REPUBLIC ACT NO. 3591 - AN ACT
ESTABLISHING THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, DEFINING ITS
POWERS AND DUTIES AND FOR OTHER PURPOSES
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.
Sec. 2. The powers and functions of the Corporation
shall be vested in a board of directors consisting of three (3) members
one of whom shall be the governor of the Central Bank of the
Philippines and two of whom shall be citizens of the Republic of the
Philippines to be appointed by the President of the Philippines with
the advice and consent of the Commission on Appointments. One of the
appointive members shall be the Chairman of the Board of Directors of
the Corporation who shall be appointed on a full time basis for a term
of six (6) years at an annual salary of twenty-four thousand pesos
(P24,000.00). The other appointive member, who shall be appointed for a
term of four (4) years and the Governor of the Central Bank shall each
receive a per diem of not exceeding fifty pesos (P50.00) for each day
of meeting actually attended by them but in no case shall each of them
receive more than five hundred pesos (P500.00) a month. In the event of
a vacancy in the Office of the Governor of the Central Bank of the
Philippines, and pending the appointment of his successor or during the
absence of the Governor, the Acting Governor of the Central Bank of the
Philippines shall act as member of the Board of Director. In the event
of a vacancy in the Office of the Chairman of the Board of Directors
and pending the appointment of his successor, the Governor of the
Central Bank of the Philippines shall act as Chairman. The members of
the Board of Directors shall be ineligible during the time they are in
office and for a period of two years thereafter to hold any office,
position or employment in any insured bank, except that this
restriction shall not apply to any member who has served the full term
for which he was appointed. No member of the Board of Directors shall
be an officer or director of any insured bank; and before entering upon
his duties as member of the Board of Directors he shall certify under
oath that he has complied with this requirement and such certification
shall be filed with the Secretary of the Board of Directors. Any
vacancy in the Board created by the death, resignation, or removal of
an appointive member shall be filled by the appointment of new member
to complete the unexpired period of the term of the member
concerned.
The Board of Directors shall have the authority:
1. To prepare and issue rules and regulations as it
considers necessary for the effective discharge of its
responsibilities;
2. To direct the management, operations and
administration of the Corporation;
3. To appoint, fix the remunerations and remove all
officers and employees of the Corporation, subject to the Civil Service
Law; and
4. To authorize such expenditures by the Corporation
as are in the interest of the effective administration and operation of
the Corporation.
Sec. 3. As used in this Act —
(a) The term "Board of Directors" means the Board of
Directors of the Corporation.
(b) The term "Bank" and "Banking Institution" shall
be synonymous and interchangeable and shall include banks, commercial
banks, savings banks, mortgage banks, rural banks, development banks,
cooperative banks, trust companies, branches and agencies in the
Philippines of foreign banks and all other companies, corporations,
partnership performing banking functions in the Philippines.
(c) The term "receiver" includes a receiver,
liquidating agent, conservator, commission, person, or other agency
charged by law with the duty of winding up the affairs of a bank.
(d) The term "insured bank" means any bank the
deposit of which are insured in accordance with the provision of this
Act;
(e) The term "non-insured bank" means any bank the
deposit of which are not insured.
The term "deposit" means the unpaid balance of
money or its equivalent received by a bank in the usual course of
business and for which it has given or is obliged to give credit to a
commercial, checking, savings, time or thrift account or which is
evidenced by its certificate of deposit, and trust funds held by such
bank whether retained or deposited in any department of such bank or
deposited in another bank, together with such other obligations of a
bank as the Board of Directors shall find and shall prescribe by
regulations to be deposit liabilities of the Bank: Provided, That any
obligation of a bank which is payable at the office of the bank located
outside of the Philippines shall not be a deposit for any of the
purposes of this Act or included as part of the total deposits or of
the insured deposit: Provided, further, That any insured bank which is
incorporated under the laws of the Philippines which maintains a branch
outside the Philippines may elect to include for insurance its deposit
obligation payable only at such branch.
(g) The term "insured deposit" means the net amount
due to any depositor for deposits in an insured bank (after deducting
offsets) less any part thereof which is in excess of P10,000. Such net
amount shall be determined according to such regulations as the Board
of Directors may prescribe and in determining the amount due to any
depositor there shall be added together all deposits in the bank
maintained in the same capacity and the same right for his benefit or
in his own name or in the names of others.
(h) The term "transfer deposit" means a deposit in an
insured bank made available to a depositor by the Corporation as
payment of insured deposit of such depositor in a closed bank and
assumed by another insured bank.
(i) The term "trust funds" means funds held by an
insured bank in a fiduciary capacity and includes without being limited
to, funds held as trustee, executor, administrator, guardian, or agent.
Sec. 4. Any bank or banking institution which is
engaged in the business of receiving deposits as herein defined on the
effective date of this Act, or which thereafter may engage in the
business of receiving deposits, may insure its deposit liabilities with
the Corporation. Before approving the application of such bank to
become an insured bank, the Board of Directors shall give consideration
to the factors enumerated in Sec. 5 and shall determine upon the
basis of a thorough examination of such bank, that its assets in excess
of its capital requirements are adequate to enable it to meet all its
liabilities to depositors and other creditors as shown by the books of
the bank.
Sec. 5. The factors to be considered by the Board of
Directors under the preceding section shall be the following: the
financial history and condition of the Bank, the adequacy of its
capital structure, its future earning prospects, the general character
of its management, the convenience and needs of the community to be
served by the Bank and whether or not its corporate powers are
consistent with the purposes of this Act.
Sec. 6. (a) The assessment rate shall be determined
by the Board of Directors: Provided, That the assessment rate shall not
exceed one-twelfth of one per centum per annum. The semiannual
assessment for each insured bank shall be in the amount of the product
of one-half (1/2) the assessment rate multiplied by the assessment
base. The assessment base shall be the amount of the liability of the
bank for deposits, according to the definition of the term "deposit" in
and pursuant to subsection (f) of Sec. 3 without any deduction for
indebtedness of depositors: Provided, further, That the bank —
(1) may deduct (i) from the deposit balance due to an
insured bank the deposit balance due from such insured bank (other than
trust funds deposited by it in such bank) which is subject to an
immediate withdrawal; and (ii) cash items as determined by either of
the following methods, at the option of the bank: (aa) by multiplying
by 2 the total of the cash items forwarded for collection on the
assessment base days (being the days on which the average deposits are
computed) and cash items held for clearings at the close of business on
said days, which are in the process of collection and which the bank
has paid in the regular course of business or credited to deposit
accounts; or (bb) by deducting the total of cash items forwarded for
collection on the assessment base days and cash items held for clearing
at the close of business on said days, which are in the process of
collection and which the bank has paid in the regular course of
business or credited to deposit accounts, plus such uncollected items
paid or credited on preceding days which are in the process of
collection: Provided, That the Board of Directors may define the terms
"cash items", "process of collection", and "uncollected items" and
shall fix the maximum period for which any such item may be deducted;
and
(2) may exclude from its assessment base (i) drafts
drawn by it on deposit accounts in other banks which are issued in the
regular course of business; and the amount of devices or authorizations
issued by it for cash letters received, directing that its deposit
account in the sending bank be charged with the amount thereof; and
(ii) cash funds which are received and held solely for the purpose of
securing a liability to the bank but not in an amount in excess of such
liability, and which are not subject to withdrawal by the obligor and
are carried in a special non-interest bearing account designated to
properly show their purpose.
Each insured bank, as a condition to the right to make any such
deduction or exclusion in determining its assessment base, shall
maintain such records as will readily permit verification of the
correctness thereof. The semiannual assessment base for one semiannual
period shall be the average of the assessment base of the bank as of
the close of business on March thirty-one and June thirty, and the
semiannual assessment base for the other semiannual period shall be the
average of the assessment base of the bank as of the close of business
on September thirty and December thirty-one: Provided, That when any of
said days is a nonbusiness day or a legal holiday, either National or
Provincial, the preceding business day shall be used. The certified
statements required to be filed with the Corporation under subsections
(b) and (c) of this section shall be in such form and set forth such
supporting information as the Board of Directors shall prescribe. The
assessment payments required from insured banks under subsections (b)
and (c) of this section shall be made in such manner and at such time
or times as the Board of Directors shall prescribe, provided the time
or times so prescribed shall not be later than sixty days after filing
the certified statement setting forth the amount of assessment.
(b) On or before the 15th of July of each year, each
insured bank shall file with the Corporation a certified statement
showing for the six months ending on the preceding June thirty the
amount of the assessment base and the amount of the semiannual
assessment due to the Corporation for the period ending on the
following December thirty-one, determined in accordance with subsection
(a) of this section, which shall contain or be verified by a written
declaration that it is made under the penalties of perjury. Each
insured bank shall pay to the Corporation the amount of the semiannual
assessment it is required to certify. On or before the 15th day of
January of each year, each insured bank shall file with the Corporation
a similar certified statement for the six months ending on the
preceding December thirty-one and shall pay to the Corporation the
amount of the semiannual assessment for the period ending on the
following June thirty which it is required to certify.
(c) Each bank which becomes an insured bank shall not
be required to file any certified statement or pay any assessment for
the semiannual period in which it becomes an insured bank. On the
expiration of such period, each such bank shall comply with the
provisions of subsection (b) of this section except that the semiannual
assessment base for its first certified statement shall be the
assessment base of the bank as of the close of business on the
preceding June thirty or December thirty-one, whichever is applicable,
determined in accordance with subsection (a) of this section. If such
bank has assumed the liabilities for deposits of another bank or banks,
it shall include such liabilities in its assessment base. The first
certified statement shall show as the amount of the first semiannual
assessment due to the Corporation, an amount equal to the product of
one-half of the annual assessment rate multiplied by such assessment
base.
(d) As of December thirty-one nineteen hundred
sixty-four, and as of December thirty-one of each calendar year
thereafter, the Corporation shall transfer 40 per centum of its net
assessment income to its capital account and the balance of the net
assessment income shall be credited pro rata to the insured banks based
upon the assessment of each bank becoming due during said calendar
year. Each year such credit shall be applied by the Corporation toward
the payment of the total assessment becoming due for the semiannual
assessment period beginning the next ensuing July 1 and any excess
credit shall be applied upon the assessment next becoming due. The term
"net assessment income" as used therein means the total assessments
which becomes due during the calendar year less (1) the operating costs
and expenses of the Corporation for the calendar year; (2) additions to
reserve to provide for insurance losses during the calendar year,
except that any adjustments to reserve which result in a reduction of
such reserve shall be added; and (3) the insurance losses sustained in
said calendar year plus losses from any preceding years in excess of
such reserves. If the above deductions exceed in amount the total
assessments which become due during the calendar year, the amount of
such excess shall be restored by deduction from total assessments
becoming due in subsequent years.
(e) The Corporation (1) may refund to an insured bank
any payment of assessment in excess of the amount due to the
Corporation or (2) may credit such excess toward the payment of the
assessment next becoming due from such bank and upon succeeding
assessments until the credit is exhausted.
Any insured bank which fails to file any
certified statement required to be filed by it in connection with
determining the amount of any assessment payable by the bank to the
Corporation may be compelled to file such statement by mandatory
injunction or other appropriate remedy in a suit brought for such
purpose by the Corporation against the bank and any officer or officers
thereof in any court of the Philippines of competent jurisdiction in
which such bank is located.
(g) The Corporation, in a suit brought in any court
of competent jurisdiction, shall be entitled to recover from any
insured bank the amount of any unpaid assessment lawfully payable by
such insured bank to the Corporation, whether or not such bank shall
have filed any such certified statement and whether or not suit shall
have been brought to compel the bank to file any such statement. No
action or proceeding shall be brought for recovery of any assessment
due to the Corporation or for the recovering of any amount paid to the
Corporation in excess of the amount due to it, unless such action or
proceeding shall have been brought within five years after the right
accrued for which the claim is made, except where the insured bank has
made or filed with the Corporation a false or fraudulent certified
statement with the intent of evade, in a whole or in part, the payment
of assessment, in which case the claim shall not have been deemed to
have accrued until the discovery by the Corporation that the certified
statement is false fraudulent.
(h) Should any insured bank fail or refuse to pay any
assessment required to be paid by such bank under any provision of this
Act, and should the bank not correct such failure or refusal within
thirty days after written notice has been given by the Corporation to
an officer of the bank, citing this subsection, and stating that the
bank has failed or refused to pay as required by law the insured status
of such bank shall be terminated by the Board of Directors. The
remedies provided in this subsection and in the two preceding
subsections shall not be construed as limiting any other remedies
against an insured bank but shall be in addition thereto.
(i) Trust funds held by an insured bank in a
fiduciary capacity whether held in trust or deposited in any other
department or in another bank shall be insured like other forms of
deposits, in an amount not to exceed P10,000 for each trust estate, and
when deposited by the fiduciary bank in another insured bank such trust
funds shall be similarly insured to the fiduciary bank according to the
trust estates represented. Notwithstanding any other provision of this
Act, such insurance shall be separate from the additional to that
covering other deposits of the owners of such trust funds or the
beneficiaries of such trust estates: Provided, That where the fiduciary
bank deposits any of such trust funds in other insured banks, the
amount so held by other insured banks on deposit shall not for the
purpose of any certified statement required under subsections (b) and
(c) of this section be considered to be a deposit liability of the
fiduciary bank, but shall be considered to be a deposit liability of
the bank in which such funds are so deposited by such fiduciary bank.
The Board of Directors shall have the power by regulation to prescribe
the manner of reporting and of depositing such trust funds.
Sec. 7. (a) Any insured bank may, upon not less than
ninety days, written notice to the Corporation, and to the Development
Bank of the Philippines if it owns or holds as pledges any preferred
stock, capital notes, or debentures of such bank, terminate its status
as an insured bank. Whenever the Board of Directors shall find that an
insured bank or its directors or trustees have continued unsafe or
unsound practices in conducting the business of the bank or which have
knowingly or negligently permitted any of its officers or agents to
violate any provisions of any law or regulation to which the insured
bank is subject, the Board of Directors shall first give to the Central
Bank of the Philippines a statement with respect to such practices or
violations for the purpose of securing the correction thereof and shall
give a copy thereof to the bank. Unless such correction shall be made
within one hundred twenty days or such shorter period of time as the
Central Bank of the Philippines shall require, the Board of Directors,
if it shall determine to proceed further, shall give to the bank not
less than thirty days' written notice of intention to determine the
status of the bank as an insured bank, and shall fix a time and place
for a hearing before the Board of Directors or before a person
designated by it to conduct such hearing, at which evidence may be
produced, and upon such evidence the Board of Directors shall make
written findings which shall be conclusive. Unless the bank shall
appear at the hearing by a duly authorized representative, it shall be
deemed to have consented to the termination of its status as an insured
bank. If the Board of Directors shall find that any unsafe or unsound
practice or violation specified in such notice has been established and
has not been corrected within the time above prescribed in which to
make such correction, the Board of Directors may order that the insured
status of the bank be terminated on a date subsequent to such finding
and to the expiration of the same specified in such notice of
intention. The Corporation may publish notice of such termination and
the bank shall give notice of such termination to each of the
depositors at his last address of record on the books of the bank, in
such a manner and at such at time as the Board of Directors may find to
be necessary and may order for the protection of the depositors. After
the termination of the insured status of any bank under the provisions
of this subsection, the insured deposits of each depositor in the bank
on the date of such termination, less all subsequent withdrawals from
any deposits of such depositor, shall continue for a period of two
years to be insured, and the bank shall continue to pay to the
Corporation assessments as in the case of an insured bank during such
period. No additions to any such deposits and no new deposits in such
bank made after the date of such termination shall be insured by the
Corporation, and the bank shall not advertise or hold itself out as
having insured deposits unless in the same connection it shall also
state equal prominence that such additions to deposits and new deposits
made after such date are not so insured. Such bank shall, in all other
respects, be subject to the duties and obligations of an insured bank
for the period of two years from the date of such termination, and in
the event that such bank shall be closed on account of insolvency
within such period of two years, the Corporation shall have the same
powers and rights with respect to such bank as in case of an insured
bank.
(b) Notwithstanding any other provision of law,
whenever the Board of Directors shall determine that an insured banking
institution is not engaged in the business of receiving deposits, the
Corporation shall notify the banking institution that its insured
status will terminate at the expiration of the first full semiannual
assessment period following such notice. A finding by the Board of
Directors that a banking institution is not engaged in the business of
receiving deposits shall be conclusive. The Board of Directors shall
prescribe the notice to be given by the banking institution of such
termination and the Corporation may publish notice thereof. Upon the
termination of the insured status of any such banking institution, its
deposits shall thereupon cease to be insured and the banking
institution shall thereafter be relieved of all future obligations to
the Corporation, including the obligation to pay future assessments.
(c) Whenever the liabilities of an insured bank for
deposits shall have been assumed by another insured bank or banks, the
insured status of the bank whose liabilities are so assumed shall
terminate on the date of receipt by the Corporation of satisfactory
evidence of such assumption with like effect as if its insured status
had been terminated on said date by the Board of Directors after
proceedings under subsection (a) of this section: Provided, That if the
bank whose liabilities are so assumed gives to its depositors notice of
such assumption within thirty days after such assumption takes effect,
by publication or by any reasonable means, in accordance with
regulations to be prescribed by the Board of Directors, the insurance
of its deposits shall terminate at the end of six months from the date
such assumption takes effect. Such bank shall be subject to the duties
and obligations of an insured bank for the period its deposits are
insured: Provided, further, That if the deposits are assumed by a newly
insured bank, the bank whose deposits are assumed shall not be required
to pay any assessment upon the deposits which have been so assumed
after the semiannual period in which the assumption takes effect.
Sec. 8. The Corporation as a corporate body shall
have the power —
First. — To adopt and use a corporate seal.
Second. — To have succession until dissolved by an Act of Congress.
Third. — To make contracts.
Fourth. — To sue and be sued, complain and defend, in any court of law
in the Philippines. All suits of a civil nature to which the
corporation shall be a part shall be deemed to arise under the laws of
the Philippines. No attachment or execution shall be issued against the
Corporation or its property before final judgment in any suit, action,
or proceeding in any court. The Board of Directors shall designate an
agent upon whom service of process may be made in any province or city
or jurisdiction in which any insured bank is located.
Fifth. — To appoint by its Board of Directors such officers and
employees as are not otherwise provided for in this Act to define their
duties, fix their compensation, require bonds of them and fix penalty
thereof and to dismiss such officers and employees for cause.
Sixth. — To prescribe, by its Board of Directors, by-laws not
inconsistent with law, regulating the manner in which its general
business may be conducted, and the privileges granted to it by law may
be exercised and enjoyed.
Seventh. — To exercise by its Board of Directors, or duly authorized
officers or agents, all powers specifically granted by the provisions
of this Act, and such incidental powers as shall be necessary to carry
on the powers so granted.
Eighth. — To make examination of and to require information and reports
from banks, as provided in this Act.
Ninth. — To act as receiver.
Tenth. — To prescribe by its Board of Directors such rules and
regulations as it may deem necessary to carry out the provisions of
this Act.
Sec. 9. (a) The Board of Directors shall administer
the affairs of the Corporation fairly and impartially and without
discrimination. the Corporation shall be entitled to the free use of
Philippine mails in the same manner as the other offices of the
national government.
(b) The Board of Directors shall appoint examiners
who shall have power, on behalf of the Corporation to examine any
insured bank or any bank making application to become an insured bank,
whenever in the judgment of the Board of Directors an examination of
the bank is necessary. Each such examiner shall have power to make a
thorough examination of all the affairs of the bank and in doing so he
shall have power to administer oaths and to examine and take and
preserve the testimony of any of the officers and agents thereof, and
shall make a full and detailed report of the condition of the bank to
the Corporation. The Board of Directors in like manner shall appoint
claim agents who shall have power to investigate and examine all claims
for insured deposits and transferred deposits. Each claim agent shall
have power to administer oaths and to examine under oath and take and
preserve the testimony of any person relating to such
claims.
(c) Each insured bank shall make to the Corporation
reports of condition in such form and at such times as the Board of
Directors may require such reports to be published in such manner, not
inconsistent with any applicable law, as it may direct. Every such bank
which fails to make or publish any such report within such time, not
less than five days, as the Board of Directors may require, shall be
subject to a penalty of not more than P100 for each day of such failure
recoverable by the Corporation of its use.
(d) The Corporation shall have access to reports of
examination made by, and reports of condition made to the
Superintendent of Banks or the Governor of the Central Bank of the
Philippines, and the Superintendent of Banks or the Governor of the
Central Bank of the Philippines shall also have access to reports of
examination made on behalf of, and reports of condition made to the
Corporation.
(e) The members of the Board of Directors and the
officers and employees of the Corporation are prohibited from revealing
any information relating to the condition or business of any insured
bank and any member of the Board of Directors, officer or employee of
the Corporation violating this provision shall be held liable for any
loss or injury suffered by the Corporation.
Sec. 10. (a) A permanent insurance fund in the amount
of P5,000,000 to be appropriated from the General Fund is hereby
created to be used by the Corporation to carry out the purposes of this
Act: Provided, That the maximum amount of the insured deposit of any
depositor shall be P10,000.
(b) For the purposes of this Act an insured bank
shall be deemed to have been closed on account of insolvency in any
case in which it has been closed for the purpose of liquidation without
adequate provision being made for payment of its depositors.
(c) Whenever an insured bank shall have been closed
on account of insolvency, payment of the insured deposits in such bank
shall be made by the Corporation as soon as possible either (1) by cash
or (2) by making available to each depositor a transferred deposit in
another insured bank in an amount equal to the insured deposit of such
depositor: Provided, That the Corporation, in its discretion, may
require proof of claims to be filed before paying the insured deposit,
and that in any case where the Corporation is not satisfied as to the
validity of a claim for an insured deposit, it may require the final
determination of a court of competent jurisdiction before paying such
claim.
(d) The Corporation, upon the payment of any
depositor as provided for in subsection (c) of this section shall be
subrogated to all rights of the depositor against the closed bank to
the extent of such payment. Such subrogation shall include the right on
the part of the Corporation to receive the same dividends from the
proceeds of the assets of such closed bank and recoveries on account of
stockholders' liability as would have been payable to the depositor on
a claim for the insured deposit, but such depositor shall retain his
claim for any uninsured portion of his deposit.
Sec. 11. (a) Payment of an insured deposit to any
person by the Corporation shall discharge the Corporation, and payment
of a transferred deposit to any person by the new bank or by an insured
bank in which a transferred deposit has been made available shall
discharge the Corporation and such new bank or other insured bank, to
the same extent that payment to such person by the closed bank would
have discharged it from liability for the insured deposit.
(b) Except as otherwise prescribed by the Board of
Directors, neither the Corporation nor such other insured bank shall be
required to recognize as the owner of any portion of a deposit
appearing on the records of the closed bank under a name other than
that of the claimant, any person whose name or interest as such owner
is not disclosed on the records of such closed bank as part owner of
said deposit, if such recognition would increase the aggregate amount
of the insured deposits in such closed bank.
(c) The Corporation may withhold payment of such
portion of the insured deposit of any depositor in a closed bank as may
be required to provide 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 or its receiver, which is not offset
against the claim due from such bank, pending the determination and
payment of such liability by such depositor or any other person liable
therefor.
(d) If, after the Corporation shall have given at
least three months notice to the depositor by mailing a copy thereof to
his last-known address appearing on the records of the closed bank, any
depositor in the closed bank shall fail to claim his insured deposit
from the Corporation within eighteen months after the Monetary Board of
the Central Bank of the Philippines or the proper court shall have
ordered the conversion of the assets of such closed bank into money,
all rights of the depositor against the Corporation with respect to the
insured deposit shall be barred, and all rights of the depositor
against the closed bank and its shareholders or the receivership estate
to which the Corporation may have become subrogated, shall thereupon
revert to the depositor.
Sec. 12. (a) Money of the Corporation not otherwise
employed shall be invested in obligations of the Republic of the
Philippines or in obligations guaranteed as to principal and interest
by the Republic of the Philippines: Provided, That the Corporation
shall not sell or purchase any such obligations for its own account and
in its own right and interest, at any one time aggregating in excess of
P100,000, without the approval of the Insurance Commissioner: And
Provided, further, That the Insurance Commissioner may waive the
requirement of his approval with respect to any transaction or classes
of transactions subject to the provisions of this subsection for the
period of time and under such conditions as he may determine.
(b) The banking or checking accounts of the
Corporation shall be kept with the Central Bank of the Philippines,
with the Philippine National Bank, or with any other bank designated as
depositary or fiscal agent of the Philippine Government.
(c) When the Corporation has determined that an
insured bank is in danger of closing, in order to prevent such closing,
the Corporation, in the discretion of its Board of Directors is
authorized to make loans to, or purchase the assets of, or make
deposits in, such insured bank, upon such terms and conditions as the
Board of Directors may prescribe, when in the opinion of the Board of
Directors the continued operation of such bank is essential to provide
adequate banking service in the community. Such loans and deposits may
be in subordination to the rights of depositors and other creditors.
Sec. 13. The corporation is authorized to borrow from
the Central Bank of the Philippines and the Central Bank is authorized
and directed to loan the Corporation on such terms as may be fixed by
the Corporation and the Central Bank, such funds as in the judgment of
the Board of Directors of the Corporation are from time to time
required for insurance purposes not exceeding in the aggregate of one
hundred million pesos outstanding at any one time: Provided, That the
rate of interest to be charged in connection with any loan made
pursuant to this section shall not be less than the current average
rate on outstanding marketable and nonmarketable obligations of the
Republic of the Philippines as of the last day of the month preceding
the making of such loan. Any such loan shall be used by the Corporation
solely in carrying out its functions with respect to such
insurance.
Sec. 14. All notes, debentures, bonds, or such
obligations issued by the Corporation shall be exempt from taxation.
Sec. 15. (a) The Corporation shall annually make a
report of its operations to the Congress as soon as practicable after
the 1st day of January in each year.
(b) The financial transactions of the Corporation
shall be audited by the General Auditing Office in accordance with the
principles and procedures applicable to commercial corporate
transactions and under such rules and regulations as may be prescribed
by the Auditor General. The audit shall be conducted at the place or
places where accounts of the Corporation are normally kept. The
representatives of the General Auditing Office shall have access to all
books, accounts, records, reports, files, and all other papers, things,
or property belonging to or in use by the Corporation pertaining to its
financial transactions and necessary to facilitate the audit, and they
shall be afforded full facilities for verifying transactions with the
balances or securities held by depositaries, fiscal agents, and
custodians. All such books, accounts, records, reports, files, papers,
and property of the Corporation shall remain in possession and custody
of the Corporation.
(c) A report of the Audit for each fiscal year ending
on June 30 shall be made by the Auditor General to the Congress not
later than January 15 following the close of such fiscal year. On or
before December 15 following such fiscal year the Auditor General shall
furnish the Corporation a short form report showing the financial
position of the Corporation at the close of fiscal year. The report to
the Congress shall set forth the scope of the audit and shall include a
statement of assets and liabilities and surplus or deficit; a statement
of surplus or deficit analysis; a statement of income and expenses; a
statement of sources and application of funds and such comments and
information as may be deemed necessary to inform Congress of the
financial operations and condition of the Corporation, together with
such recommendations with respect thereto as the Auditor General may
deem advisable. The report shall also show specifically any program,
expenditure, or other financial transactions or undertaking observed in
the course of the audit, which in the opinion of the Auditor General,
has been carried on or made without authority of law. A copy of each
report shall be furnished to the President of the Philippines, to the
Governor of the Central Bank of the Philippines, and to the Corporation
at the time submitted to the Congress.
Sec. 16. (a) Every insured bank shall display at each
place of business maintained by it a sign or signs, and shall include a
statement to the effect that its deposits are insured by the
Corporation in all of its advertisements: Provided, That the Board of
Directors may exempt from this requirement advertisements which do not
relate to deposits or when it is impractical to include such statement
therein. The Board of Directors shall prescribe by regulation the forms
of such signs and the manner of display and the substance of such
statements and the manner of use. For each day an insured bank
continues to violate any provisions of this subsection or any lawful
provisions of said regulations, it shall be subject to a penalty of not
more than P100, which the Corporation may recover for its use.
(b) No insured bank shall pay any dividend on its
capital stock or interest on its capital notes or debentures (if such
interest is required to be paid only out of net profits) or distribute
any of its capital assets while it remains in default in the payment of
any assessment due to the Corporation; and any director or officer of
any insured bank who participates in the declaration or payment of any
such dividend or interest or in any such distribution shall, upon
conviction, be fined not more than P1,000 or imprisoned not more than
one year, or both: Provided, That if such default is due to a dispute
between the insured bank and the Corporation over the amount of such
assessment, this subsection shall not apply, if such bank shall deposit
security satisfactory to the Corporation of payment upon final
determination of the issue.
(c) Without prior written consent by the Corporation,
no insured bank shall (1) merge or consolidate with any noninsured bank
or institution or convert into a noninsured bank or institution or (2)
assume liability to pay any deposits made in, or similar liabilities
of, any noninsured bank or institution or (3) transfer assets to any
noninsured bank or institution in consideration of the assumption of
liabilities for any portion of the deposits made in such insured bank.
(d) The Corporation may require any insured bank to
provide protection and indemnity against burglary, defalcation, and
other similar insurable losses. Whenever any insured bank refuses to
comply with any such requirement the Corporation may contract for such
protection and indemnity and add the cost thereof to the assessment
otherwise payable by such bank.
(e) Any insured bank which wilfully fails or refuses
to file any certified statement or pay any assessment required under
this Act shall be subject to a penalty of not more than P100 for each
day that such violations continue, which penalty the Corporation may
recover for its use: Provided, That this subsection shall not be
applicable under the circumstances stated in the provisions of
subsection (b) of this section.
Sec. 17. Except with the written consent of the
Corporation, no person shall serve as a director, officer, or employee
of an insured bank who has been convicted, or who is hereafter
convicted, of any criminal offense involving dishonesty or a breach of
trust. For each willful violation of this prohibition, the bank
involved shall be subject to a penalty of not more than P100 for each
day this prohibition is violated, which the Corporation may recover for
its use.
Sec. 18. If any provision or section of this Act or
the application thereof to any person or circumstances is held invalid,
the other provisions or sections of this Act, in the application of
such provision or section to other persons or circumstances shall not
be affected thereby.
Sec. 19. All Acts or parts of Acts and executive
orders, administrative orders, or parts thereof which are inconsistent
with the provisions of this Act are hereby repealed.
Sec. 20. This Act shall take effect upon approval.
The Philippine Deposit Insurance Corporation shall commence business
upon organization of the Board of Directors and certification by the
Treasurer of the Philippines that the Permanent Insurance Fund has been
appropriated.
Approved: June 22, 1963
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