not suspension of at least 60 days
entitled to the relief without pay
sought.
Violations
BANK
RESOLUTION
the term resolution refers to the action
undertaken by the corporation under section
11 of ra 2591 amended to
1. protect depositors creditors and the DIF failure a prompt
2. safeguard the continuity of essential corrective action as
banking services or maintain financial declared by the
stability monetary board
3. prevent deterioration or dissipation of
bank.
request by a bank to be
placed under resolution
Commencement of the
resolution of a bank
 Within the period of 180 days from a bank and
three into the solution the corporation through
the affirmative vote of at least five members of
the pdic board shall determine whether the bank
may be resolved

MODES OF 1
Through the purchase of all its asset and
RESOLUTION assumption of all its liabilities

2 Merger or consolidation with a qualified

investor or

3
Acquisition by qualified investor
 Factors to consider in determining the
appropriate method of resolution
1 3

fair market value of the asset of the

bank its franchise as well as the Least cost of the DIF
amount of its liabilities

2 4

Availability of a qualified investors Interest of the depositing public

ROLE OF PDIC IN The term takeover refers to the act
RELATION TO BANKS of physically taking possession and
control of the promises assets and
IN DISTRESS affairs of a closed bank for the
purpose of liquidating the bank

Upon the designation of the corporation as

receiver of the closed bank, it shall serve a
CLOSURE AND TAKEOVER notice of closure to the highest rank officer of
the bank present in the bank premises are in
the absence of the such officer, post the
notice of closure in the bank premises or on
its main entrance.
RECEIVERSHIP
Proceeding in Receiving and Liquidation under the NCBA

Unilateral Closure or has been

1 2 Has insufficient realizable assets
dormant for at least 60 days

Cannot continue in business without

3 Has willfully violated a cease and
involving probable losses 4
desist order

DESIGNATION OF PDIC AS RECEIVER

FOR THIS PURPOSE OF BANKS CLOSED BY THE MONETARY BOARD

SHALL NO LONGER BE REHABILITATED
Liquidation The receiver is authorized to

The term "liquidation" refers to the

process of winding up business adopt and implement any or a

affairs by settling corporate combination of the following

obligations or debts and modes of liquidation:

distributing the remaining
corporate assets through
liquidating dividends. Conventional liquidation
Purchase of assets and

Note: The consent of the assumption of liabilities

stockholders, board of directors,
creditors, or depositors of the
closed banks is not needed.
 Represent

Powers of the

Gather and take charge

Convert the assets

Corporation

Bring suits
Appoint or hire persons or entities in banking, finance
Appoint or hire persons or entities in forensic and fraud investigations

as receiver Pay accrued utilities, rentals, and salaries

Collects loans and other claims
Hire or retain private counsel
Borrow or obtain a loan, or mortgage, pledge
Exercise such power
Note: Any modifications or reductions shall apply only to earned and unpaid interest.
Utilize available funds
Note: For banks with insufficient funds, the Corporation is authorized to advance the

foregoing costs and expenses, and collect a payment, as and when funds become

available.
Charge reasonable fees
Distribute the available assets
Dispose records
Exercise such other powers
Effects of liquidation
The placement of a bank shall have the following effects:

On the corporate franchise or existence - to continue

Note: In no case shall the bank be reopened and permitted to resume banking business after
being placed under liquidation.
On the powers and functions of its directors, officers, and stockholders - terminated
On the assets - deemed in custodia legis
On the labor relations - deemed terminated
Contractual obligation - may be terminated by the receiver
On the interest payments - to cease upon closure
Liability for penalties and surcharges for late payment and nonpayment of taxes - no liability
Bank charges on services - may be imposed by the receiver
Actions pending for or against the closed bank - suspended, subject to exception
Final decisions against the closed bank - stayed
Docket and other court fees - deferred
Assets, records, and documents in possession of the closed

bank
The exercise of authority, functions, and duties by the

receiver
Even if administered by the receiver, the closed bank's assets

and documents must remain private.

 practicing your right to avail of the
insurance

CLAIMS

must be filed during the claims

settlement period, as announced
 WHO should claim

depositors of depositors with depositors who depositors who depositors not

valid accounts outstanding failed to update maintian eligible for early
of more than bank obligations address via accounts under payment, as
100,00 MAUF the name of determined by
business entity PDIC
 depositors of valid account
that has less than 100,000

NOT REQUIRED depositors without outstanding

to claim:
bank obligations

has updated personal

information via MAUF
 General Rule:
should be sign
by the depositor
who should Exceptions:
sign 1. Minor
2. for "by" accounts
3. for "in trust of or ITF
4. Joint accounts
period of filing the claim: period of enforcing the claim:

2 2
years from the years after filing
actual takeover the claim
of the bank
effects
of failure
barred from rights against
PDIC
to file
and/or
enforce Revocation of depositor rights

claim. against the closed bank

PDIC is dicharged from

liability
MODE OF 1 cash

PAYMENT 2 direct deposit in a new bank

Republic Act No. 3591

Philippine
Deposit
DATE

October

Insurance 05 2022

Corporation This presentation is

presented by students from
BSA-2C namely Besas,
PDIC LAW Cabigao, De Guzman,
Nantes, and Sales.