BANK SECRECY LAWS

Question 1

Which of the following is declared to be the policy of the Government under Republic Act No. 1405 a.k.a. Philippine Peso Deposit Secrecy Law?
I. To give encouragement to the people to deposit their money in banking institutions
II. To discourage private hoarding
a. Only Statement I
b. Only Statement II
c. Both Statements I and II
d. Neither Statements I nor II

Question 2

They refer to money or funds place with a bank that can be withdrawn on the depositor’s order or demand
a. Deposits
b. Trust funds
c. Money market placements
d. Deposit substitutes

Question 3

All deposits of whatever nature with banks or banking institutions in the Philippines may not be examined, inquired or looked into by any person, government official, bureau or office except
a. Upon written permission of the depositor
b. In cases of impeachment
c. Upon order of a competent court in cases of bribery or dereliction of duty of public officials
d. All of the above

Question 4

Which act is covered by Republic Act No. 1405 a.k.a. Philippine Peso Deposit Secrecy Law?
a. Disclosing the amount of deposit of a judgment debtor to the court sheriff who is executing a garnishment order against him
b. Disclosing the name of the drawer of a check to the payee
c. Disclosing the amount of deposit of a taxpayer to a duly authorized BIR examiner who is examining his income tax liability
d. Disclosing the amount of deposit exceeding P500,000 in one banking day to Anti-Money Laundering Council

Question 5

Under Republic Act No. 1405, what is the nature of bank deposit and investment in government bonds?
a. As a general rule, they are absolutely confidential in nature
b. As a general rule, they are generally subject to any type of inspection
c. They are exempted from any type of inquiry
d. None of the above

Question 6

Under Republic Act No. 1405, the following instruments are considered absolutely confidential in nature, except
a. Savings deposit
b. Time Deposit
c. Current Account or Demand Account
d. Money market placement or Telegraphic
Notes or Telegram notes

Question 7

Which of the following inquiries will be considered a violation of Philippine Peso deposit secrecy law?
a. Periodic inquiry or special examination of bank deposits by BSP to ensure compliance with Anti-Money Laundering Law
b. Inquiry of bank deposits by DOJ Secretary for the purpose of persecution of the members of the opposing political party.
c. Inquiry of bank deposits by BIR Commissioner in relation to an application for compromise of taxable liability or determination of a decedent’s gross estate under National Internal Revenue Code
d. Inquiry or bank deposits by PDIC when there is finding of unsafe or unsound banking practices

Question 8

Which of the following disclosures will be considered a violation of Philippine peso deposit secrecy law?
a. Turn-over by authorized bank officials to the BIR Commissioner of the amount in bank accounts as may be sufficient to satisfy the writ of garnishment issued to collect delinquent taxes
b. Reporting of unclaimed balances of a bank deposit to the Treasurer of the Philippines or Bureau of Treasury by authorized bank officials
c. Disclosure by a bank officer or employee upon order of a competent court in connection with a deposit in a closed bank that was used in the perpetration of anomalies
d. Using of insider information about the bank deposits by bank employees in order to determine the credit rating or credit standing of their depositors for purpose of offering credit cards

Question 9

Which type of a bank deposit of impeachable officer may be examined by impeachment court without consent of the impeachable officer?
a. Philippine Peso Bank Deposit
b. Foreign Currency Bank Deposit
c. Both A and B
d. Neither A nor B

Question 10

As a general rule, which type of bank deposit may not be subject to attachment, execution or garnishment?
a. Philippine Peso Bank Deposit
b. Foreign Currency Bank Deposit
c. Both A and B
d. Neither A nor B

Question 11

The following are the exceptional cases when the BIR Commissioner may inspect bank deposits, except
a. When there is application of compromise liability by a taxpayer on the ground of financial incapacity
b. To determine the gross estate for computation of estate tax’s liability
c. When a request for tax information of specific taxpayers made by a foreign tax authority pursuant to a tax treaty under The Exchange of Information on Tax Matter Act of 2009
d. To determine the taxable income of politicians

Question 12

What is the penalty provided by law for violation of Republic Act No. 1405 a.k.a. Philippine Peso Deposit Secrecy Law?
a. Imprisonment of not more than five years or fine of not more than P20,000 or both imprisonment and fine
b. Imprisonment of not more than ten years or fine of not more than P200,000 or both imprisonment and fine
c. Imprisonment of not more than twenty years or fine of not more than P2,000,000 or both imprisonment and fine
d. Imprisonment of not more than twenty years or fine of not more than P2,000 or both imprisonment and fine

Question 13

Under Foreign Currency Deposit Act of the Philippines or R.A. No. 6426, what is the only exception for the absolutely confidential nature of Foreign Currency Bank Deposits?
a. Upon written permission or consent in writing by the depositor
b. In cases of impeachment of the President, Vice-President, members of the Supreme Court, members of the Constitutional Commission (Commission on Elections, Civil Service Commission and Commission on Audit) and the Ombudsman for culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes or betrayal of public trust. (Art. XI, Sec. 2, 1987 Philippine Constitution)
c. Upon order of a competent court in cases of bribery or dereliction of duty of public officials
d. In cases where the money deposited or invested is the subject matter of the litigation

Question 14

Which is false about Foreign Currency Deposit Act also known as R.A. No. 6426?
a. The foreign currency deposits maintained abroad by Filipino citizens are not covered by the provisions of this act
b. Depository banks which have been qualified by the Monetary Board to function under expanded foreign currency deposit system are exempt in maintaining the fifteen percent (15%) foreign currency cover for their liabilities in the form of foreign currency deposit with BSP
c. Foreign currency deposits are of absolutely confidential nature, except upon the written permission of the depositor
d. Foreign currency deposits are subject to attachment, garnishment, or any other order or process of the court

Question 15

What is the penalty provided by R.A. No. 6426 for violation of confidentiality of foreign currency deposit act of the Philippines?
a. Imprisonment of not less than 1 year nor more than 5 years or fine not less than P5,000 but not more than P25,000 or both imprisonment and fine
b. Imprisonment of not less than 2 years nor more than 10 years or fine not less than P10,000 but not more than P50,000 or both imprisonment and fine
c. Imprisonment of not less than 3 years nor more than 15 years or fine not less than P20,000 but not more than P100,000 or both imprisonment and fine
d. Imprisonment of not less than 4 year nor more than 20 years or fine not less than P50,000 but not more than P500,000 or both imprisonment and fine

Question 16

Statement I: It shall be unlawful for any official or employee of a banking institution to disclose to any person any information concerning deposits
Statement II: The Secrecy of Bank Deposit Account does not prohibit attachment or garnishment of bank accounts, which does not involve revealing specific information of deposits
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 17

S, a reporter, while having a bank transaction, overheard a bank teller informing a co-employee that B, the municipal mayor, has just P10,000 in his bank account and that his next check might probably bounce. S included this information in his newspaper report. Thus, B filed a complaint against S for violation of the Secrecy of Bank Deposits Act. Decide
a. S is liable because bank deposits are absolutely confidential
b. S is not liable because he was in good faith when he overheard the remark of the bank teller to a co-employee
c. S is liable because bank deposits must not be examined, inquired or looked into by any person
d. S, who merely overheard the remark of the bank teller to a co-employee and writing the same in his newspaper report is neither the inquiry nor disclosure contemplated by law

Question 18

P is unemployed; however, he is suspected to be a drug lord. P has never been charged or convicted of any crime. He has several bank accounts and purchased several houses and lots from B amounting to P100,000,000. After that, the Register of Deeds reported his purchases to the Anti-Money Laundering Council (AMLC). Upon request of the AMLC, Sea Bank disclosed to it P’s bank deposits. Subsequently, P was charged in court for violation of the Anti-Money Laundering Law. Did Sea Bank violate the Secrecy of Bank Deposit Act in disclosing P’s bank account to the AMLC?
a. No. Sea Bank did not violate the Secrecy of Bank Deposit Act because it is one of the obligation of banks to disclose bank accounts if public interest requires it
b. Yes. Sea Bank violated the Secrecy of Bank Deposit Act since it is absolutely prohibited from disclosing bank accounts
c. Yes. Sea Bank violated the Secrecy of Bank Deposit Act since it can disclose bank accounts only upon the request of the Supreme Court
d. No. Sea Bank did not violate the Secrecy of Bank Deposit Act. A bank is obliged to report to the AMLC covered and suspicious transactions

Question 19

Under Republic Act No. 1405 a.k.a. Philippine Peso Deposit Secrecy Law, the bank deposits and investment in government bonds may be inquired into in the following exceptional instances, except
a. Upon written permission or consent in writing by the depositor
b. In cases of impeachment of the President, Vice President, members of the Supreme Court, members of the Constitutional Commission (Commission on Elections, Civil Service Commission and Commission on Audit) and the Ombudsman for culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes or betrayal of public trust (Art. XI, Sec. 2, 1987 Philippine Constitution)
c. Upon order of a competent court in cases of bribery or dereliction of duty of public officials
d. In cases of tax evasion cases filed by BIR Commissioner against a taxpayer

Question 20

S is the creditor of B. Upon demand, B failed to pay S; thus, the latter filed a case against the former. B had a savings account with Sea Bank. Subsequently, the court ordered that B’s account be garnished the amount of P100,000 to satisfy the judgment in favor of S. B complained that the garnishment violated the Secrecy of Bank Deposit Act. Decide
a. B is correct because in the process of garnishment, the information about his savings account is divulge to the public
b. B is correct because the Bank Secrecy Law protects the disclosure of the existence of bank accounts of depositors
c. B is not correct because peso deposits may be garnished, and Sea Bank can comply with the order of garnishment without violating the Secrecy of Bank Deposit Act
d. B complaint is meritorious because peso deposits may not be garnished