RFBT - PDIC LAW Flashcards Preview

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS > RFBT - PDIC LAW > Flashcards

Flashcards in RFBT - PDIC LAW Deck (39)
Loading flashcards...
1
Q

What is an insured deposit?

A

An insured deposit is 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 date of closure, but NOT TO EXCEED PHP 500,000.

2
Q

What are not covered by insurable deposit?

A
  1. ) Investments such as BONDS AND SECURITIES, TRUST ACCOUNTS, and other SIMILAR INSTRUMENTS.
  2. ) Deposit accounts or transactions which are UNFUNDED, FICTITIOUS, OR FRAUDULENT.
  3. ) Deposit accounts or transactions constituting, and or emanating from UNSAFE AND UNSOUND BANKING PRACTICES as determined by PDIC in consultation with BSP.
  4. ) Deposits that are determined to be the PROCEEDS OF AN UNLAWFUL ACTIVITY.
3
Q

What are Single accounts?

A

Singe accounts are accounts MAINTAINED SOLELY BY A DEPOSITOR, which also includes IN-TRUST-FOR and BY-ACCOUNTS.

4
Q

What is a Joint account?

A

A Joint Account is an account held jointly by two or more persons, either natural/juridical.

5
Q

What are the requirements for claiming insured deposits?

A
  1. ) Original evidence of deposits such as PASSBOOK, CERTIFICATE OF TIME DEPOSIT, BANK STATEMENT, UNUSED CHECKS, AND ATM CARDS.
  2. ) Original copy of TWO VALID PHOTO-BEARING IDS with CLEAR SIGNATURE OF THE DEPOSITOR.
  3. ) If DEPOSITOR IS BELOW 18, PHOTOCOPY OF BIRTH OF CERTIFICATE FROM NSO or DULY CERTIFIED COPY FROM THE LOCAL CIVIL REGISTRAR and VALID IDS of the parent.
  4. ) Original copy of a NOTARIZED SPECIAL POWER OF ATTORNEY for claimants who are not the signatories in the bank records. In the case of minor depositors, SPA must be executed by the parent.
6
Q

Where should the requirements for claiming insured deposits be submitted?

A

1.) If submitting personally”
PDIC representatives at Claims Settlement Operations or to PDIC Public Assistance Center.

2.) If filing through Mail
The accomplished and notarized Claim form and requirements to The claims processing department of PDIC.

7
Q

If the depositor’s account in a closed bank is more than PHP 500,000, what happens to the excess of the maximum amount of insured deposit?

A
  1. ) If the closed bank is NOT REHABILITATED OR TAKEN OVER BY ANOTHER BANK, the excess can still be claimed upon the FINAL LIQUIDATION OF THE REMAINING ASSETS OF THE CLOSED BANK.
  2. ) The claim may be FILED WITH THE LIQUIDATOR OF THE CLOSED BANK but payment of said claim will DEPEND ON THE BANK’S AVAILABLE ASSETS TO SETTLE ITS PREFERRED CLAIMS.
8
Q

What happens when the depositor of a closed bank fails to file his claim within the 24-month period?

A

All rights of the depositor with respect to the insured deposit shall no longer be honored. But he may still make a claim against the assets of the closed bank.

9
Q

What is the Philippine Deposit Insurance Corporation (PDIC)?

A

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.

10
Q

The PDIC is an attached agency of?

A

The PDIC is an attached agency of the Department of Finance.

11
Q

What are the functions of PDIC?

A
  • Deposit Insurer
  • Co-regulator of Banks
  • Receiver and Liquidator of Closed Banks
12
Q

Are deposits maintained in branches and subsidiaries of foreign banks operating in the Philippines insured by the PDIC?

A

Yes, the PDIC Charter provides that the deposits in branches and subsidiaries of foreign banks licensed by the Bangko Sentral ng Pilipinas (BSP) to perform banking functions in the Philippines are insured by the PDIC.

13
Q

Are deposits maintained in Philippine banks with branches outside the Philippines insured by the PDIC?

A

The PDIC Charter provides that a Philippine bank MAY ELECT to insure with the PDIC its deposits in branches outside the Philippines.

14
Q

What specific risks to a bank does PDIC cover?

A

PDIC covers only the RISK OF BANK CLOSURE ORDERED BY THE MONETARY BOARD. Thus, bank losses due to theft, fire, closure by reason of strike or existence of public disorder, revolution or civil war, are not covered by PDIC.

15
Q

Shall the depositor pay any insurance premium to PDIC?

A

No. Insurance premium is paid by the banks, not by the depositors. The bank is assessed 1/5 of 1% per annum OF THE ASSESSMENT BASE OF THE BANK.

16
Q

If I have deposits in several different insured banks, will my deposits be added together for insurance purposes?

A

No. Deposits in different banking institutions are insured separately. However, if a bank has one or more branches, the main office and all branch offices are considered as one bank. Thus, if you have deposits at the main office and at one or more branch offices of the same bank, the deposits are added together when determining deposit insurance coverage, the total of which shall not exceed P500,000.

17
Q

When should the depositor of a closed insured bank file his claim with PDIC?

A

The depositor of the closed insured bank has 24 months from date of bank takeover to file his deposit insurance claim.

If he fails to do so within 24 months, all rights of the depositor with respect to the insured deposit shall no longer be honored. But he may still make a claim against the assets of the closed bank.

18
Q

If the account is held by a juridical person and a natural person jointly, the maximum insured deposit shall be presumed to belong to?

A

It shall be presumed to belong entirely to the juridical person.

19
Q

What is the PDIC?

A

PDIC (created by RA 3591 as amended by RA 10846) is a government instrumentality created in 1963 by virtue of RA 3591 to INSURE THE DEPOSITS OF ALL BANKS WHICH ARE ENTITLED TO THE BENEFITS OF INSURANCE. IT IS AN ATTACHED AGENCY OF THE DEPARTMENT OF FINANCE.

20
Q

What law created the PDIC?

A

RA 3591, as amended by RA 10846 which was signed into law on May 23, 2016.

21
Q

Under RA 10846 amendment, what changes/improvements were introduced?

A
  1. Help depositors have quicker access to their insured deposits should their bank close
  2. Resolve bank problems while still open
  3. Hasten liquidation for closed banks
  4. Mete harsher sanctions for those engaging in unsound banking practices
22
Q

What are the insurable deposits under PDIC law?

A
  1. By deposit type
    a. Savings Deposit
    b. Special Savings
    c. Demand/Checking Account
    d. Negotiable order of withdrawal (NOW)
    e. Time Deposits
    f. Foreign Currency deposit
  2. By Deposit account
    a. Single account
    b. Joint account
    c. Accounts “in trust for (ITF)” of “For the account of (FAO)”
  3. By Currency
    a. PH Peso
    b. Foreign currencies as part of BSP’s International reserves
23
Q

What are the rules on Joint Accounts in relation to PDIC law?

A

A Joint Account shall be insured separately from any individually-owned deposit account

  1. A joint account regardless of whether the conjunction “and”, “or” or “and/or” is used shall be INSURED SEPARATELY FROM SINGLE ACCOUNTS.
  2. Unless a different sharing is stipulated in the deposit documents, the insured amount up to the Maximum Deposit Insurance Coverage of 500,000 shall be DIVIDED EQUALLY BETWEEN OR AMONG THE CO-OWNERS OF A JOINT ACCOUNT.
  3. The total shares of a co-owner in several joint accounts may exceed 500,000 but will only be insured up to 500,000
  4. Joint accounts held in the names of a juridical entity and a natural person shall be presumed to belong solely to the juridical entity.
24
Q

T or F
Joint accounts held in the names of a juridical entity and a natural person shall be presumed to belong solely to the natural person.

A

False, Joint accounts held in the names of a juridical entity and a natural person shall be presumed to belong solely to the JURIDICAL ENTITY.

25
Q

T or F
The new law (RA 10846) does away with the 90-day receivership period and allows the PDIC to proceed directly to liquidation. The immediate assignment of encumbered assets to closed bank creditors, adoption of purchase of assets and assumption of liabilities as a mode of liquidation, and the express prohibition on reopening of banks ordered closed by the Monetary Board of the BSP would help enhance the recovery rate of closed banks

A

True.

26
Q

T or F

An account “By”, “In trust for” and “For the account of” are joint accounts.

A

False, treated as single accounts.

27
Q

T or F

In a By account “Ana by Ben”, Ben is the depositor.

A

False, Ana is the depositor.

28
Q

T or F

In an ITF account “Ana in trust for Ben”, Ana is the depositor.

A

False, Ben is the depositor since it is in his trust.

29
Q

T or F

In a FAO account “Ana for the account of Ben”, Ana is the depositor.

A

False, Ben is the depositor since it is in his account.

30
Q

What items are not covered by the PDIC?

A
  1. Investment products such as bonds/securities/trust accounts
  2. Telegraphic notes
  3. Deposit accounts that are:
    a. Unfunded/fictitious/fraudulent
    b. Emanate from unsafe/unsound banking practices
    c. Determined to proceed from illegal activities
  4. Bank deposits in foreign banks operating outside PH
  5. Bank deposits in foreign branch of domestic bank operating outside PH.
31
Q

What are considered unsafe and unsound deposit-related activities?

A

PDIC issuance No 2011-01

a. Deposits without the approval or adequate controls required under existing laws, rules and regulations
b. Failure to keep bank records within bank premises
c. Granting high-interest rates when the bank has negative unimpaired capital or liquid assets to deposit ration less than 10%
d. Non-compliance with PDIC.

32
Q

T or F

A depositor with multiple single and joint accounts shall be insured up to 500,000 for each account.

A

False, a depositor with single and joint accounts may have insured deposits of up to Php 1,000,000 only.

33
Q

When are claims against PDIC filed?

A

Claims are filed during the CLAIMS SETTLEMENT OPERATIONS PERIOD as announced in national/local newspapers or posted in bank premises.

34
Q

T or F

Depositors have 5 years from PDIC’s takeover of the closed bank to file their deposit insurance claims.

A

False, Depositors have 2 YEARS (24 months) from PDIC’s takeover of the closed bank to file their deposit insurance claims.

35
Q

Who are required to file deposit insurance claims?

A
  1. Depositors w/ valid deposit accounts w/ balances OF MORE THAN 100,000
  2. Depositors who have OUTSTANDING OBLIGATIONS WITH THE CLOSED BANK REGARDLESS OF AMOUNT OF DEPOSIT
  3. Depositors who have NO UPDATED ADDRESSES IN THE BANK RECORDS or WHO HAVE NOT UPDATED THEIR ADDRESSES THROUGH THE MAILING ADDRESS UPDATE FORM issued by PDIC
  4. Depositors who maintain their accounts under the NAME OF BUSINESS ENTITIES REGARDLESS OF ACCOUNT TYPE AND BALANCE
  5. Depositors with accounts NOT ELIGIBLE FOR EARLY PAYMENT, regardless of account type and balance.
36
Q

T or F
Depositors not required to file deposit insurance claims are entitled to immediate/early payment of deposit insurance claims.

A

True. This is part of PDIC’s initiative to provide convenience to small depositors. Payments are sent as postal money orders.

37
Q

Who should sign the deposit insurance claim forms?

A

a. Depositor of the account - for depositors 18 and above
b. Parent - if depositor is below 18
c. Agent - in “By” accounts
d. Trustee - in ITF accounts
e. Each depositor - in joint accounts

38
Q

What are the procedures for claiming insurance proceeds?

A

a. Period of Payment
1 - Whenever an insured bank is closed by Monetary Board
2 - Payment shall be made by PDIC ASAP

b. Mode of Payment
1 - Cash
2 - Transferred deposit in another insured bank

c. Requirement before Payment
1 - Proof of claims
2 - Final determination by courts if PDIC is not satisfied w validity of claims

d. - Period of Payment
1 - Must be made within 6 months from the date of filing otherwise PDIC officers will be liable
2 - 6 month period shall not apply if documents of claimant are incomplete or requires resolution

e. Rights of PDIC upon payment of insured deposits
PDIC shall be legally subrogated to all rights of depositor against the closed bank to the extent of such payment.

39
Q

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 officers liable for failure to pay due to grave abuse of discretion/gross negligence/bad faith/malice>

A

Period of Payment
1 - Must be made within 6 months from the date of filing otherwise PDIC officers will be liable
2 - 6 month period shall not apply if documents of claimant are incomplete or requires resolution