PHILIPPINE DEPOSIT INSURANCE CORPORATION LAW

Question 1

What is the 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 and considered as an attached agency of the Department of Finance?
a. Development Bank of the Philippines (DBP)
b. Landbank of the Philippines (LBP)
c. Philippine Deposit Insurance Corporation (PDIC)
d. Bangko Sentral ng Pilipinas (BSP)

Question 2

The following are the composition of the board of directors of the Philippine Deposit Insurance Corporation (PDIC) except
a. Secretary of Finance
b. President of the PDIC, who shall be appointed by the President of the Philippines
c. Four (4) members from the private sector to be appointed by the President of the Philippines
d. None of the above

Question 3

The following are the qualifications of the board of directors of the PDIC except
a. Good moral character
b. Unquestionable integrity and responsibility
c. Recognized competence in economics, banking and finance law, management administration or insurance
d. At least 45 years old

Question 4

Which of the following is not a function of the PDIC?
a. Insurance
b. Corporate rehabilitation
c. Receivership of closed banks
d. Bank examination

Question 5

It 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, evidenced by a passbook, certificate of deposit, or other evidence of deposit issued in accordance with Bangko Sentral ng Pilipinas rules and regulations and other applicable laws, together with such other obligations of a bank
a. Insured deposit
b. Insured bank
c. Disputed claim
d. Deposit

Question 6

Which of the following deposits is not insured by PDIC?
a. Savings Deposit
b. Special Savings
c. Telegraphic notes or Telegram notes
d. Negotiable Order of Withdrawal

Question 7

Which of the following is insured by PDIC?
a. Investment in bonds issued by government
b. Investment in stocks of a private corporation
c. Trust account
d. Demand or Checking account

Question 8

Which of the following deposits is not insured by PDIC?
a. Certificate of Time Deposit in Philippine National Bank Makati Branch
b. Bank Deposit in Japan Bank Tokyo Branch
c. Savings Deposit in Metrobank Manila Branch
d. Special Savings in Bank of Philippine Islands Taguig Branch

Question 9

Which of the following deposits is insured by PDIC?
a. Investment products which do not fall under the definition of a deposit
b. Deposit accounts that are fictitious or fraudulent
c. Deposit accounts constituting or emanating from unsafe or unsound business practices
d. Deposit accounts that are determined to be proceeds from an unlawful activity as defined in AMLA
e. None of the above

Question 10

Statement I: The Philippine Deposit Insurance Corporation (PDIC) shall insure the deposits of all banks
Statement II: The PDIC shall promote and safeguard the interests of the depositing public by providing insurance coverage on all insured deposits and helping maintain a sound and stable banking system
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 11

It means the amount due to any bonafide depositor for legitimate deposits in an insured bank as of the date of closure but not to exceed P500,000
a. Insured bank
b. Insured deposit
c. Disputed claim
d. Deposit

Question 12

Statement I: A joint account regardless of whether the conjunction ‘and’, ‘or’, ‘and/or’ is used, shall be insured separately from any individually-owned deposit account
Statement II: That the aggregate of the interest of each co-owner over several joint accounts, whether owned by the same or different combinations of individuals, juridical persons or entities, shall likewise be subject to the maximum insured deposit of P500,000
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 13

Statement I: If the account is held jointly by two or more natural persons, or by two or more juridical persons or entities, the maximum insured deposit shall be divided into as many equal shares as there are individuals, juridical persons or entities, unless a different sharing is stipulated in the document of deposit
Statement II: If the account is held by a juridical person or entity jointly with one or more natural persons, the maximum insured deposit shall be presumed to belong entirely to such juridical person or entity
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 14

Statement I: Whenever upon examination by the PDIC into the condition of any insured bank, it shall be disclosed that an insured bank or its directors or agents have committed, are committing or about to commit unsafe or unsound practices in conducting the business of the bank, or have violated, are violating or about to violate any provisions of any law or regulation to which the insured bank is subject, the Board of Directors shall submit the report of the examination to the Monetary Board to secure corrective action thereon
Statement II: Each insured bank shall keep and maintain a true and accurate record or statement of its daily deposit transactions consistent with the standards set by the Bangko Sentral ng Pilipinas and the PDIC
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 15

Statement I: PDIC may require proof of claims to be filed before paying the insured deposits
Statement II: In any case, where PDIC is not satisfied as to the viability of a claim for an insured deposit, it may require final determination of a court of competent jurisdiction before paying such claim
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 16

Statement I: Whenever a bank is ordered closed by the Monetary Board, the PDIC shall be designated as receiver and it shall proceed with the takeover and liquidation of the closed bank
Statement II: The receiver is authorized to adopt and implement, without need of consent of the stockholders, board of directors, creditors or depositors of the closed bank, any or a combination of (1) conventional liquidation; and (2) purchase of assets and/or assumption of liabilities; as modes of liquidation
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 17

In addition to the powers of a receiver provided under the existing law, the PDIC, as receiver of a closed bank, is empowered to
a. Represent and act for and on behalf of the closed bank
b. Gather and take charge of all the assets, records and affairs of the closed bank, and administer the same for the benefit of its creditors
c. Convert the assets of the closed bank to cash or other forms of liquid assets
d. All of the above

Question 18

Statement I: 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
Statement II: The receiver shall have authority to use reasonable force, including the authority to force open the premises of the bank, and exercise such acts necessary to take actual physical possession and custody of the bank and all its assets, records, documents and take charge of its affairs upon the service of the notice of closure
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 19

Statement I: The receiver shall have the authority to facilitate and implement the purchase of the assets of the closed bank and the assumption of its liabilities by another insured bank, without need for approval of the liquidation court
Statement II: The assets gathered by the receiver shall be evaluated and verified as to their existence, ownership, condition and other factors to determine their realizable value
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 20

In the management and/or conversion of the assets of the closed bank, the receiver shall have the authority to
I. Conduct a physical or ocular inspection of the properties owned by, or mortgaged to, the closed bank, to determine their existence and present condition
II. Determine the disposal price of assets in accordance with generally accepted valuation principles, standards and practices
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 21

Statement I: The creditors shall have a period of nine (9) months from the date of publication of notice of the approval by the court of the final asset distribution plan of the closed bank within which to claim payment of the principal obligations and surplus dividends
Statement II: The individual stockholders of record or their duly-authorized representative or the court-appointed stockholders’ representative shall have a period of nine (9) months from publication of notice of the approval by the court of the final asset distribution plan of the closed bank within which to claim the residual assets
b. Only Statement I is true
c. Only Statement II is true
c. Both are true
d. Both are false

Question 22

Statement I: All payments by the PDIC of insured deposits in closed banks partake of the nature of public funds
Statement II: The PDIC, in its discretion, may require proof of claims to be filed before paying the insured deposits, and that in any case where the PDIC is not satisfied as to the validity of a claim from an insured deposit, it may require final determination of a court of competent jurisdiction before paying such claim
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

Question 23

It occurs whenever a deposit account with an outstanding balance of more than the statutory maximum amount of insured deposit maintained under the name of natural or juridical persons is broken down and transferred into 2 or more accounts in the name/s of natural or juridical persons or entities who have no beneficial ownership on transferred deposits in their names within 120 days immediately preceding or during a 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
a. Splitting of deposits
b. Division of deposits
c. Separation of deposits
d. Partition of deposits

Question 24

Under the amendment of PDIC Charter, may PDIC pay the insured deposits of a depositor without netting out depositor’s loan obligation with the closed bank?
a. Yes, but only using the closed bank’s records alone
b. Yes, even based on evidence of deposits and not on the closed bank’s recorded loan
c. No, because it will violate of the right to due process of the bank
d. No, because it will violate the principles of legal compensation

Question 25

May PDIC proceed directly to liquidation of a closed bank even without undergoing 90-day receivership period? a. Yes, because it would enhance the recovery rate for creditors of closed bank b. Yes, because it would result to further dissipation of assets of a closed bank c. No, because it is a violative right to property of the owners of the bank d. No, because it is violative of right to procedural due process of the owners of the bank

Question 26

What is the possible maximum deposit insurance coverage if a depositor has several valid single accounts in a closed bank? a. P1,000,000 b. P500,000 c. P750,000 d. P1,500,000

Question 27

What is the possible maximum deposit insurance coverage if a depositor has several valid single accounts and valid joint accounts in a closed bank? a. P1,000,000 b. P500,000 c. P750,000 d. P1,500,000

Question 28

X has the following deposit accounts in a closed bank (BPI): X and Y Savings Deposit – BPI-Quezon City Branch P600,000 X and B Time Deposit – BPI-Taguig City Branch P800,000 X and F Checking Account – BPI-Mandaluyong Branch P900,000 What is the maximum deposit insurance coverage by PDIC in so far as X is concerned? a. P1,000,000 b. P1,200,000 c. P500,000 d. P800,000

Question 29

X has the following deposit accounts in a closed bank (BPI): X Bakery Business (Sole Proprietorship) Checking Account – BPI-Mandaluyong Branch P300,000 X Savings Deposit – BPI-Taguig City Branch P400,000 X and Y Time Deposit – BPI-Pasig Branch P600,000 X and Z Savings Deposit – BPI-Quezon City Branch P800,000 What is the maximum deposit insurance coverage by PDIC in so far as X is concerned? a. P1,000,000 b. P1,200,000 c. P500,000 d. P800,000

Question 30

What is the prescriptive period for depositors to file their deposit insurance claims to PDIC from date of takeover by PDIC of a closed bank? a. Within 1 year from PDIC’s takeover of the closed bank b. Within 2 years from PDIC’s takeover of the closed bank c. Within 3 years from PDIC’s takeover of the closed bank d. Within 4 years from PDIC’s takeover of the closed bank

Question 31

As a general rule, what is the threshold amount of the bank deposit to be required to file deposit insurance claims to PDIC? a. Balance of more than P100 b. Balance of more than P1,000 c. Balance of more than P10,000 d. Balance of more than P100,000

Question 32

The following are the depositors who are required to file deposit insurance claims to PDIC in order to recover their claims from a closed bank, except a. Depositors who have outstanding obligations with the closed bank regardless of amount of deposits b. Depositors with account balances of less than P100,000 who have updated addresses in the bank records, or who have updated their addresses through the Mailing Address Update Form (MAUF) issued by the PDIC c. Depositors with account balances of less than P100,000 who have no updated addresses in the bank records or who have not updated their addresses through the Mailing Address Update Form (MAUF) issued by the PDIC d. Depositors with valid deposit accounts with balances of more than P100,000

Question 33

What is the mode of payment by PDIC of claims of depositors from a closed bank? a. By cash b. By making available to each depositor a transferred deposit in another insured bank in an amount equal to insured deposit of such depositor c. By checks, promissory note or bill of exchange d. Either A or B

Question 34

What is the maximum period for payment by PDIC to depositors of their claims from a closed bank in order not to make PDIC’s office liable for failure to pay due to grave abuse of discretion, gross negligence, bad faith or malice? a. Within 3 months from the date of filing of deposit insurance claim to PDIC b. Within 6 months from the date of filing of deposit insurance claim to PDIC c. Within 1 year from the date of filing of deposit insurance claim to PDIC d. Within 2 years from the date of filing of deposit insurance claim to PDIC

Question 35

What is the effect of payment by PDIC of insured deposits to depositors? a. PDIC may recover from the assets of the closed in so far as the payment made by PDIC is beneficial to depositors b. PDIC may not recover from the assets of the closed bank if the payment is without the knowledge or against the will of the closed bank c. PDIC shall be legally subrogated to all rights of depositor against the closed bank to the extent of such payment d. PDIC may only recover from the assets of the closed bank if the payment is with the consent of the closed bank