AN ACT AMENDING REPUBLIC ACT NUMBERED THREE THOUSAND FIVE HUNDRED
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AN ACT AMENDING REPUBLIC ACT NUMBERED THREE THOUSAND FIVE HUNDRED
Republic Act No. 9302
July 27, 2004
Case Overview and Summary
Summary of Republic Act No. 9302Basic Policy and Mandate
- The Philippine Deposit Insurance Corporation (PDIC) shall promote and safeguard the interests of depositors by providing permanent and continuing insurance coverage on all insured deposits. (Section 1)
Governance and Management
- The PDIC shall be governed by a 5-member Board of Directors, with the Secretary of Finance as ex-officio Chairman, the Governor of the Bangko Sentral ng Pilipinas (BSP) as ex-officio member, the PDIC President as Vice Chairman, and two private sector members. (Section 2)
- The Board has authority to issue rules and regulations, direct the management and operations of the PDIC, establish a human resource management system, appoint and fix remuneration of officers and employees, adopt an annual budget, and approve the methodology for determining insurance and financial assistance loss provisions. (Section 2)
Insured Deposits
- The term "insured deposit" means the amount due to any depositor, net of obligations to the bank, but not exceeding ₱250,000. (Section 4)
- Joint accounts shall be insured separately, with the maximum insured deposit divided equally among co-owners, unless a different sharing is stipulated. (Section 4)
- Negotiable certificates of deposit are recognized as insured deposits only if the owner's name is registered in the bank's books. (Section 4)
Assessment Fees
- The assessment rate shall be determined by the Board but shall not exceed 1/5 of 1% per annum. (Section 6)
- The semi-annual assessment for each insured bank shall be the product of 1/2 the assessment rate multiplied by the assessment base, but not less than ₱5,000. (Section 6)
- Assessment collections and income from operations, after expenses and charges, shall be added to the Deposit Insurance Fund. (Section 6)
Examination and Enforcement
- The PDIC may conduct examinations of banks with prior approval of the Monetary Board, subject to certain conditions. (Section 8)
- The PDIC may issue cease and desist orders and impose fines for unsafe or unsound practices or violations of laws or regulations by insured banks. (Section 7)
- The PDIC may appoint investigators to conduct investigations on frauds, irregularities, and anomalies in banks. (Section 9)
Receivership and Liquidation
- The Monetary Board shall appoint the PDIC as receiver of any closed banking institution. (Section 10)
- As receiver, the PDIC has various powers, including controlling and managing the affairs of the closed bank, bringing suits, appointing deputies and assistants, suspending or terminating employment of officers and employees, collecting loans and claims, borrowing or obtaining loans, and modifying or reducing interest rates on deposits. (Section 10)
- The PDIC shall periodically charge reasonable receivership and liquidation expenses against the assets of the closed bank. (Section 12)
Payment of Insured Deposits
- The PDIC shall pay insured deposits of a closed bank as soon as possible, either by cash or by making available a transferred deposit in another insured bank. (Section 14)
- The PDIC shall give notice to depositors of the insured deposits due them and publish the notice in a newspaper for at least three consecutive weeks. (Section 16)
- Failure to claim insured deposits within two years from the PDIC's takeover or to enforce a claim within two years after the filing period shall bar the depositor's rights against the PDIC. (Section 16)
Financial Assistance
- The PDIC may provide financial assistance to insured banks in danger of closing or closed banks, subject to certain conditions, including purchasing assets, assuming liabilities, making loans or deposits, or providing assistance to acquiring entities. (Section 17)
- The PDIC may grant financial assistance to prevent systemic risk, subject to concurrence by the Monetary Board and without additional cost to the Deposit Insurance Fund. (Section 17)
Borrowing and Funding
- The PDIC is authorized to borrow from the BSP and other designated government depositories or fiscal agents for insurance purposes and financial assistance. (Sections 18 and 19)
- The PDIC may issue bonds, debentures, and other obligations for settlement of insured deposits and financial assistance, subject to approval by the President of the Philippines. (Section 19)
- The permanent insurance fund shall be ₱3 billion, and the Deposit Insurance Fund shall consist of the permanent insurance fund, assessment collections, reserves for losses, and retained earnings. (Section 13)
Reporting and Auditing
- The PDIC shall annually report its operations to Congress. (Section 20)
- The Commission on Audit shall audit the financial transactions of the PDIC, except for matters relating to its receivership function, which shall be subject to visitorial audit only. (Section 20)
Penalties and Sanctions
- Penalties, including imprisonment and fines ranging from ₱50,000 to ₱2 million, shall be imposed for various offenses, such as willful refusal to submit reports, making false statements, obstructing the PDIC's takeover of a closed bank, and violating provisions of the Act. (Section 21)
- The PDIC is authorized to impose administrative fines for violations of orders, instructions, rules, or regulations, up to three times the amount of damages or costs caused by the violation, per day. (Section 21)
Reorganization and Separation Incentives
- The PDIC may be reorganized by the Board of Directors by adopting a new staffing pattern or organizational structure. (Section 23)
- Personnel who are not retained in the reorganization shall be deemed separated from service and entitled to separation incentives in addition to other benefits. (Section 24)
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Law
AN ACT AMENDING REPUBLIC ACT NUMBERED THREE THOUSAND FIVE HUNDRED
Republic Act No. 9302
•July 27, 2004
Republic of the Philippines
Congress of the Philippines
Metro Manila
Twelfth CongressThird Regular Session
Begun and held in Metro Manila, on Monday, the twenty-eighth day of July, two thousand three.
Republic Act No. 9302            
AN ACT AMENDING REPUBLIC ACT NUMBERED THREE THOUSAND FIVE HUNDRED NINETY-ONE, AS AMENDED, OTHERWISE KNOWN AS THE "CHARTER OF THE PHILIPPINE DEPOSIT INSURANCE CORPORATION" AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. Section 1 of Republic Act No. 3591, as amended, is hereby amended by adding a new paragraph to read as follows:
"The Corporation shall, as a basic policy, promote and safeguard the interests of the depositing public by way of providing permanent and continuing insurance coverage on all insured deposits."
SECTION 2. Section 2 of the same Act is hereby further amended to read as follows:
"SEC. 2. The powers and functions of the Corporation shall be vested in, and exercised by a Board of Directors which shall be...
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