PDIC LAW (RA 3591, As amended)
functions.
What is PDIC?
PDIC is a government instrumentality created in
1963 by virtue of Republic Act 3591 to insure
the deposits of all banks which are entitled to
the benefits of insurance. The latest
amendments to RA 3591 are contained in RA
10846 signed into law on May 23, 2016. RA
10846 empowered PDIC with stronger
authorities to protect the depositing public and
promote financial stability. The new law also
includes important provisions to ensure that the
PDIC remains financially and institutionally
strong to fulfill its mandate under its Charter.
The PDIC now has the authority to help
depositors have quicker access to their insured
deposits should their bank close; resolve
problem banks while still open; hasten the
liquidation process for closed banks; and mete
out stiffer sanctions and penalties against those
who engage in unsafe and unsound banking
practices
The PDIC is an attached agency of the
Department of Finance.
Declared Policy of the State in relation to
insurance deposit coverage
It is the declared policy of the State to
strengthen the mandate of deposit insurance
coverage system to generate, preserve,
maintain faith and confidence in the country’s
banking system and protect from illegal
schemes and machinations.
What is PDIC’s overall mandate?
PDIC exists to provide deposit insurance
coverage for the depositing public to help
promote public confidence and stability in the
economy. It ensures prompt payment of
insured deposits, exercises complementary
supervision of banks, adopts responsive
resolution methods, and applies efficient
management of receivership and liquidation
What are the principal powers and functions of
PDIC?
• Deposit Insurer
• Co-regulator of Banks
• Receiver and Liquidator of Closed Banks
Are all bank members of PDIC?
Membership of banks to PDIC is mandatory,
hence all operating banks are members of PDIC.
Insurance premium is paid by the banks not by
the depositors.
The bank is assessed ⅕ of 1% per annum of the
assessment base of the bank.
Maximum Deposit Insurance Coverage
“INSURED DEPOSIT” – means the amount due
to any bona fide depositor for legitimate
deposits in an insured bank net of any
obligation of the depositor to the insured bank
“as of the date of closure”, but NOT to exceed
Five Hundred Thousand Pesos (P500,000.00).
When does the liability of PDIC to
depositors attach?
Upon the designation of the PDIC as receiver of
a closed bank, it shall serve a notice of closure
to the highest-ranking officer of the bank
present in the bank premises, or in the absence
of such officer, post the notice of closure in the
bank premises or on its main entrance.
The closure of the bank shall be deemed
effective upon the service of the notice closure.
Thereafter, the receiver shall take over the bank
and exercise the powers of the receiver as
provided under the PDIC charter.
PDIC can only be liable if the insured bank
actually receives deposit and the bank is
ordered closed by BSP.
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, or
issued in accordance with Bangko Sentral rules
and regulations.
When does PDIC commence determination of
insured deposits?
PDIC shall commence the determination of
insured deposits due 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 them by whatever means deemed
appropriate by the Board of Directors: Provided,
that 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 or communities where the
closed bank or its branches are located.
PDIC shall NOT pay deposit insurance for
the following accounts or transactions:
1. INVESTMENT PRODUCTS such as bonds
and securities, trust accounts, and other
similar instruments;
2. Deposit accounts or transactions which
are FICTITIOUS or FRAUDULENT as
determined by the Corporation;
3. 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; and
4. Deposits that are determined to be the
proceeds of an UNLAWFUL ACTIVITY as
defined under Republic Act No. 9160, as
amended. (AMLA Law)
Extent of Liability
X is a depositor of AAA Bank. She has three
(3) deposit accounts all under her name.
One, in checking account, one in saving
account and another one in time deposit
account. Each account has a balance of
Php250,000. AAA Bank became insolvent.
Philippine Deposit Insurance Corporation
closed the Bank. X therefore is unable to
withdraw from all of the accounts. She then
filed her claims with the Philippine Deposit
Insurance Corporation. Which statement is
most accurate?
A. X can claim a total of Php500,000
for all the three (3) accounts.
B. X can only claim from one (1)
account of Php250,000.
C. X can claim a total of Php750,000
from all the three (3) accounts.
D. X cannot claim anything from any of
the deposit accounts.
Rules on determination of insured deposits
and on calculation of liability
1. Deduct any loan of the depositor from the
amount of his deposit with the insured bank
to determine the net insured deposit.
2. Individually-owned deposit account is
insured separately from joint accounts
regardless of whether the conjunction
“and,” “or” “and/or” is issued. In
determining such amount due to the
depositor, there shall be added together all
deposits in the bank maintained in the same
right and capacity for his benefit either in
his own name or in the name of others.
3. Insurance coverage is per depositor not per
account. The type of account is immaterial.
account and another P500,000 for his
aggregate interest over various joint
accounts
8. For ITF account, like Juan in trust for Maria,
while the owner of the account is Juan,
Maria, the beneficiary is the one entitled to
claim the insurance deposit.
9. Deposits in other banks are insured
separately.
Example:
A has the following accounts with DEF Bank. The
Bank was subsequently closed by BSP for
insolvency. How much can Yoongi recover from
PDIC?
Php500,000 - Savings

4. If the account is held jointly by two or more Php500,000 - Current

natural persons or two or more juridical
Php500,000 - Trust Fund
entities, the maximum insured deposit shall
be divided into as many equal shares as Php500,000 - Time deposit
there are many individuals or juridical
A has a Php100000 loan with DEF Bank
entities, unless a different sharing is
stipulated in the deposit document. A may recover Php500,000 from PDIC.
5. If the account is held by a juridical person Example:
jointly with a natural person, the maximum
insured deposit shall be presumed to How much can A recover from PDIC is he has
belong entirely to the juridical person. The the following joint accounts on top of his
presumption can be overcome by evidence individual accounts?
to the contrary, like a written stipulation Php500,000 Savings
that the deposit belongs to the natural Php500,000 Current
person. Php500,000 Trust Fund
Php500,000 Time Deposit
6. The aggregate of the interests of each co-
owner over several joint accounts, whether
owned by the same or different Php500,000 A and/or B
Php500,000 A and/or C
combination of individuals, juridical persons
Php500,000 A and/or D
or entities shall likewise be subject to the
maximum insured deposit of P500,000.
Php500,000 For Joint Accounts
7. The maximum amount then that a B Php250,000
depositor may claim from PDIC is C Php250,000
P1,000,000, P500,000 for his individual D Php250,000
Example:

Php500,000 Savings Failure by PDIC to settle claim of insured

Php500,000 Current
depositor
Php500,000 Trust Fund
Php500,000 Time Deposit The failure to settle the claim within 6 months
from date of filing of the claim for insured
Php1,000,000 A and/or ABC deposit whether such failure was due to grave
Php500,000 A and/or B abuse of discretion, gross negligence, bad faith
or malice, shall upon conviction, subject the
directors, officers or employees of PDIC
Php500,000 ABC
A Php250,000 responsible for the delay.(imprisonment 6
B Php250,000 months to 1 year)

Provided, that the period shall not apply if

What is the mode of payment by PDIC? validity of the claim requires the resolution of
issues of facts and/or law by PDIC or another
Whenever an insured bank shall have been
office, subject further to the remedy of PDIC to
closed by the BSP, payment of the insured
require final determination of a court of
deposits shall be made by PDIC as soon as
competent jurisdiction if PDIC is not satisfied as
possible either by 1) cash or 2) making available
to the viability of the claim for insured deposit.
to each depositor a transferred deposit in
another insured bank in an amount equal to Failure of depositor to claim insured deposits
insured deposit of such depositor, subject to
submission of proof of claims. Unless otherwise waived by PDIC, if the
depositor in the closed bank shall fail to claim his
Effect of payment of insured insured deposit with PDIC within two years from
deposit/preference of credit actual takeover of the closed bank or does not
enforce his claim filed with PDIC within two
PDIC, upon the payment of any depositor, shall
years after the two year period to file a claim, all
be subrogated to all the rights of the depositor
rights of the depositor against the PDIC with
against the closed bank to the extent of such
respect to the insured deposit shall be barred;
payment. Subrogation shall include the right on
however, all rights of the depositor against the
the part of PDIC to receive the same dividends
closed bank and its shareholders or the
from the proceeds of the assets of such closed
receivership estate to which the PDIC may have
bank and recoveries on account of stockholders’
become subrogated shall thereupon revert to
equity as would have been payable to the
the depositor.
depositor on a claim for the insured deposit but
such depositor shall retain his claim for any
uninsured portion of his deposit.
Filing of claims with PDIC
For account holders with a total deposit amount
of not more than PI00,000, there is an automatic
payment by mail. PDIC sends the check to by
mail, in cooperation with the Philippine Postal
Office. Provided that they:
1. have no obligations with the closed bank, or
have not acted as co-makers of these
obligations, or are not spouses of the
borrowers;
2. have complete mailing address found in the
bank records or have updated their
addresses through the Mailing Address
Update Form (MAUF) of PDIC before the
start of the onsite claims settlement
operation; and
3. have not maintained the account under the
name of business entities
For account holders of more than PhP100,000,
claims must be filed during the onsite Claims
Settlement Operations (CSO) period, as
announced in the Notice to Depositors
published in national or local newspapers, or
posted in the bank premises and conspicuous
places within the locality, and in the PDIC
website. Depositor who failed to file their claims
during the onsite CSO may do so personally or
through mail by sending a duly accomplished
and notarized Claim Form
Requirements in filing claims
1. ORIGINAL EVIDENCE OF DEPOSITS
2. VALID ORIGINAL PHOTO-BEARING
IDENTIFICATION DOCUMENT (ID) with clear
signature of depositor/claimant
3. BIRTH CERTIFICATE, if depositor is below 18
AND VALID ID OF PARENT
4. NOTARIZED SPA for claimants who are not
the signatories in the bank records
Examination of banks and deposit accounts
PDIC may conduct examination of banks with
prior approval of the MB provided that no
examination can be conducted within 12 months
from the last examination date; provided
however that PDIC may, in coordination with
BSP conduct a special examination if there is a
threatened or impending closure of a bank.
Notwithstanding RA 1405, RA 8791, RA 6426 and
other laws, PDIC and/or BSP may inquire into or
examine deposit accounts and all information
related thereto in case there is a finding of
unsafe and unsound banking practice.
Splitting of Deposits
when a deposit account with an outstanding
balance of more than P500,000 under the
name of persons is BROKEN DOWN and
transferred to two or more accounts in the
name of persons or entities who have NO
BENEFICIAL OWNERSHIP in the transferred
deposit in their names WITHIN 120-DAYS
immediately preceding or during a bank-
declared bank holiday or 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.
The penalty of prision mayor or a fine of not
less than Fifty thousand pesos (P50,000.00)
but not more than Two million pesos
(P2,000,000.00), or both, at the discretion of
the court, shall be imposed upon any
director, officer, employee or agent of a
bank
Prohibition against issuance of TRO
GR: The actions of PDIC with respect to
determination of insured deposit accounts
shall be final and executory and may not be
set aside or restrained by the court.
XPN: On petition for certiorari on the
ground that the action was taken in excess
of jurisdiction or with grave abuse of
discretion as to amount to lack of or excess
of jurisdiction
No court, except the Court of Appeals shall
issue any temporary restraining order,
preliminary injunction, or preliminary
mandatory injunction against PDIC for any
action on its part under the PDIC Charter.