PDIC Law (Amended)

8/9/2019 PDIC Law (Amended)

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THE CREATION OF THE PHILIPPINE DEPOSIT INSURANCE CORPORATION

SECTION 1. There is hereby created a Philippine Deposit Insurance Corporation hereinafterreferred to as the “Corporation” which shall insure, as herein provided, the deposits of allbanks which are entitled to the benets of insurance under this Act, and which shall havethe powers hereinafter ranted!

The Corporation shall, as a basic policy, pro"ote and safeuard the interests of thedepositin public by way of providin per"anent and continuin insurance coverae on allinsured deposits!#

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BOARD OF DIRECTORS: COMPOSITION AND AUTHORITY

SECTION 2. The powers and functions of the Corporation shall be vested in and e$ercisedby a %oard of Directors which shall be co"posed of ve &'( "e"bers as follows)

a. The *ecretary of +inance who shall be the ex-ofcio Chair"an of the %oard withoutco"pensation!

b. The overnor of the Bangko Sentral ng Pilipinas, who shall be ex-ofcio "e"ber ofthe %oard without co"pensation! (As amended by R.A. 930! " A#g#st 00$%

c. The President of the Corporation, who shall be appointed by the President of thePhilippines fro" either the overn"ent or private sector to serve on a full-ti"e basisfor a ter" of si$ &.( years! The President of the Corporation shall also serve as /iceChair"an of the %oard! (As amended by R.A. 930! " A#g#st 00$%

d. Two &0( "e"bers fro" the private sector, to be appointed for a ter" of si$ &.( yearswithout reappoint"ent by the President of the Philippines) Pro&ided, That of thoserst appointed, the rst appointee shall serve for a period of two &0( years!

1o person shall be appointed as "e"ber of the %oard unless he be of ood "oral characterand of un2uestionable interity and responsibility, and who is of reconi3ed co"petence inecono"ics, bankin and nance, law, "anae"ent ad"inistration or insurance, and shall beat least thirty-ve &4'( years of ae! +or the duration of their tenure or ter" in o5ce and fora period of one year thereafter, the appointive "e"bers of the %oard shall be dis2ualiedfro" holdin any o5ce, position or e"ploy"ent in any insured bank!

The *ecretary of +inance and the overnor of the Bangko Sentral "ay each desinate arepresentative, whose position shall not be lower than an undersecretary or deputy overnorrespectively, to attend such "eetins and to vote on behalf of their respective principals!6henever the Chair"an of the %oard is unable to attend a "eetin of the %oard, or in theevent of a vacancy in the o5ce of the *ecretary of +inance, the President of the Corporationshall act as Chair"an! (As amended by R.A. 930! " A#g#st 00$%

The presence of three &4( "e"bers shall constitute a 2uoru"! All decisions of the %oard ofDirectors shall re2uire the concurrence of at least three &4( "e"bers! (As amended by R.A.930! " A#g#st 00$%

The *ecretary of +inance shall $ the rate of per diem for every %oard "eetin attended bythe "e"bers of the %oard of Directors fro" the private sector! The President of thePhilippines "ay $ such e"olu"ents that "ay be received by the %oard of Directors

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co"parable to the e"olu"ents of "e"bers of the %oard of Directors of other overn"entnancial institutions! (As amended by R.A. 930! " A#g#st 00$%

The %oard of Directors shall have the authority)

". To prepare and issue rules and reulations as it considers necessary for the e7ective

dischare of its responsibilities8. To direct the "anae"ent, operations and ad"inistration of the Corporation8

3. To establish a hu"an resource "anae"ent syste" which shall overn the selection,hirin, appoint"ent, transfer, pro"otion, or dis"issal of all personnel! *uch syste"shall ai" to establish professionalis" and e$cellence at all levels of the Corporationin accordance with sound principles of "anae"ent! (As addedby R.A. 930! " A#g#st 00$%

A co"pensation structure, based on 9ob evaluation studies and wae surveys andsub9ect to the %oard:s approval, shall be instituted as an interal co"ponent of theCorporation:s hu"an resource develop"ent prora") Pro&ided, That all positions inthe Corporation shall be overned by a co"pensation, position classication syste"

and 2ualication standards approved by the %oard based on a co"prehensive 9obanalysis and audit of actual duties and responsibilities! The co"pensation plan shallbe co"parable with the prevailin co"pensation plans of other overn"ent nancialinstitutions and shall be sub9ect to review by the %oard no "ore than once every two&0( years without pre9udice to yearly "erit reviews or increases based on productivityand protability! The Corporation shall therefore be e$e"pt fro" e$istin laws, rulesand reulations on co"pensation, position classication and 2ualication standards!It shall however endeavor to "ake its syste" confor" as closely as possible with theprinciples under ;epublic Act 1o! .


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i"portance and responsibility attached to the position! The su" total of the salary of thePresident and the allowances and other e"olu"ents which the %oard of Directors "ay ranthi" shall be the ceilin for $in the salary, allowances and other e"olu"ents of all otherpersonnel in the Corporation! (Ren#mbered *rom Sec. -A by R.A. 930! " A#g#st 00$%

The powers and duties of the President of the Corporation are)

a! To prepare the aenda for the "eetin of the %oard and to sub"it for theconsideration of the %oard the policies and "easures which he believes to benecessary to carry out the purposes and provisions of this Act8

b! To e$ecute and ad"inister the policies and "easures approved by the %oard8

c! To direct and supervise the operations and internal ad"inistration of the Corporationin accordance with the policies established by the %oard! The President "ay deleatecertain of his ad"inistrative responsibilities to other o5cers of the Corporation,sub9ect to the rules and reulations of the %oard8

d! To represent the Corporation, upon prior authority of the %oard, in all dealins withother o5ces, aencies and instru"entalities of the overn"ent and with all otherpersons or entities, public or private, whether do"estic, forein or international8

e! To authori3e, with his sinature, upon prior authority of the %oard, contracts enteredinto by the Corporation, notes and securities issued by the Corporation, and theannual reports, balance sheets, prots and loss state"ents, correspondence andother docu"ents of the Corporation! The sinature of the President "ay be infacsi"ile wherever appropriate8

f! To represent the Corporation, either personally or throuh counsel, in all lealproceedins or actions8

! To deleate, with the prior approval of the %oard of Directors, his power to representthe Corporation, as provided in subsections &d( and &f( of this *ection, to othero5cers of the Corporation8 and

h! To e$ercise such other powers as "ay be vested in hi" by the %oard!

The President shall be assisted by a /ice President and other o5cials whose appoint"entand re"oval for cause shall be approved and whose salary shall be $ed by the %oard ofDirectors upon reco""endation of the President of the Corporation! Durin the absence orte"porary incapacity of the President, or in case of vacancy or per"anent incapacity andpendin the appoint"ent of a new President of the Corporation by the President of thePhilippines, the /ice President shall act as President and dischare the duties andresponsibilities thereof! (As amended by +.,. 90! 0 April "93 R.A. )$00! "3 April "99%

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DEFINITION OF TERMS

SECTION ". As used in this Act - (Ren#mbered *rom Sec. 3 by R.A. 930! " A#g#st 00$%

a. The ter" “%oard of Directors” "eans the %oard of Directors of the Corporation!b. The ter" “%ank” and “%ankin Institution” shall be synony"ous and interchaneable

and shall include banks, co""ercial banks, savins bank, "ortae banks, ruralbanks, develop"ent banks, cooperative banks, stock savins and loan associationsand branches and aencies in the Philippines of forein banks and all other



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corporations authori3ed to perfor" bankin functions in the Philippines! (As amendedby R.A. )$00! "3

April "99%

c. The ter" “receiver” includes a receiver, co""ission, person or other aency charedby law with the duty to take chare of the assets and liabilities of a bank which hasbeen forbidden fro" doin business in the Philippines, as well as the duty to ather,

preserve and ad"inister such assets and liabilities for the benet of the depositorsand creditors of said bank, and to continue into li2uidation whenever authori3edunder this Act or other laws, and to dispose of the assets and to wind up the a7airs of such bank! (As amended by R.A. )$00! "3 April "99%

d. The ter" “insured bank” "eans any bank the deposits of which are insured inaccordance with the provisions of this Act!

e. The ter" “non-insured bank” "eans any bank the deposits of which are not insured!

*. The ter" “deposit” "eans the unpaid balance of "oney or its e2uivalent received bya bank in the usual course of business and for which it has iven or is oblied to ivecredit to a co""ercial, checkin, savins, ti"e or thrift account, or issued inaccordance with Bangko Sentral rules and reulations and other applicable laws,

toether with such other obliations of a bank, which, consistent with bankin usaeand practices, the %oard of Directors shall deter"ine and prescribe by reulations tobe deposit liabilities of the bank) Provided, That any obliation of a bank which ispayable at the o5ce of the bank located outside of the Philippines shall not be adeposit for any of the purposes of this Act or included as part of the total deposits orof insured deposit) Provided, further, That, sub9ect to the approval of the %oard ofDirectors, any insured bank which is incorporated under the laws of the Philippineswhich "aintains a branch outside the Philippines "ay elect to include for insuranceits deposit obliations payable only at such branch!

The Corporation shall not pay deposit insurance for the followin accounts ortransactions, whether deno"inated, docu"ented, recorded or booked as deposit bythe bank)

#! Invest"ent products such as bonds and securities, trust accounts, and othersi"ilar instru"ents8

0! Deposit accounts or transactions which are unfunded, or that are ctitious orfraudulent8

4! Deposit accounts or transactions constitutin, and?or e"anatin fro", unsafeand unsound bankin practice?s, as deter"ined by the Corporation, inconsultation with the %*P, after due notice and hearin, and publication of acease and desist order issued by the Corporation aainst such depositaccounts or transactions8 and

@! Deposits that are deter"ined to be the proceeds of an unlawful activity as

dened under ;epublic Act #.B, as a"ended!

The actions of the Corporation taken under this section shall be nal and e$ecutory,and "ay not be restrained or set aside by the court, e$cept on appropriate petitionfor certiorari on the round that the action was taken in e$cess of 9urisdiction or withsuch rave abuse of discretion as to a"ount to a lack or e$cess of 9urisdiction! Thepetition for certiorari "ay only be led within thirty &4B( days fro" notice of denial ofclai" for deposit insurance! (As amended by P./. "9$0! ) #ne "9$ R.A. )$00! "3

April "99 R.A. 930! " A#g#st 00$ R.A. 9')! 9 April 009%


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g. The ter" “insured deposit” "eans the a"ount due to any bona de depositor forleiti"ate deposits in an insured bank net of any obliation of the depositor to theinsured bank as of the date of closure, but not to e$ceed +ive undred ThousandPesos &P'BB,BBB!BB(!0 *uch net a"ount shall be deter"ined accordin to suchreulations as the %oard of Directors "ay prescribe! In deter"inin such a"ount dueto any depositor, there shall be added toether all deposits in the bank "aintained in

the sa"e riht and capacity for his benet either in his own na"e or in the na"e ofothers! A 9oint account reardless of whether the con9unction and, or, and?or isused, shall be insured separately fro" any individually-owned depositaccount)Pro&ided, That ( If the account is held 9ointly by two or "ore naturalpersons, or by two or "ore 9uridical persons or entities, the "a$i"u" insured depositshall be divided into as "any e2ual shares as there are individuals, 9uridical personsor entities, unless a di7erent sharin is stipulated in the docu"ent of deposit, and &0(if the account is held by a 9uridical person or entity 9ointly with one or "ore naturalpersons, the "a$i"u" insured deposit shall be presu"ed to belon entirely to such

9uridical person or entity) Pro&ided! *#rt1er , That the areate of the interest of eachco-owner over several 9oint accounts, whether owned by the sa"e or di7erentco"binations of individuals, 9uridical persons or entities, shall likewise be sub9ect tothe "a$i"u" insured deposit of +ive undred Thousand Pesos&P'BB,BBB!BB() Pro&ided! *#rt1ermore, That the provisions of any law to the contrarynotwithstandin, no owner?holder of any neotiable certicate of deposit shall bereconi3ed as a depositor entitled to the rihts provided in this Act unless his na"e isreistered as owner?holder thereof in the books of the issuin bank) Pro&ided! 2nally ,

That, in case of a condition that threatens the "onetary and nancial stability of thebankin syste" that "ay have syste"ic conse2uences, as dened in section #<hereof, as deter"ined by the Eonetary %oard, the "a$i"u" deposit insurance cover"ay be ad9usted in such a"ount, for such a period, and?or for such deposit products,as "ay be deter"ined by a unani"ous vote of the %oard of Directors in a "eetincalled for the purpose and chaired by the *ecretary of +inance, sub9ect to theapproval of the President of the Philippines! (As amended by R.A. 930! " A#g#st00$ R.A. 9')! 009%

1. The ter" “transfer deposit” "eans a deposit in an insured bank "ade available to adepositor by the Corporation as pay"ent of insured deposit of such depositor in aclosed bank and assu"ed by another insured bank!

i. The ter" “trust funds” "eans funds held by an insured bank in a duciary capacityand includes without bein li"ited to, funds held as trustee, e$ecutor, ad"inistrator,uardian or aent!

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DEPOSIT INSURANCE CO#ERA$E

SECTION %. The deposit liabilities of any bank or bankin institution, which is enaed inthe business of receivin deposits as herein dened on the e7ective date of this Act, or

which thereafter "ay enae in the business of receivin deposits, shall be insured with theCorporation! (As amended by R.A. 03)! 0$ A#g#st "99 ren#mbered *rom Sec. $ by R.A.930! " A#g#st 00$%

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ASSESSMENT OF MEMBER BAN&S

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SECTION '.

a. The assess"ent rate shall be deter"ined by the %oard of Directors) Pro&ided, Thatthe assess"ent rate shall not e$ceed one-fth ?'( of one per cent#m F( perann#m! The se"iannual assess"ent for each insured bank shall be in the a"ount ofthe product of one-half ?0( the assess"ent rate "ultiplied by the assess"ent base

but in no case shall it be less than +ive thousand pesos &P',BBB!BB(! The assess"entbase shall be the a"ount of the liability of the bank for deposits as dened undersubsection &f( of *ection @ without any deduction for indebtedness of depositors! (Asamended by R.A. 930! " A#g#st 00$%

The se"i-annual assess"ent base for one se"i-annual period shall be the averae of the assess"ent base of the bank as of the close of business on Earch thirty-one and

Gune thirty and the se"i-annual assess"ent base for the other se"i-annual periodshall be the averae of the assess"ent base of the bank as of the close of businesson *epte"ber thirty and Dece"ber thirty-one) Pro&ided, That when any of said daysis a non-business day or leal holiday, either national or provincial, the precedinbusiness day shall be used! The certied state"ents re2uired to be led with theCorporation under subsections &b( and &c( of this *ection shall be in such for" and

set forth such supportin infor"ation as the %oard of Directors shall prescribe! Theassess"ent pay"ents re2uired fro" the insured banks under subsections &b( and &c(of this *ection shall be "ade in such "anner and at such ti"e or ti"es as the %oardof Directors shall prescribe, provided the ti"e or ti"es so prescribed shall not belater than si$ty &.B( days after lin the certied state"ent settin forth the a"ountof assess"ent!(As amended by R.A. )$00! "3 April "99%

b. Hn or before the 4#st of Guly of each year, each insured bank shall le with theCorporation a certied state"ent showin for the si$ "onths endin on theprecedin Gune thirty the a"ount of the assess"ent base and the a"ount of these"i-annual assess"ent due to the Corporation for the period endin on thefollowin Dece"ber thirty-one, deter"ined in accordance with subsection &a( of this*ection, which shall contain or be veried by a written declaration that it is "ade

under the penalties of per9ury! >ach insured bank shall pay to the Corporation thea"ount of the se"i-annual assess"ent it is re2uired to certify! Hn or before the4#st day of Ganuary of each year, each insured bank shall le with the Corporation asi"ilar certied state"ent for the si$ "onths endin on the precedin Dece"berthirtyone and shall pay to the Corporation the a"ount of the se"i-annual assess"entfor the period endin on the followin Gune thirty which it is re2uired to certify! (Asamended by P./. "9$0!) #ne "9$%

c. >ach bank which beco"es an insured bank shall not be re2uired to le any certiedstate"ent or pay any assess"ent for the se"i-annual period in which it beco"es aninsured bank! Hn the e$piration of such period, each such bank shall co"ply with theprovisions of subsection &b( of this section e$cept that the se"i-annual assess"entbase for its rst certied state"ent shall be the assess"ent base of the bank as of

the close of business on the precedin Gune thirty or Dece"ber thirty-one, whicheveris applicable, deter"ined in accordance with subsection &a( of this section! If suchbank has assu"ed the liabilities for deposits of another bank or banks, it shall includesuch liabilities in its assess"ent base! The rst certied state"ent shall show as thea"ount of the rst se"i-annual assess"ent due to the Corporation, an a"ount e2ualto the product of one-half of the annual assess"ent rate "ultiplied by suchassess"ent base!

d. All assess"ent collections and inco"e fro" operations after e$penses and charesshall be added to the Deposit Insurance +und under *ection #4 hereof! *uch e$penses


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and chares are) ( the operatin costs and e$penses of the Corporation for thecalendar year8 &0( additions to reserve to provide for insurance and nancialassistance losses, net of recoverable a"ounts fro" applicable assets and collaterals,durin the calendar year8 and &4( the net insurance and nancial assistance lossessustained in said calendar year!(As amended by R.A. 930! " A#g#st 00$%

e. The Corporation ( "ay refund to an insured bank any pay"ent of assess"ent ine$cess of the a"ount due to the Corporation or &0( "ay credit such e$cess towardthe pay"ent of the assess"ent ne$t beco"in due fro" such bank and uponsucceedin assess"ents until the credit is e$hausted!

*. Any insured bank which fails to le any certied state"ent re2uired to be led by it inconnection with deter"inin the a"ount of any assess"ent payable by the bank tothe Corporation "ay be co"pelled to le such state"ent by "andatory in9unction orother appropriate re"edy in a suit brouht for such purpose by the Corporationaainst the bank and any o5cer or o5cers thereof in any court of the Philippines ofco"petent 9urisdiction in which such bank is located!

g. The Corporation, in a suit brouht in any court of co"petent 9urisdiction, shall beentitled to recover fro" any insured bank the a"ount of any unpaid assess"entlawfully payable by such insured bank to the Corporation, whether or not such bankshall have led any such certied state"ent and whether or not suit shall have beenbrouht to co"pel the bank to le any such state"ent! 1o action or proceedin shallbe brouht for recovery of any assess"ent due to the Corporation or for therecoverin of any a"ount paid to the Corporation in e$cess of the a"ount due to it,unless such action or proceedin shall have been brouht within ve years after theriht accrued for which the clai" is "ade, e$cept where the insured bank has "adeor led with the Corporation a false or fraudulent certied state"ent with the intentto evade, in whole or in part, the pay"ent of assess"ent, in which case the clai"shall not have been dee"ed to have accrued until the discovery by the Corporation,that the certied state"ent is false or fraudulent!

1. The Corporation shall not ter"inate the insured status of any bank which continues

to operate or receive deposits! *hould any insured bank fail or refuse to pay anyassess"ent re2uired to be paid by such bank under any provision of this Act, andshould the bank not correct such failure or refusal within thirty &4B( days after writtennotice has been iven by the Corporation to an o5cer of the bank citin thissubsection, and statin that the bank has failed or refused to pay as re2uired by thelaw, the Corporation "ay, at its discretion, le a case for collection before theappropriate court without pre9udice to the i"position of ad"inistrative sanctionsallowed under the provisions of this aw on the bank o5cials responsible for the non-pay"ent of assess"ent fees! (As amended by R.A. 930! " A#g#st 00$%

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SANCTIONS A$AINST UNSAFE AND UNSOUND BAN&IN$ PRACTICES

SECTION (.

a. 6henever upon e$a"ination by the Corporation into the condition of any insuredbank, it shall be disclosed that an insured bank or its directors or aents haveco""itted, are co""ittin or about to co""it unsafe or unsound practices inconductin the business of the bank, or have violated, are violatin or about toviolate any provisions of any law or reulation to which the insured bank is sub9ect,



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the %oard of Directors shall sub"it the report of the e$a"ination to the Eonetary%oard to secure corrective action thereon! If no such corrective action is taken by theEonetary %oard within forty-ve &@'( days fro" the sub"ission of the report, the%oard of Directors shall, mot# proprio, institute corrective action which it dee"snecessary! The %oard of Directors "ay thereafter issue a cease and desist order, andre2uire the bank or its directors or aents concerned to correct the practices or

violations within forty-ve &@'( days! owever, if the practice or violation is likely tocause insolvency or substantial dissipation of assets or earnins of the bank, or islikely to seriously weaken the condition of the bank or otherwise seriously pre9udicethe interests of its depositors and the Corporation, the period to take correctiveaction shall not be "ore than fteen '( days! The order "ay also include thei"position of nes provided in *ection 0# &f( hereof! The %oard of Directors shall dulyinfor" the Eonetary %oard of the Bangko Sentral ng Pilipinas of action it has takenunder this subsection with respect to such practices or violations! (As amended byR.A. )$00! "3 April "99 R.A. 930! " A#g#st 00$%

b. The actions and proceedins provided in the precedin subsection "ay beundertaken by the Corporation if, in its opinion, an insured bank or its directors oraents have violated, are violatin or about to violate any provision of this Act or anyorder, rule or instruction issued by the Corporation or any written condition i"posedby the Corporation in connection with any transaction with or rant by theCorporation! (As amended by +.,. 90! 0 April "93 R.A. )$00! "3 April "99%

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POERS AS A CORPORATE BODY

SECTION ). The Corporation as a corporate body shall have the power -

+irst - To adopt and use a corporate seal8

*econd - To have succession until dissolved by an Act of Conress8

Third - To "ake contracts8

+ourth - To sue and be sued, co"plain and defend, in any court of law in the Philippines! Allsuits of a civil nature to which the Corporation shall be a part shall be dee"ed to arise underthe laws of the Philippines! 1o attach"ent or e$ecution shall be issued aainst theCorporation or its property before nal 9ud"ent in any suit, action, or proceedin in anycourt! The %oard of Directors shall desinate an aent upon who" service of process "ay be"ade in any province or city or 9urisdiction in which any insured bank is located8

+ifth - To appoint by its %oard of Directors such o5cers and e"ployees as are not otherwiseprovided for in this Act to dene their duties, $ their co"pensation, re2uire bonds of the"and $ penalty thereof and to dis"iss such o5cers and e"ployees for cause8

*i$th - To prescribe, by its %oard of Directors, by-laws not inconsistent with law, reulatinthe "anner in which its eneral business "ay be conducted, and the privilees ranted to itby law "ay be e$ercised and en9oyed8

*eventh - To e$ercise by its %oard of Directors, or duly authori3ed o5cers or aents, allpowers specically ranted by the provisions of this Act, and such incidental powers as shallbe necessary to carry on the powers so ranted8



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>ihth J To conduct e$a"ination of banks with prior approval of the Eonetary%oard) Pro&ided, That no e$a"ination can be conducted within twelve ( "onths fro" thelast e$a"ination date) Pro&ided! 1oe&er , That the Corporation "ay, in coordination withthe %anko *entral, conduct a special e$a"ination as the %oard of Directors, by ana5r"ative vote of a "a9ority of all of its "e"bers, if there is a threatened or i"pendinclosure of a bank8 Pro&ided! *#rt1er , That, notwithstandin the provisions of ;epublic Act 1o!

#@B', as a"ended, ;epublic Act 1o! .@0., as a"ended, ;epublic Act 1o! =leventh - The Corporation "ay establish its own provident fund which shall consist ofcontributions "ade both by the Corporation and by its o5cers and e"ployees to a co""onfund for the pay"ent of benets to such o5cers or e"ployees or their heirs! The %oard ofDirectors shall prepare and issue rules and reulations as it "ay dee" necessary to "akee7ective the establish"ent and operation of the fund8 (As amended by P./. "9$0! ) #ne"9$%

Twelfth - To co"pro"ise, condone or release, in whole or in part, any of clai" or settledliability to the Corporation, reardless of the a"ount involved, under such ter"s andconditions as "ay be i"posed by the %oard of Directors to protect the interest of theCorporation! (As added by R.A. )$00! "3 April "99%

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POERS AND RESPONSIBILITIES AND PROHIBITIONS

SECTION *.

a. The %oard of Directors shall ad"inister the a7airs of the Corporation fairly andi"partially and without discri"ination! The Corporation shall be entitled to the freeuse of Philippine "ails in the sa"e "anner as the other o5ces of the nationalovern"ent!

b. The %oard of Directors shall appoint e$a"iners who shall have power, on behalf ofthe Corporation to e$a"ine any insured bank! >ach such e$a"iner shall have thepower to "ake a thorouh e$a"ination of all the a7airs of the bank and in doin so,he shall have the power to ad"inister oaths, to e$a"ine and take and preserve thetesti"ony of any of the o5cers and aents thereof, and, to co"pel the presentationof books, docu"ents, papers, or records necessary in his 9ud"ent to ascertain thefacts relative to the condition of the bank8 and shall "ake a full and detailed report of the condition of the bank to the Corporation! The %oard of Directors in like "annershall appoint clai" aents who shall have the power to investiate and e$a"ine allclai"s for insured deposits and transferred deposits! >ach clai" aent shall have thepower to ad"inister oaths and to e$a"ine under oath and take and preserve



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testi"ony of any person relatin to such clai"! (As amended by +.,. 90! 0 April"93 R.A. )$00! "3 April "99%

&b-#( The investiators appointed by the %oard of Directors shall have the power onbehalf of the Corporation to conduct investiations on frauds, irreularities andano"alies co""itted in banks, based on reports of e$a"ination conducted by the

Corporation and Bangko Sentral ng Pilipinas or co"plaints fro" depositors or fro"other overn"ent aency! >ach such investiator shall have the power to ad"inisteroaths, and to e$a"ine and take and preserve the testi"ony of any person relatin tothe sub9ect of investiation!(As added by R.A. 930! " A#g#st 00$%

c. >ach insured bank shall "ake to the Corporation reports of condition in such for"and at such ti"es as the %oard of Directors "ay re2uire such reports to be publishedin such "anner, not inconsistent with any applicable law, as it "ay direct! >very suchbank which fails to "ake or publish any such report within such ti"e, not less thanve days, as the %oard of Directors "ay re2uire, shall be sub9ect to a penalty of not"ore than P#BB for each day of such failure recoverable by the Corporation for itsuse!

d. The Corporation shall have access to reports of e$a"ination "ade by, and reports ofcondition "ade to the Bangko Sentral ng Pilipinas or its appropriate supervisindepart"ents, and the Bangko Sentral ng Pilipinas shall also have access to reports ofe$a"ination "ade by, and reports of condition "ade to the Corporation) Pro&ided,

That the provisions of any law to the contrary notwithstandin, the Corporation shalllikewise have access to reports, ndins and any other infor"ation derived fro" anyspecial or eneral e$a"ination or in2uiry conducted by the Bangko Sentral in respectto bank fraud or serious irreularity in an insured bank) Pro&ided, That theCorporation shall use reports and ndins under si"ilar ter"s and conditionsprescribed by applicable laws on the %anko *entral! (As amended by +.,. 90! 0

April "93 R.A. )$00! "3 April "99 R.A. 930!" A#g#st 00$%

&d-#( >ach insured bank shall keep and "aintain a true and accurate record orstate"ent of its daily deposit transactions consistent with the standards set bythe Bangko Sentral ng Pilipinas and the Corporation! Co"pliance with such standardsshall be duly certied by the president of the bank or the co"plianceo5cer) Pro&ided, That refusal or willful failure to issue the re2uired certication shallconstitute a violation of this *ection and shall sub9ect such o5cers of the bank to thesanctions provided for under *ection 0# &f( of this Act! (As added by R.A. 930! "

A#g#st 00$%

e. Personnel of the Corporation are hereby prohibited fro")". bein an o5cer, director, consultant, e"ployee or stockholder, directly or

indirectly, of any bank or bankin institution e$cept as otherwise provided inthis Act8 (As added by R.A. )$00! "3 April "99%

. receivin any ift or thin of value fro" any o5cer, director or e"ployeethereof8 &As added by ;!A!


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in writin to receive such infor"ation! (As amended by R.A. 930! " A#g#st00$%

*. The Corporation shall underwrite or advance litiation costs and e$penses, includinleal fees and other e$penses of e$ternal counsel, or provide leal assistance to,directors, o5cers, e"ployees or aents of the Corporation in connection with anycivil, cri"inal, ad"inistrative or any other action or proceedin, to which such

director, o5cer, e"ployee or aent is "ade a party by reason of, or in connectionwith, the e$ercise of authority or perfor"ance of functions and duties under thisAct) Pro&ided, That such leal protection shall not apply to any civil, cri"inal,ad"inistrative or any action or proceedin that "ay be initiated by the Corporation,in whatever capacity, aainst such director, o5cer, e"ployee or aent) Pro&ided!*#rt1er , That directors, o5cers, e"ployees or aents who shall resin, retire, transferto another aency or be separated fro" the service, shall continue to be providedwith such leal protection in connection with any act done or o"itted to be done bythe" in ood faith durin their tenure or e"ploy"ent with the Corporation) Pro&ided!2nally , That in the event of a settle"ent or co"pro"ise, inde"nication shall beprovided only in connection with such "atters covered by the settle"ent as to whichthe Corporation is advised by counsel that the persons to be inde"nied did notco""it any nelience or "isconduct! (As added by R.A. 930! " A#g#st 00$%

g. The costs and e$penses incurred in defendin the afore"entioned action, suit orproceedin "ay be paid by the Corporation in advance of the nal disposition of suchaction, suit or proceedin upon receipt of an undertakin by or on behalf of thedirector, o5cer, e"ployee or aent to repay the a"ount advanced should itulti"ately be deter"ined by the %oard of Directors that he is not entitled to beinde"nied as provided in this subsection!(As added by R.A. 930! " A#g#st 00$%

1. Knless the actions of the Corporation or any of its o5cers and e"ployees are foundto be in willful violation of this Act, perfor"ed in bad faith, with "alice and?or rossnelience, the Corporation, its directors, o5cers, e"ployees and aents are heldfree and har"less to the fullest e$tent per"itted by law fro" any liability, and theyshall be inde"nied for any and all liabilities, losses, clai"s, de"ands, da"aes,deciencies, costs and e$penses of whatsoever kind and nature that "ay arise inconnection with the perfor"ance of their functions, without pre9udice to any cri"inalliability under e$istin laws! (As added by R.A. 9')! 9 April 009%

i. eal assistance shall include the rant or advance of reasonable leal fees asdeter"ined by the %oard of Directors to enable the concerned director, o5cer,e"ployee or aent to enae counsel of his choice, sub9ect to approval by the %oardof Directors!

1otwithstandin the provisions of this *ection and *ection 0, "e"bers of the %oardof Directors and personnel of the Corporation "ay beco"e directors and o5cers ofany bank and bankin institution and of any entity related to such institution inconnection with nancial assistance e$tended by the Corporation to such institution

and when, in the opinion of the %oard, it is appropriate to "ake such desination toprotect the interest of the Corporation! (As amended by R.A. 930! " A#g#st 00$%

%orrowin fro" any bank or bankin institution by e$a"iners and other personnel ofthe e$a"ination depart"ents of the Corporation shall be prohibited only with respectto the particular institution in which they are assined, or are conductin ane$a"ination! Personnel of other depart"ents, o5ces or units of the Corporation shalllikewise be prohibited fro" borrowin fro" any bank or bankin institution durin theperiod of ti"e that a transaction of such institution with the Corporation is bein


12/23

evaluated, processed or acted upon by such personnel) Pro&ided! 1oe&er , That the%oard "ay, at its discretion, indicate the position levels or functional roups to whichthe prohibition is applicable! (As amended by R.A. )$00! "3 April "99%

%orrowin by all full-ti"e personnel of the Corporation fro" any bank or bankininstitution shall be secured and disclosed to the %oard, and shall be sub9ect to such

further rules and reulations as the %oard "ay prescribe! (As amended by R.A. )$00!"3 April "99%

SECTION 1+.

a. The provisions of other laws, eneral or special, to the contraryotwithstandin, whenever it shall be appropriate for the Eonetary %oard ofthe Bangko Sentral ng Pilipinas to appoint a receiver of any bankin institutionpursuant to e$istin laws, the Eonetary %oard shall ive prior notice andappoint the Corporation as receiver! (As amended4ren#mbered *rom Sec. 9-Aby R.A. 930! " A#g#st 00$%

b. The Corporation as receiver shall control, "anae and ad"inister the a7airsof the closed bank! >7ective i""ediately upon takeover as receiver of such

bank, the powers, functions and duties, as well as all allowances,re"unerations and per2uisites of the directors, o5cers, and stockholders ofsuch bank are suspended, and the relevant provisions of the Articles ofIncorporation and %y-laws of the closed bank are likewise dee"edsuspended! (As added by R.A. 930! " A#g#st 00$%

The assets of the closed bank under receivership shall be dee"ed in c#stodialegis in the hands of the receiver! +ro" the ti"e the closed bank is placedunder such receivership, its assets shall not be sub9ect to attach"ent,arnish"ent, e$ecution, levy or any other court processes! Therefore, a 9ude,o5cer of the court or any person who shall issue, order, process or cause theissuance or i"ple"entation of the writ of arnish"ent, levy, attach"ent ore$ecution shall be liable under *ection 0# hereof! (As added

by R.A. 930! " A#g#st 00$%

c. In addition to the powers of a receiver pursuant to e$istin laws, theCorporation is e"powered to)

". brin suits to enforce liabilities to or recoveries of the closed bank8 (Asamended by R.A. 930!" A#g#st 00$%

. appoint and hire persons or entities of reconi3ed co"petence inbankin or nance as its deputies and assistants, to perfor" suchpowers and functions of the Corporation as receiver or li2uidator of theclosed bank8(As amended by R.A. 930! " A#g#st 00$%

3. suspend or ter"inate the e"ploy"ent of o5cers and e"ployees of theclosed bank) Pro&ided, That pay"ent of separation pay or benetsshall be "ade only after the closed bank has been placed underli2uidation pursuant to the order of the Eonetary %oard under *ection4B of ;!A!


13/23

of the closed bank8 (As added by R.A. 930!" A#g#st 00$%

'. collect loans and other clai"s of the closed bank, and for the purpose,"odify, co"pro"ise or restructure the ter"s and conditions of suchloans or clai"s as "ay be dee"ed advantaeous to the interest of thecreditors and clai"ants of the closed bank8 (As added by. R.A. 930!

" A#g#st 00$%

. hire or retain private counsels as "ay be necessary8 (As added by R.A.930! " A#g#st 00$%

). borrow or obtain a loan, or "ortae, plede or encu"ber any asset of the closed bank, when necessary to preserve or prevent dissipation ofthe assets, or to redee" foreclosed assets of the closed bank, or to"ini"i3e losses to the depositors and creditors8 (As added by R.A.930!" A#g#st 00$%

. if the stipulated interest on deposits is unusually hih co"pared withthe prevailin applicable interest rate, the Corporation as receiver "ay

e$ercise such powers which "ay include a reduction of the interestrate to a reasonable rate) Pro&ided, That any "odication or reductionshall apply only to unpaid interest8 (As added by R.A. 930! " A#g#st00$% and and

9. e$ercise such other powers as are inherent and necessary for thee7ective dischare of the duties of the Corporation as a receiver! (Asadded by R.A. 930! " A#g#st 00$%

The %oard of Directors shall adopt such policies and uidelines as "ay benecessary for the perfor"ance of the above powers by personnel, deputiesand aents of the Corporation! (As added by R.A. 930!" A#g#st 00$%

SECTION 11. In all cases or actions led by the Corporation as receiver forthe recovery of, or involvin any asset of the closed bank, pay"ent of alldocket and other court fees shall be deferred until the action is ter"inatedwith nality! Any such fees shall constitute as a rst lien on any 9ud"ent infavor of the closed bank or in case of unfavorable 9ud"ent, such fees shallbe paid as ad"inistrative e$penses durin the distribution of the assets of theclosed bank!(As added by R.A. 930! " A#g#st 00$%

SECTION 12. %efore any distribution of the assets of the closed bank inaccordance with the preference established by law, the Corporation shallperiodically chare aainst said assets reasonable receivership e$penses andsub9ect to approval by the proper court, reasonable li2uidation e$penses, it

has incurred as part of the cost of receivership?li2uidation proceedins andcollect pay"ent therefore fro" available assets! (As added by R.A. )$00! "3

April "99 ren#mbered *rom Sec. 9-B by R.A. 930!" A#g#st 00$%

After the pay"ent of all liabilities and clai"s aainst the closed bank, theCorporation shall pay any surplus dividends at the leal rate of interest fro"date of takeover to date of distribution, to creditors and clai"ants of the


14/23

closed bank in accordance with leal priority before distribution to theshareholders of the closed bank! (As added by R.A. 930! " A#g#st 00$%

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PERMANENT INSURANCE FUND

Section 9 (c% 5 (Repealed by R.A. 930! " A#g#st 00$%

SECTION 1!. To carry out the purposes of this Act, the per"anent insurancefund shall be Three billion pesos &P4,BBB,BBB,BBB!BB(! (As amended by R.A.930! " A#g#st 00$%

The Deposit Insurance +und shall be the capital account of the Corporationand shall principally consist of the followin) &i( the Per"anent Insurance+und8 &ii( assess"ent collections, sub9ect to the chares enu"erated in*ection . &d(8 &iii( reserves for insurance and nancial assistance losses8 and&iv( retained earnins) Pro&ided, That the reserves for insurance and nancial

assistance losses and retained earnins shall be "aintained at a reasonablelevel to ensure capital ade2uacy) Pro&ided! *#rt1er , That the Corporation "ay,within two &0( years fro" the passae of this Act, and every ve &'( yearsthereafter, conduct a study on the need to ad9ust the a"ount of thePer"anent Insurance +und, insurance cover, assess"ent rate and assess"entbase, and thereafter "ake the necessary reco""endation to Conress! +orthis purpose, the Corporation "ay hire the services of actuarial consultants todeter"ine, a"on others, the a7ordability of assess"ent rates, analysis andevaluation of insurance risk, and advisability of i"posin varyin assess"entrates or insurance cover of di7erent bank cateories!(As added by R.A. 930! " A#g#st 00$%

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PAYMENT OF INSURED DEPOSITS

Section "0 (b% 5 (Amended by P./. "9$0! ) #ne "9$ repealed by R.A. 930!" A#g#st 00$%

SECTION 1". 6henever an insured bank shall have been closed by theEonetary %oard pursuant to *ection 4B of ;!A!


15/23

*#rt1ermore, That the period shall not apply if the validity of the clai" re2uiresthe resolution of issues of facts and or law by another o5ce, body or aencyincludin the case "entioned in the rst proviso or by the Corporationtoether with such other o5ce, body or aency!(As amended by R.A. 930! "

A#g#st 00$%

SECTION 1%. The Corporation, upon pay"ent of any depositor as providedfor in subsection &c( of this *ection4, shall be subroated to all rihts of thedepositor aainst the closed bank to the e$tent of such pay"ent! *uchsubroation shall include the riht on the part of the Corporation to receivethe sa"e dividends and pay"ents fro" the proceeds of the assets of suchclosed bank and recoveries on account of stockholders: liability as would havebeen payable to the depositor on a clai" for the insured deposits but, suchdepositor shall retain his clai" for any uninsured portion of his deposit! Allpay"ents by the Corporation of insured deposits in closed banks partake ofthe nature of public funds, and as such, "ust be considered a preferred creditsi"ilar to ta$es due to the 1ational overn"ent in the order of preferenceunder Article 00@@ of the 1ew Civil Code) Pro&ided! *#rt1er , That thispreference shall be likewise e7ective upon li2uidation proceedins already

co""enced and pendin as of the approval of this Act, where no distributionof assets has been "ade! (As amended by P./. "9$0! ) #ne "9$ R.A.)$00! "3 April "99 ren#mbered *rom Sec. "0(d% by R.A. 930! " A#g#st00$%

SECTION 1'.

a. The Corporation shall co""ence the deter"ination of insured depositsdue the depositors of a closed bank upon its actual takeover of theclosed bank! The Corporation shall ive notice to the depositors of theclosed bank of the insured deposits due the" by whatever "eansdee"ed appropriate by the %oard of Directors) Provided, That theCorporation shall publish the notice once a week for at least three &4(

consecutive weeks in a newspaper of eneral circulation or, whenappropriate, in a newspaper circulated in the co""unity orco""unities where the closed bank or its branches are located! (Asadded by R.A. 930! " A#g#st 00$%

b. Pay"ent of an insured deposit to any person by the Corporation shalldischare the Corporation, and pay"ent of transferred deposit to anyperson by the new bank or by an insured bank in which a transferreddeposit has been "ade available shall dischare the Corporation andsuch new bank or other insured bank, to the sa"e e$tent that pay"entto such person by the closed bank would have dischared it fro"liability for the insured deposit! (Ren#mbered *rom Sec. "" (a% by R.A.930! " A#g#st 00$%

c. >$cept as otherwise prescribed by the %oard of Directors, neither theCorporation nor such other insured bank shall be re2uired to reconi3eas the owner of any portion of a deposit appearin on the records ofthe closed bank under a na"e other than that of the clai"ant, anyperson whose na"e or interest as such owner is not disclosed on therecords of such closed bank as part owner of said deposit, if suchreconition would increase the areate a"ount of the insureddeposits in such closed bank! (Ren#mbered *rom Sec. "" (b% by R.A.930! " A#g#st 00$%


16/23

d. The Corporation "ay withhold pay"ent of such portion of the insureddeposit of any depositor in a closed bank as "ay be re2uired toprovide for the pay"ent of any liability of such depositor as astockholder of the closed bank, or of any liability of such depositor tothe closed bank or its receiver, which is not o7set aainst a clai" duefro" such bank, pendin the deter"ination and pay"ent of such

liability by such depositor or any other liable therefor! (Ren#mbered*rom Sec. "" (c% by R.A. 930! " A#g#st 00$%

e. Knless otherwise waived by the Corporation, if the depositor in theclosed bank shall fail to clai" his insured deposits with the Corporationwithin two &0( years fro" actual takeover of the closed bank by thereceiver, or does not enforce his clai" led with the corporation withintwo &0( years after the two-year period to le a clai" as "entionedhereinabove, all rihts of the depositor aainst the Corporation withrespect to the insured deposit shall be barred8 however, all rihts ofthe depositor aainst the closed bank and its shareholders or thereceivership estate to which the Corporation "ay have beco"esubroated, shall thereupon revert to the depositor! Thereafter, theCorporation shall be dischared fro" any liability on the insured

deposit! (As amended by R.A. 930! " A#g#st 00$%

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CORPORATE FUNDS

SECTION 1(.

*. Eoney of the Corporation not otherwise e"ployed shall be invested inobliations of the ;epublic of the Philippines or in obliationsuaranteed as to principal and interest by the ;epublic of thePhilippines! (As amended by R.A. 03)! 0$ A#g#st "99 ren#mbered*rom Sec. " by R.A. 930! " A#g#st 00$%

g. The bankin or checkin accounts of the Corporation shall be kept withthe %anko *entral n Pilipinas, with the Philippine 1ational %ank, orwith any other bank desinated as depository or scal aent of thePhilippine overn"ent! (As amended by R.A. 930! " A#g#st 00$%

1. It is hereby declared to be the policy of the *tate that the DepositInsurance +und of the Corporation shall be preserved and "aintainedat all ti"es! Accordinly, all ta$ obliations of the Corporation for aperiod of ve &'( years reckoned fro" the date of e7ectivity of this Actshall be chareable to the Ta$ >$penditure +und &T>+( in the annualeneral Appropriations Act pursuant to the provisions of >$ecutiveHrder 1o! 4, series of #=.8 Provided, That, on the .th year and

thereafter, the Corporation shall be e$e"pt fro" inco"e ta$, nalwithholdin ta$, value-added ta$ on assess"ents collected fro""e"ber banks, and local ta$es! (As added by R.A 9')!9 April 009%

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FINANCIAL ASSISTANCE

http://www.pdic.gov.ph/index.php?nid1=10&nid2=6http://www.pdic.gov.ph/index.php?nid1=10&nid2=6http://www.pdic.gov.ph/index.php?nid1=10&nid2=6http://www.pdic.gov.ph/index.php?nid1=10&nid2=6


17/23

i. 6hen the Corporation has deter"ined that an insured bank is indaner of closin, in order to prevent such closin, the Corporation, inthe discretion of its %oard of Directors, is authori3ed to "ake loans to,or purchase the assets of, or assu"e liabilities of, or "ake deposits in,such insured bank, upon such ter"s and condition as the %oard ofDirectors "ay prescribe, when in the opinion of the %oard of Directors,

the continued operation of such bank is essential to provide ade2uatebankin service in the co""unity or "aintain nancial stability in theecono"y! (Ren#mbered *rom Sec. ") (c% by R.A. 9')! 9 April 009%

The authority of the Corporation under the foreoin pararaph to e$tendnancial assistance to, assu"e liabilities of, purchase the assets of an insuredbank "ay also be e$ercised in the case of a closed insured bank if theCorporation nds that the resu"ption of operations of such bank is vital to theinterests of the co""unity, or a severe nancial cli"ate e$ists whichthreatens the stability of a nu"ber of banks possessin sinicant resources)Provided, That the reopenin and resu"ption of operations of the closed bankshall be sub9ect to the prior approval of the Eonetary %oard! (As amended byR.A. )$00! "3 April "99%

The Corporation "ay provide any corporation ac2uirin control of, "erin orconsolidatin with or ac2uirin the assets of an insured bank in daner ofclosin in order to prevent such closin or of a closed insured bank in order torestore to nor"al operations, with such nancial assistance as it could providean insured bank under this subsection) Provided, That, within si$ty &.B( daysfro" date of assistance the Corporation shall sub"it a report thereof to theEonetary %oard! (As amended by R.A. )$00! "3 April "99%

The Corporation, prior to the e$ercise of the powers under this *ection, shalldeter"ine that actual payo7 and li2uidation thereof will be "ore e$pensivethan the e$ercise of this power) Provided, That when the Eonetary %oard hasdeter"ined that there are syste"ic conse2uences of a probable failure or

closure of an insured bank, the Corporation "ay rant nancial assistance tosuch insured bank in such a"ount as "ay be necessary to prevent its failureor closure and?or restore the insured bank to viable operations, under suchter"s and conditions as "ay be dee"ed necessary by the %oard of Directors,sub9ect to concurrence by the Eonetary %oard and without additional cost tothe Deposit Insurance +und! (As amended by R.A. 930! " A#g#st 00$%

A syste"ic risk refers to the possibility that failure of one bank to settle nettransactions with other banks will trier a chain reaction, deprivin otherbanks of funds leadin to a eneral shutdown of nor"al clearin andsettle"ent activity! *yste"ic risk also "eans the likelihood of a sudden,une$pected collapse of condence in a sinicant portion of the bankin ornancial syste" with potentially lare real econo"ic e7ects! +inally, the

Corporation "ay not use its authority under this subsection to purchase thevotin or co""on stock of an insured bank but it can enter into and enforcearee"ents that it deter"ines to be necessary to protect its nancialinterests) Pro&ided, That the nancial assistance "ay take the for" of e2uityor 2uasie2uity of the insured bank as "ay be dee"ed necessary by the %oardof Directors with concurrence by the Eonetary %oard) Pro&ided! *#rt1er , Thatthe Corporation shall dispose of such e2uity as soon as practicable! (Asamended by R.A. 930! " A#g#st 00$%


18/23

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AUTHORITY TO BORRO

SECTION 1). The Corporation is authori3ed to borrow fro" the Bangko

Sentral ng Pilipinas and the Bangko Sentral is authori3ed to lend theCorporation on such ter"s as "ay be areed upon by the Corporation andthe Bangko Sentral, such funds as in the 9ud"ent of the %oard of Directors of the Corporation are fro" ti"e to ti"e re2uired for insurance purposes andnancial assistance provided for in *ection #


19/23

REPORTS

SECTION 2+.

7. The Corporation shall annually "ake a report of its operations to the

Conress as soon as practicable after the #st day of Ganuary in eachyear! (Ren#mbered *rom Sec. "' (a% by R.A. 930! " A#g#st 00$%k. The nancial transactions of the Corporation shall be audited by the

Co""ission on Audit in accordance with the principles and proceduresapplicable to co""ercial corporate transactions and under such rulesand reulations as "ay be prescribed by the Co""ission on Audit! Theaudit shall be conducted at the place or places where accounts of theCorporation are nor"ally kept! >$cept as to "atters relatin to thefunction of the Corporation as receiver which shall be sub9ect tovisitorial audit only, the representatives of the Co""ission on Auditshall have access to all books, accounts, records, reports, les and allother papers, thins, or property belonin to or in use by theCorporation pertainin to its nancial transactions and necessary tofacilitate the audit, and they shall be a7orded full facilities for verifyintransactions with the balances or securities held by depositories, scalaents, and custodians! All such books, accounts, records, reports,les, papers, and property of the Corporation shall re"ain inpossession and custody of the Corporation! (As amended4ren#mbered*rom Sec. "' (b% by R.A. 930! " A#g#st 00$%

l. A report of the Audit for each scal year endin on Gune 4B shall be"ade by the Auditor eneral to the Conress not later than Ganuary #'followin the close of such scal year! Hn or before Dece"ber #'followin such scal year, the Auditor eneral shall furnish theCorporation a short for" report showin the nancial position of theCorporation at the close of scal year! The report to the Conress shallset forth the scope of the audit and shall include a state"ent of assets

and liabilities and surplus or decit8 a state"ent of surplus or decitanalysis8 a state"ent of inco"e and e$penses8 a state"ent of sourcesand application of funds and such co""ents and infor"ation as "aybe dee"ed necessary to infor" Conress of the nancial operationsand condition of the Corporation, toether with such reco""endationswith respect thereto as the Auditor eneral "ay dee" advisable! Thereport shall also show specically any prora", e$penditure, or othernancial transactions or undertakin observed in the course of theaudit, which in the opinion of the Auditor eneral, has been carried onor "ade without authority of law! A copy of each report shall befurnished to the President of the Philippines, to the overnor of the%anko *entral n Pilipinas, and to the Corporation at the ti"esub"itted to the Conress!

(As amended4ren#mbered *rom Sec. "' (c% by R.A. 930! " A#g#st00$%

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SANCTIONS AND PENALTIES

SECTION 21.



20/23

m. >very insured bank shall display at each place of business "aintainedby it a sin or sins, and shall include a state"ent in all itsadvertise"ents to the e7ect that its deposits are insured by theCorporation) Pro&ided, That the %oard of Directors "ay e$e"pt fro"this re2uire"ent advertise"ents which do not relate to deposits orwhen it is i"practical to include such state"ent therein! The %oard of

Directors shall prescribe by reulations the for"s of such sins and the"anner of use! (As amended4ren#mbered *rom Sec. " (a% by R.A.930! " A#g#st 00$%

n. 1o insured bank shall pay any dividend on its capital stock or intereston its capital notes or debentures &if such interest is re2uired to be paidonly out of net prots( or distribute any of its capital assets while itre"ains in default in the pay"ent of any assess"ent due to theCorporation) Pro&ided, That if such default is due to a dispute betweenthe insured bank and the Corporation over the a"ount of suchassess"ent, this subsection shall not apply if such bank shall depositsecurity satisfactory to the Corporation for pay"ent upon naldeter"ination of the issue! (As amended4ren#mbered *rom Sec. " (b%by R.A. 930! " A#g#st 00$%

o. 6ithout prior written consent by the Corporation, no insured bank shall( "ere or consolidate with any bank or institution or &0( assu"eliability to pay any deposits "ade in, or si"ilar liabilities of, any bankor institution or &4( transfer assets to any bank or institution inconsideration of the assu"ption of liabilities for any portion of thedeposits "ade in such insured bank!(As amended by +.,. 90! April "93 ren#mbered *rom Sec. " (c%by R.A. 930!" A#g#st 00$%

p. The Corporation "ay re2uire an insured bank to provide protection andinde"nity aainst burlary, defalcation, losses arisin fro" dischareof duties by, or particular acts of defaults of its directors, o5cers, or

e"ployees, and other si"ilar insurable losses! The %oard of Directorsin consultation with the %anko *entral, shall deter"ine the bondinre2uire"ent as it refers to directors, o5cers and e"ployers of theinsured bank as well as the for" and a"ount of the bond! 6heneverany insured bank refuses to co"ply with any such re2uire"ent theCorporation "ay contract for such protection and add the cost thereofto the assess"ent otherwise payable by such bank! (As amended byR.A. )$00! "3 April "99 R.A. 930! " A#g#st 00$%

8. Any assess"ent payable by an insured bank under this Act shall besub9ect to pay"ent of interest co"puted fro" the date suchassess"ent beca"e due and payable and at the leal rate for loans asprescribed by law or appropriate authority and in case of willful failureor refusal to pay such assess"ent and interest thereon, there shall be

added a penalty e2uivalent to twice the a"ount of interest payable asco"puted herein for each day such violations continue, which theinterest and penalty the Corporation "ay recover for its use) Pro&ided,

That the penalty shall not be applicable under the circu"stancesstated in the provisions of subsection &b( of this *ection! (As amendedby +.,. 90! 0 April "93 R.A. )$00! "3 April "99%

r. The penalty of prision mayor or a ne of not less than +ifty thousandpesos &P'B,BBB!BB( but not "ore than Two "illion pesos


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&P0,BBB,BBB!BB(, or both, at the discretion of the court, shall bei"posed upon any director, o5cer, e"ployee or aent of a bank) (Asamended by R.A. 930!" A#g#st 00$%

". for any willful refusal to sub"it reports as re2uired by law, rulesand reulations8

(As amended by R.A. 930! " A#g#st 00$%

. any un9ustied refusal to per"it e$a"ination and audit of thedeposit records or the a7airs of the institution8 (As amended byR.A. 930! " A#g#st 00$%

3. any willful "akin of a false state"ent or entry in any bankreport or docu"ent re2uired by the Corporation8 (As amendedby R.A. 930! " A#g#st 00$%

$. sub"ission of false "aterial infor"ation in connection with or inrelation to any nancial assistance of the Corporation e$tendedto the bank8 (As added by R.A. 930! " A#g#st! 00$%

'. splittin of deposits or creation of ctitious loans or depositaccounts! (As added by R.A. 930! " A#g#st 00$%

*plittin of deposits occurs whenever a deposit account with anoutstandin balance of "ore than the statutory "a$i"u"a"ount of insured deposit "aintained under the na"e ofnatural or 9uridical persons is broken down and transferred intotwo &0( or "ore accounts in the na"e?s of natural or 9uridicalpersons or entities who have no benecial ownership ontransferred deposits in their na"es within one hundred twentyB( days i""ediately precedin or durin a bankdeclaredbank holiday, or i""ediately precedin a closure order issuedby the Eonetary %oard of the %anko *entral n Pilipinas for the

purpose of availin of the "a$i"u" deposit insurancecoverae8 (As added by R.A. 930! " A#g#st 00$ asamended by R.A. 9')! 9 April 009%

. refusal to allow the Corporation to take over a closed bankplaced under its receivership or obstructin such action of theCorporation8 (As added by R.A. 930! " A#g#st 00$%

). refusal to turn over or destroyin or ta"perin bank records8&As added by ;!A! 4B0, #0 Auust 0BB@(

. fraudulent disposal, transfer or conceal"ent of any asset,property or liability of the closed bank under the receivership ofthe Corporation8 &As added by ;!A! 4B0, #0 Auust 0BB@(

9. violation of, or causin any person to violate, the e$e"ptionfro" arnish"ent, levy, attach"ent or e$ecution providedunder this Act and the 1ew Central %ank Act8(As added by R.A. 930! " A#g#st 00$%

"0. any willful failure or refusal to co"ply with, or violation of anyprovision of this Act, or co""ission of any other irreularities,and?or conductin business in an unsafe or unsound "anner as"ay be deter"ined by the %oard of Directors! (As amended by


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R.A. 930!" A#g#st 00$%

s. The %oard of Directors is hereby authori3ed to i"pose ad"inistrativenes for any act or o"ission enu"erated in the precedin subsection,and for violation of any order, instruction, rule or reulation issued bythe Corporation, aainst a bank and?or any of its directors, o5cers or

aents responsible for such act, o"ission, or violation, in a"ounts as it"ay be deter"ined to be appropriate, but in no case to e$ceed threeti"es the a"ount of the da"aes or costs caused by the transactionfor each day that the violation subsists, takin into consideration theattendant circu"stances, such as the nature and ravity of theviolation or irreularity and the si3e of the bank! (As amended by R.A.930! " A#g#st 00$%

SECTION 22. 1o court, e$cept the Court of Appeals, shall issue anyte"porary restrainin order, preli"inary in9unction or preli"inary "andatoryin9unction aainst the Corporation for any action under this Act! (As added byR.A. 930! " A#g#st 00$%

This prohibition shall apply in all cases, disputes or controversies instituted bya private party, the insured bank, or any shareholder of the insured bank! (Asadded by R.A. 930! " A#g#st 00$%

The *upre"e Court "ay issue a restrainin order or in9unction when the"atter is of e$tre"e urency involvin a constitutional issue, such that unlessa te"porary restrainin order is issued, rave in9ustice and irreparable in9urywill arise! The party applyin for the issuance of a restrainin order orin9unction shall le a bond in an a"ount to be $ed by the *upre"e Court,which bond shall accrue in favor of the Corporation if the court should nallydecide that the applicant was not entitled to the relief souht!(As added by R.A. 930! " A#g#st 00$%

Any restrainin order or in9unction issued in violation of this *ection is voidand of no force and e7ect and any 9ude who has issued the sa"e shall su7erthe penalty of suspension of at least si$ty &.B( days without pay! (As added by R.A. 930! " A#g#st 00$%

SECTION 2!. The Corporation "ay be reorani3ed by the %oard of Directorsby adoptin if it so desires, an entirely new sta5n pattern or orani3ationalstructure to suit the operations of the Corporation under this Act! 1opreferential or priority riht shall be iven to or en9oyed by any personnel forappoint"ent to any position in the new sta5n pattern nor shall anypersonnel be considered as havin prior or vested rihts with respect toretention in the Corporation or in any position which "ay be created in the

new sta5n pattern, even if he should be the incu"bent of a si"ilar positionprior to reorani3ation! The reorani3ation shall be co"pleted within si$ &.("onths after the e7ectivity of this Act! Personnel who are not retained aredee"ed separated fro" the service! (As added by R.A. 930!" A#g#st 00$%

SECTION 2". The %oard of Directors is hereby authori3ed to provideseparation incentives, and all those who shall retire or be separated fro" theservice on account of reorani3ation under the precedin section shall be


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entitled to such incentives which shall be in addition to all ratuities andbenets to which they "ay be entitled under e$istin laws! (As added by R.A.930! " A#g#st 00$%

SECTION 2%. The words “Central %ank” and the “Central %ank of thePhilippines” wherever they appear in ;epublic Act 1o! 4'#, as a"ended, is

hereby replaced with %anko *entral and?or %anko *entral n Pilipinas,respectively!(As added by R.A. 930! " A#g#st 00$%

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SEPARABILITY CLAUSE

SECTION 2'. *eparability Clause! - If any provision or section of this Act orthe application thereof to any person or circu"stances is held invalid, theother provisions or sections of this Act, in the application of such provision orsection to other persons or circu"stances, shall not be a7ected thereby! (Asadded

by R.A. 930! " A#g#st 00$%

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REPEALIN$ CLAUSE

SECTION 2(. ;epealin Clause! - All acts or parts of acts and e$ecutiveorders, ad"inistrative orders, or parts thereof which are inconsistent with theprovisions of this Act are hereby repealed! (As addedby R.A. 930! " A#g#st 00$%

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EFFECTI#ITY CLAUSE

SECTION 2). E-ct/t0 Ca3-"! - This Act shall take e7ect fteen '(days followin the co"pletion of its publication in the H5cial a3ette or intwo &0( newspapers of eneral circulation! (As added by R.A. 930! " A#g#st00$%
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Documents

PDIC Law (Amended)