Prelim - RFBT 4

• Role of PDIC (Philippine Deposit Insurance Corporation):
• Deposit insurer
• Co-regulator of banks, empowered to examine and investigate banks
• Receiver and liquidator of closed banks, controlling, managing, and administering their affairs
• Closed banks by the Monetary Board shall not be rehabilitated
• Promotes and safeguards the interests of the depositing public by providing permanent insurance coverage on all insured deposits
• Entitled to the free use of Philippine mail
• Adopt and use a corporate seal
• Have succession until dissolved by an Act of Congress
• Make contracts
• Sue and be sued, complain and defend in any court of law in the Philippines
• Appoint officers and employees, define their duties, and make dismissals
• Prescribe by-laws regulating its general business conduct
• Exercise powers granted by the Act and necessary incidental powers
• Make examinations, require information and reports from banks
• Chairman: Secretary of the Department of Finance
• Member: Governor of the Bangko Sentral ng Pilipinas
• President of PDIC, appointed by the President of the Philippines
• Two members from the private sector, appointed by the President for a term of six years
• Presence of three members constitutes a quorum
• Decisions require concurrence of at least three members
• Designated representatives of the finance secretary and governor of the BSP may attend meetings and vote on behalf of their principals
• President acts as chairman in the absence of the Board Chairman
• Banks or banking institutions engaged in receiving deposits may insure their deposit liabilities with PDIC
• Factors considered for insuring banks include financial history, capital structure, earning prospects, management, community needs, and corporate powers
• Insurance coverage includes all deposit liabilities of insured banks
• Insured deposits are up to Five hundred thousand pesos per legitimate depositor
• Coverage includes all deposits in the bank maintained in the same right and capacity for the depositor's benefit
• Joint accounts are insured separately from individually-owned accounts
• Certain deposit accounts are not covered, such as investment products, fictitious or fraudulent accounts, unsafe and unsound banking practices, and proceeds of unlawful activities
• Insured deposits on closed banks are paid by PDIC either in cash or by transferring to another insured bank
• Proof of claims may be required before payment
• Final determination by a court may be needed for disputed claims
• If the Corporation is not satisfied with the validity of a claim for an insured deposit, it may require a final determination by a court of competent jurisdiction before paying the claim
• Failure to settle a claim for insured deposit within six months from the date of filing, due to grave abuse of discretion, gross negligence, bad faith, or malice, can lead to imprisonment for the directors, officers, or employees responsible for the delay
• PDIC acts as a receiver for closed banks in the Philippines
• The receiver is responsible for taking charge of the assets and liabilities of a closed bank, gathering, preserving, and administering them for the benefit of depositors and creditors, and continuing into liquidation when authorized by law
• The receiver is authorized to adopt and implement modes of liquidation without the need for consent from stakeholders, such as conventional liquidation and purchase of assets and/or assumption of liabilities
• The Corporation, as a receiver of a closed bank, has various powers including representing the closed bank, gathering assets, converting assets to cash, bringing suits to enforce liabilities, appointing competent individuals, paying accrued expenses, collecting loans, and hiring necessary counsel
• Upon placement of a bank under liquidation, it continues as a corporate body until the winding-up period ends, and the powers and functions of directors, officers, and stockholders are terminated