Republic of the Philippines
CONGRESS OF THE PHILIPPINES
Metro ManilaSixteenth Congress
Third Regular SessionBegun and held in Metro Manila, on Monday, the twenty-seventh day of July, two thousand fifteen.
REPUBLIC ACT No. 10846
AN ACT ENHANCING THE RESOLUTION AND LIQUIDATION FRAMEWORK FOR BANKS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 3591, AS AMENDED, AND OTHER RELATED LAWS
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 to read as follows:
“THE CREATION OF THE PHILIPPINE
DEPOSIT INSURANCE CORPORATION“SECTION 1. — There is hereby created a Philippine Deposit Insurance Corporation hereinafter referred to as the ‘Corporation’ which shall insure as herein provided, the deposits of all banks which are entitled to the benefits of insurance under this Act, and which shall have the powers hereinafter granted.
“The Corporation shall, as a basic policy, promote and safeguard the interests of the depositing public by providing insurance coverage on all insured deposits and helping maintain...
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Republic Acts
AN ACT ENHANCING THE AND LIQUIDATION FRAMEWORK FOR BANKS
Republic Act No. 10846
Summary of Republic Act No. 10846:
Enhancing the Resolution and Liquidation Framework for Banks
I. Philippine Deposit Insurance Corporation (PDIC)
- Creates the PDIC to insure deposits and safeguard interests of depositors (Section 1)
- Declares state policy to strengthen deposit insurance system (Section 2)
- Outlines composition and authority of PDIC Board of Directors (Section 3)
- Defines powers and duties of PDIC President (Section 4)
II. Definitions (Section 5)
- Defines key terms such as assets, deposit, insured deposit (up to ₱500,000), closed bank, receiver, resolution, liquidation, and others
III. Deposit Insurance Coverage (Section 6)
- Provides deposit insurance coverage for banks engaged in receiving deposits
- Allows PDIC to conduct insurance risk evaluation on capital deficient banks
IV. Assessment of Member Banks (Section 7)
- Outlines assessment rate (up to 0.2% per annum) and assessment base for insured banks
- Allows PDIC to establish risk-based assessment system (up to 0.4% per annum)
- Authorizes PDIC to collect special assessments to maintain Deposit Insurance Fund (DIF)
V. Sanctions for Unsafe Banking Practices (Section 8)
- Empowers PDIC to issue cease and desist orders for unsafe practices
- Allows PDIC to terminate insured status for non-compliance
- Provides 180-day insured deposit coverage after termination
VI. Powers of PDIC (Section 9)
- Grants PDIC various powers, including conducting investigations, determining resolution methods, implementing liquidation modes, and others
VII. Bank Resolution (Section 11)
- Allows PDIC to commence bank resolution upon failure of prompt corrective action or bank request
- Outlines process for determining resolution method (e.g., purchase of assets, merger)
- Authorizes PDIC to appoint agents for resolution
VIII. Liquidation of Closed Bank (Sections 12-16)
- Designates PDIC as receiver for closed banks ordered by Monetary Board
- Outlines authorities of receiver, including asset management, conversion, and distribution
- Describes effects of bank closure on corporate existence, assets, contracts, and claims
- Establishes process for petition for assistance in liquidation and winding-up period
IX. Financial Assistance (Section 17)
- Authorizes PDIC to provide loans, purchase assets, or assume liabilities for banks in danger of closing or to maintain financial stability
X. Dividend Declaration (Section 18)
- Requires PDIC to build up and maintain DIF at target level
- Allows PDIC to remit dividends to government if target DIF level is reached
XI. Payment of Insured Deposits (Section 19)
- Requires PDIC to pay insured deposits as soon as possible after bank closure
- Allows PDIC to require proof of claims before payment
- Imposes penalties for unjustified delay in settling claims
XII. Subrogation Rights (Section 20)
- Subrogates PDIC to rights of depositor against closed bank to extent of payment
- Grants PDIC preference for insured deposit payments as public funds
XIII. Corporate Funds and Assets (Section 22)
- Outlines investment options for PDIC funds
- Exempts PDIC assets from attachment or garnishment
XIV. Authority to Borrow (Section 23)
- Authorizes PDIC to borrow from Bangko Sentral ng Pilipinas or other banks
XV. Issuance of Bonds (Section 24)
- Allows PDIC to issue bonds and obligations, with Presidential approval for government-guaranteed bonds
XVI. Penalties (Section 26)
- Imposes penalties for various offenses, including false statements, obstructing PDIC, and defrauding banks
- Penalties range from fines (₱50,000 to ₱10 million) to imprisonment (6 to 20 years)
XVII. Exemptions and Transitory Provisions (Sections 27-29)
- Exempts PDIC from certain laws on salary standardization and position classification
- Provides transitory provisions for incumbent PDIC officials and ongoing liquidation proceedings
XVIII. Reorganization and Separation Incentives (Sections 50-51)
- Authorizes PDIC Board to reorganize staffing pattern and provide separation incentives
Enhancing the Resolution and Liquidation Framework for Banks
I. Philippine Deposit Insurance Corporation (PDIC)
- Creates the PDIC to insure deposits and safeguard interests of depositors (Section 1)
- Declares state policy to strengthen deposit insurance system (Section 2)
- Outlines composition and authority of PDIC Board of Directors (Section 3)
- Defines powers and duties of PDIC President (Section 4)
II. Definitions (Section 5)
- Defines key terms such as assets, deposit, insured deposit (up to ₱500,000), closed bank, receiver, resolution, liquidation, and others
III. Deposit Insurance Coverage (Section 6)
- Provides deposit insurance coverage for banks engaged in receiving deposits
- Allows PDIC to conduct insurance risk evaluation on capital deficient banks
IV. Assessment of Member Banks (Section 7)
- Outlines assessment rate (up to 0.2% per annum) and assessment base for insured banks
- Allows PDIC to establish risk-based assessment system (up to 0.4% per annum)
- Authorizes PDIC to collect special assessments to maintain Deposit Insurance Fund (DIF)
V. Sanctions for Unsafe Banking Practices (Section 8)
- Empowers PDIC to issue cease and desist orders for unsafe practices
- Allows PDIC to terminate insured status for non-compliance
- Provides 180-day insured deposit coverage after termination
VI. Powers of PDIC (Section 9)
- Grants PDIC various powers, including conducting investigations, determining resolution methods, implementing liquidation modes, and others
VII. Bank Resolution (Section 11)
- Allows PDIC to commence bank resolution upon failure of prompt corrective action or bank request
- Outlines process for determining resolution method (e.g., purchase of assets, merger)
- Authorizes PDIC to appoint agents for resolution
VIII. Liquidation of Closed Bank (Sections 12-16)
- Designates PDIC as receiver for closed banks ordered by Monetary Board
- Outlines authorities of receiver, including asset management, conversion, and distribution
- Describes effects of bank closure on corporate existence, assets, contracts, and claims
- Establishes process for petition for assistance in liquidation and winding-up period
IX. Financial Assistance (Section 17)
- Authorizes PDIC to provide loans, purchase assets, or assume liabilities for banks in danger of closing or to maintain financial stability
X. Dividend Declaration (Section 18)
- Requires PDIC to build up and maintain DIF at target level
- Allows PDIC to remit dividends to government if target DIF level is reached
XI. Payment of Insured Deposits (Section 19)
- Requires PDIC to pay insured deposits as soon as possible after bank closure
- Allows PDIC to require proof of claims before payment
- Imposes penalties for unjustified delay in settling claims
XII. Subrogation Rights (Section 20)
- Subrogates PDIC to rights of depositor against closed bank to extent of payment
- Grants PDIC preference for insured deposit payments as public funds
XIII. Corporate Funds and Assets (Section 22)
- Outlines investment options for PDIC funds
- Exempts PDIC assets from attachment or garnishment
XIV. Authority to Borrow (Section 23)
- Authorizes PDIC to borrow from Bangko Sentral ng Pilipinas or other banks
XV. Issuance of Bonds (Section 24)
- Allows PDIC to issue bonds and obligations, with Presidential approval for government-guaranteed bonds
XVI. Penalties (Section 26)
- Imposes penalties for various offenses, including false statements, obstructing PDIC, and defrauding banks
- Penalties range from fines (₱50,000 to ₱10 million) to imprisonment (6 to 20 years)
XVII. Exemptions and Transitory Provisions (Sections 27-29)
- Exempts PDIC from certain laws on salary standardization and position classification
- Provides transitory provisions for incumbent PDIC officials and ongoing liquidation proceedings
XVIII. Reorganization and Separation Incentives (Sections 50-51)
- Authorizes PDIC Board to reorganize staffing pattern and provide separation incentives