(R.A.

1405, AS AMENDED)
PURPOSE
The purposes of RA 1405 are:
 Encourage deposit in banking institutions; and
 Discourage private hoarding so that banks may lend
such funds and assist in the economic development of
the country.
PROHIBITED ACTS
The following are the prohibited acts in RA 1405:
 Examination/inquiry/looking into all deposits of
whatever nature with banks or banking institutions in
the Philippines (including investment in bonds issued
by the government) by any person, government official
bureau or office (Sec. 2);
 Disclosure by any official or employee of any banking
institution to any unauthorized person of any
information concerning said deposit (Sec. 3)
ACTS NOT COVERED BY THE
PROHIBITION IN SEC. 3
 Non-bank official or employee is not covered by the
prohibition. Neither is disclosure by a bank official or
employee of information about bank deposit in favor
of a co-employee in the course of the performance of
his duties covered by the prohibition.
DEPOSITS COVERED
1. All deposits of whatever nature with banks or
banking institutions found in the Philippines; or
2. Investments in bonds issued by the Philippine
government, its branches, and institutions;
3. Trust accounts
EXCEPTIONS
(Instances where examination or disclosure of information about
deposits can be allowed)
1. Upon written consent of the depositor (RA 1405, Sec.
2);
2. In cases of impeachment;
3. Upon order of competent court in cases of bribery or
dereliction of duty of public officials;
4. In cases where the money deposited or invested is
the subject matter of the litigation.
OTHER EXCEPTIONS
5. Upon order of the Commissioner of Internal Revenue in respect of the
bank deposits of a decedent for the purpose of determining such
decedent’s gross estate;
6. Upon the order of the Commissioner of Internal Revenue in respect of
bank deposits of a taxpayer who has filed an application for
compromise of his tax liability by reason of financial incapacity to pay
his tax liability;
7. The Commissioner of Internal Revenue is authorized to inquire into
bank deposits of a specific taxpayer upon request for tax information
from a foreign tax authority pursuant to an international convention or
agreement on tax matters to which the Philippines is a party;
8. In case of dormant accounts/deposits for at least 10 years under the
Unclaimed Balances Act.
9. The prohibition against examination of bank deposit does not preclude
its garnishment to satisfy a judgment against the depositor;
10. Presidential Commission on Good Government (PCGG) may require
the production of bank records material to its investigation;
11. The Anti-Money Laundering Council (AMLC) may inquire into any
deposit with any bank in case of violation of the RA 9160 or the AMLA
if there is probable cause that it is related to an unlawful activity;
12. The PDIC and the BSP may examine deposit accounts and all
information related to them in case of a finding of unsafe or unsound
banking practices;
13. With court order:
a. In cases of unexplained wealth under Sec. 8 of the Anti-Graft and
Corrupt Practices Act;
b. In cases filed by the Ombudsman and upon the latter’s authority to
examine and have access to bank accounts and records.

14. Without court order: If the AMLC determines that a particular deposit
or investment with any banking institution is related to the following:
a. Hijacking,
b. Kidnapping,
c. Murder,
d. Destructive Arson, and
e. Violation of the Dangerous Drugs Act.
f. Acts of Terrorism or in violation of Human Security Act.
FOREIGN CURRENCY DEPOSITS
 Foreign currency deposits are covered by R.A. 6426
otherwise known as the “Foreign Currency Deposits
Act”.

SECRECY OF FOREIGN CURRENCY DEPOSITS

 GR: Foreign currency deposits cannot be inquired or
looked into. All foreign currency deposits are
absolutely confidential.
 Exception:
1. Written permission of the depositor;
GARNISHMENT OF DEPOSITS,
INCLUDING FOREIGN DEPOSITS
 Garnishment of a bank deposit does not violate the
law
The prohibition against examination or inquiry does not
preclude its being garnished for satisfaction of judgment.
The disclosure is purely incidental to the execution process
and it was not the intention of the legislature to place bank
deposits beyond the reach of judgment creditor
Penalties for violation of R.A. 1405
 1. Imprisonment of not more than five (5) years
 2. Fine of not more than P20,000.00
 3. Both, in the discretion of the court
END