ASSIGNMENT NO.

3-BANKING LAWS
COMMERCIAL LAW REVIEW
Atty. Myra-Diwata A. Rivera-Caroy

INSTRUCTIONS:

1. This assignment consists of FIVE (5) questions calling of the pertinent

provisions of the Secrecy of Bank Deposits Act.
2. Answer the questions briefly yet completely; limit your answers to a
maximum of three sentences per item. Cite the legal basis for your answers,
and a mere “YES” or “NO” answer shall not be given any credit. Limit your
explanation to just one sentence each. Place your answers right after the
question/item.

I.
(10%)

Enumerate the exceptions to the rule on absolute confidentiality of bank deposits under
pertinent banking laws, rules and regulations.
 The following are the exception to the rule on absolute confidentiality of a bank
deposits: a) upon written consent of the depositor; b) in impeachment cases; c) upon
order of a competent court in cases of bribery or dereliction of duties of a public
officers; d) in cases where the deposited money is the subject of litigation; e) upon
order of Commissioner of Internal Revenue in respect of the deposit of a decent for
the purpose of ascertaining the gross estate of the decedent; f) upon order of the
Commissioner of Internal Revenue in respect with the bank account of a tax payer
who filed a compromise of his tax liability by reason of his financial incapacity to pay
his tax liability; g) in the case of a dormant account or deposit for at least 10 years;
h) in the case of garnishment to satisfy a judgment of the depositor; i) in violation of
the AMLA if there is probable cause that it is related to an unlawful activity; j) in
violation of the Anti-Corruption Act; k) when the PDIC and BSP find unsound or
unsafe banking practices.
II.
(10%)

When is a bank deposit considered the “subject matter of litigation” for purposes of invoking
secrecy of bank deposits laws? Explain.
 When the investigation does not involve one of the exceptions to the prohibition
against disclosure of information of bank deposits.

III.
(10%)

Ursula is the incumbent mayor of the Municipality of Kakawatian in the province of Isabela
who was charged with criminal cases for technical malversation and a Violation of the Anti-
Graft and Corrupt Practices Act with the Sandiganbayan for transferring Php 85Million from
the municipality’s Development Fund to fund the construction of a plaza fountain. It turned
out that the fountain was only worth Php 5Million. The Php 80Million was deposited in
Ursula’s saving deposit account with XYZ Banking Corporation under Savings Account No.
1234-7658-78. In the course of the presentation of prosecution evidence, the
Sandiganbayan, upon motion by the prosecutors, then issued a subpoena directing XYZ to
produce the pertinent records and documents pertaining to Savings Account No. 1234-7658-
78. Ursula objected invoking the Secrecy of Bank Deposits Act. Is Ursula correct? Explain.
  No, Ursula is not correct. She cannot oppose the issuance of the order. Violation of
the Anti-Graft and Corrupt Act is one of the exception of the Bank Secrecy Law,
hence, the examination of her account may be allowed.
IV.
(10%)

Josefa, an examiner of the Bureau of Internal Revenue, is being investigated by the

Ombudsman upon a complaint lodged against her for ill-gotten wealth. In the course of the
investigation, the Ombudsman sent a subpoena for the production of relevant documents
concerning Josefa’s bank deposits therein, addressed to MAYAMAN Banking Corporation-
Tarlac City Branch concerning Josefa’s two personal accounts: (1) Savings Account No. 98-
1654-9876; and (2) Current Account No. 87-5167-1827. The Ombudsman also sent a
subpoena to the same bank for the production of relevant documents concerning the savings
account of Ruel, Josefa’s boyfriend, although it was only Josefa who was so charged by the
Ombudsman. Josefa and Ruel protested at the issuance of the subpoena, claiming that the
subpoena violated the absolute confidentiality of deposits under RA 1405. Are Josefa and
Ruel correct? Explain.
 Josefa and Ruel are not correct. The inquiry against ill-gotten wealth as one of the
exception of Bank Secrecy Law extend to cases where such illegally acquired property
is concealed by being recorded into another’s name.

V.
(10%)

Emmanuel is an applicant for judgeship with the Judicial and Bar Council. Along with his
application, Emmanuel submitted a duly accomplished Personnel Date Sheet (PDS) that
contains a statement allowing the inquiry into his background, including bank accounts.
Emmanuel has three accounts with MAYAMAN Banking Corporation: (1) Time Deposit
Account No. 123-7465-987; (2) Current Account No. 145-7584-096; and (3) Saving Account
No. 143-7463-50. Emmanuel also maintains a joint savings account with her business partner
Paulo, also with ABC Banking Corporation under Saving Account NO. 143-8563-08. Is the JBC
authorized to inquire into all the bank accounts mentioned? Explain.
 Yes, the JBC is authorized to inquire into all the bank accounts mention by virtue of
Emmanuel’s written consent. The Bank Secrecy Law provides an exception and one is
the written consent of the depositor.

Nothing Follows ☺