PDIC

• PDIC


  Philippine Deposit Insurance Corporation
• PDIC Act

  RA 3591 as amended
• PDIC established

  1963
• Primary functions of PDIC

  • Deposit insurer - provide permanent and continuing insurance coverage on all insured deposits
  • Co-regulator of banks - empowered to examine and investigate banks
  • Receiver and liquidator of closed banks - control, manage and administer the affairs of the closed bank
• Insured deposits


  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 the date of closure, but not to exceed P500,000
• Adjustment of maximum deposit insurance

  1. Monetary Board determines condition that threatens monetary and financial stability

  2. Unanimous vote of PDIC Board of Directors

  3. Approval of President of the Philippines
• Systemic risk


  • Possibility of failure of one bank to settle net transactions with other banks will trigger a chain reaction, depriving other banks of funds leading to a general shutdown of normal clearing and settlement activity
  • Likelihood of a sudden, unexpected collapse of confidence in a significant portion of the banking or financial system with potentially large real economic effects
• Deposit accounts NOT ENTITLED to payment

  • Investment products such as bonds and securities, trust accounts and other similar instruments
  • Deposit accounts or transactions which are unfunded and that are fictitious or fraudulent
  • Deposit accounts or transactions constituting and/or emanating from unsafe and unsound banking practices
  • Deposits that are determined to be the proceeds of an unlawful activity
  • Deposits payable in a place outside the Philippines
  • Money placements by the head office of a foreign bank in its branch in the Philippines
  • Deposit products that resulted from splitting of deposit
• SPLITTING OF DEPOSIT


  1. It occurs whenever a deposit account with an outstanding balance of more than P500,000 under the name of a person is broken down and transferred to two or more accounts in the name of persons or entities who have no beneficial ownership in the transferred deposits in their names

  2. Within 120 days immediately preceding or during a bank-declared bank holiday or immediately preceding a closure order issued by the Monetary Board for the purpose of availing the maximum deposit insurance coverage
• This is considered a criminal act punishable by imprisonment of not less than 6 years but not more than 12 years or a fine not less than P50,000 but not more than P10,000,000, or both, at the discretion of the court.
• Per Depositor, Per Capacity Rule


  All deposits in the bank maintained in the same right and capacity for his benefit either in his own name or in the name of others shall be added together in determining the insured amount.
• "By"


  Juan is the depositor (Juan by Pedro)
• "In Trust For (ITF)"


  Pedro is the depositor (Juan ITF Pedro)
• "For the Account of (FAO)"


  Pedro is the depositor (Juan FAO Pedro)
• Joint accounts


  • 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
  • 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
• 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 P500,000.00.
• Certificate of Deposit


  No owner holder of any negotiable certificate of deposit shall be recognized as a depositor entitled to the rights in PDIC Art unless his name is registered as owner/holder thereof in the books of the issuing bank
• Procedure for the PDIC

  1. PDIC shall commence the determination of insured deposits due the depositors of a closed bank upon its actual takes over of the closed bank

  2. PDIC shall give notice to the depositors of the closed bank of the insured deposits due them by whatever means deemed appropriate by the Board of Directors

  3. PDIC shall publish the notice once a week for at least 3 consecutive weeks in a newspaper of general circulation or, when appropriate, in a newspaper circulated in the community or communities where the closed bank or its branches are located
• Mode of payment


  Made as soon as possible either by cash or by making available to each depositor a transferred deposit in another insured bank in an amount equal to insured deposit of such depositor
• 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, it may require final determination of a court of competent jurisdiction before paying such claim.
• The PDIC may withhold payment of such portion of the insured deposit for the payment of any liability of such depositor as a stockholder of the closed bank, or of any liability of such depositor to the closed bank.