Secrecy of Bank Deposits Flashcards
(42 cards)
The purposes of RA 1405 are:
- Encourage deposit in banking institutions; and
- Discourage private hoarding so that banks may lend such funds and assist in the economic development of the country.
Prohibited Acts and Persons Liable are:
- Any person, including government officials or any government bureau or office - to examines, inquires, or looks into a bank deposit or government bond investment in any of the instances not allowed under the law.
2.Any person, including official employee of a banking institution - to disclose concerning bank deposit to another (any person other than a bank director, official or employe authorized by the bank) in any instance not allowed by law.
3.Any person who commits a violation of any of the provisions of the law.
Acts not covered by the prohibition
Non-bank official or employee is not covered by the prohibition.
> Neither is disclosure by a bank official or employee of information about bank deposit in favor of a co-employee in the course of the performance of his duties covered by the prohibition.
Manosa, a newspaper columnist, while making a deposit in a bank, overheard a pretty bank teller informing a co-employee that Gigi, a well-known public official, has just a few hundred pesos in her bank account and that her check will in all probability bounce. Manosa wrote this information in his newspaper column. Thus, Gigi filed a complaint with the City Fiscal of Manila for unlawfully disclosing information about her bank account.
Will the said suit prosper?
NO.
The suit will not prosper. It is clear as provided in section 3 of R.A. 1405 that it shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned in section two of the said law any information concerning said deposits. Manosa, as a columnist, is not one of those persons contemplated under the law. Furthermore, he merely overheard what appeared to be a vague remark of the bank teller therefore is not in a sense an inquiry or a disclosure
Supposing that Gigi is charged with unlawfully acquiring wealth under R.A. 1379 and that the fiscal issued a subpoena duces tecum for the records of the bank account of Gigi. May Gigi validly oppose the said issuance on the ground that the same violated the law on secrecy of bank deposits?
NO
> Gigi cannot oppose the said issuance because the law provides as an exception from the coverage of R.A. 1405 that UPON ORDER OF COMPETENT COURT in cases of ANTI-GRAFT and CORRUPTION cases, the examination of the deposits may be allowed.
Subpoena duces tecum meaning
Legal order that tells someone to bring documents or records to court or to a legal proceeding.
Deposits discovered
- All deposits of whatever nature with banks or banking institutions found in the Philippines.
- Investments in bonds issued by the Philippine government, its branches, and institutions
- Trust accounts
Meaning of the phrase “of whatever nature and kind”
> The law now includes not just traditional deposits under creditor-debtor relationships but any funds the bank can use for authorized loans.
> “Deposits” include all types of funds, such as trust accounts, not just standard savings or checking accounts.
Purpose of Including Trust Accounts
Trust funds are protected under R.A. 1405 to encourage investment through banks and discourage private hoarding of money.
Even though trust funds are considered deposits under R.A. 1405, they are not insured by PDIC (Philippine Deposit Insurance Corporation).
Confidentiality granted by RA 1405 does NOT extend to?
Letters of Credit and Trust Receipts
The confidentiality granted by the law > does NOT extend to?
Other documents and records like L/C’s, TR’s, bank drafts and promissory notes
Exceptions to the Confidentiality:
(next slides)
- When there is a written permission of the depositor or investor.
- In cases of impeachment: President, Vice Preside, Members of the Supreme Court, Members of the Constitutional Commission, Ombudsman
- Upon order of a competent court in the case of:
> Bribery or dereliction of duty of public officials
Where money deposited or invested is the subject of litigation
Involving unexplained wealth
- Upon inquiry by the Commission of BIR
- In cases of violation of the Anti-Money Laundering Act
- Reports:
> Disclosure to the Treasurer of the Philippines for unclaimed balances.
> Report of banks to AMLC of covered and/or suspicious transactions.
- The Ombudsman
(Is a government official who investigates and prosecutes public officials accused of wrongdoing, especially corruption)
- Without court order: If the AMLC determines that a particular deposit or investment with any banking institution is related to the following: Hijacking, Kidnapping, Murder, Destructive Arson, and Violation of the Dangerous Drugs Act, Acts of Terrorism or in violation of Human Security Act
- Examinations by the BSP, PDIC, and PCGG.
- Examination of independent auditor - conduct regular audit hired by bank
General rule of Foreign Currency Deposits
Foreign currency deposits cannot be inquired or looked into. All foreign currency deposits are absolutely confidential
