PDIC LAW

PHILIPPINE DEPOSIT
INSURANCE CORPORATION
R.A No. 3591, As Amended
GROUP 1
ACCAD, MELODY
ASUNCION, KIMBERLY V.
GAMBOA, VERONICA M.

RFBT 3
PDIC LAW

PHILIPPINE DEPOSIT
INSURANCE CORPORATION
LEARNING OBJECTIVES:

8.1.1 DESCRIBE THE INSURABLE DEPOSITS

8.1.2 COMPUTE THE MAXIMUM LIABILITY

8.1.3 IDENTIFY THE REQUIREMENTS FOR CLAIMS

PDIC LAW

PHILIPPINE DEPOSIT
INSURANCE CORPORATION
(PDIC)

PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591

to insure the deposits of all banks which are entitled to the benefits of insurance.

PDIC exists to protect depositors by providing deposit insurance coverage for the
depositing public and help promote financial stability.

The PDIC's core mandates are deposit insurance and liquidation of closed banks.

The PDIC is an attached agency of the Department of Finance.

PDIC LAW

PDIC'S OVERALL MANDATE

PDIC exists to provide deposit insurance coverage for the depositing public to help
promote public confidence and stability in the economy. It ensures prompt
payment of insured deposits, exercises complementary supervision of banks,
adopts responsive resolution methods, and applies efficient management of
receivership and liquidation functions.
PDIC LAW

FUNCTIONS OF PDIC

DEPOSIT INSURER

CO-REGULATOR OF BANKS

RECEIVER AND LIQUIDATOR

OF CLOSED BANKS
PDIC LAW

WHAT IS AN INSURED DEPOSIT?

The term 'insured deposit' means the amount due to any bona fide
depositor for legitimate deposits in an insured bank net of any
obligation of the depositor to the insured bank as of date of closure,
but not to exceed P500,000.00.

A joint account shall be insured separately from any individually-

owned deposit account.
PDIC LAW

R.A. NO. 9576 STIPULATES THAT PDIC WILL

NOT PAY DEPOSIT INSURANCE FOR THE
FOLLOWING ACCOUNTS OR TRANSACTIONS:

1. Investment products such as bonds, securities and trust accounts;

2. Deposit accounts which are unfunded, fictitious or fraudulent;
3. Deposit products constituting or emanating from unsafe and unsound banking practices;
4. Deposits that are determined to be proceeds of an unlawful activity as defined under the
Anti-Money Laundering Law.

ARE ALL BANKS MEMBERS OF PDIC?

Membership of banks to PDIC is mandatory; hence, all operating bankare members of PDIC.
PDIC LAW

WHAT TYPES OF DEPOSITS ARE

INSURED BY PDIC?
Except for the exclusions stipulated in R.A. 9576, deposits of all commercial banks, savings and
mortgage banks, rural banks, private development banks, cooperative banks, savings and loan
associations, as well as branches and agencies in the Philippines of foreign banks and all other
corporations authorized to perform banking functions in the Philippines, are insured with PDIC.

As for Philippine banks with branches outside the country, R.A. 9576 stipulates that subject to the
approval of the board of directors, any insured bank with branch outside the Philippines may elect to
include for insurance its deposit obligations payable at such branch.

Foreign currency deposits are also insured by PDIC pursuant to R.A. 6426 ("an act instituting a foreign
currency deposit system in the Philippines, and for other purposes") and Central Bank (CB) Circular
No. 1389. Depositors may receive payment in the same currency in which the insured deposit is
denominated.
PDIC LAW
FAQ
Are deposits maintained in branches and subsidiaries of
foreign banks operating in the Philippines insured by the PDIC?

Yes, the PDIC Charter provides that the deposits in branches and subsidiaries of foreign banks licensed by the
Bangko Sentral ng Pilipinas (BSP) to perform banking functions in the Philippines are insured by the .PDIC.

Are deposits maintained in Philippine banks with branches

outside the Philippines insured by the PDIC?

The PDIC Charter provides that a Philippine bank may elect to insure with the PDIC its deposits in branches
outside the Philippines. As of 31 December 2012, no Philippine bank has elected to insure deposits in their
foreign branches with PDIC.

What specific risks to a bank does PDIC cover?

PDIC covers only the risk of a bank closure ordered by the Monetary Board. Thus, bank losses due to theft, fire,
closure by reason of strike or existence of public disorder, revolution or civil war, are not covered by PDIC.
PDIC LAW
FAQ
Shall the depositor pay any insurance premium to PDIC?

No. Insurance premium is paid by the banks, not by the depositors. The bank is assessed 1/5 of 1% per annum
of the assessment base of the bank.

Can PDIC insurance coverage be increased by having several

accounts in the same name in an insured bank?

No. Deposit insurance coverage is not determined on a per-account basis. The type of account (whether
checking, savings, time or other form of deposit) has no bearing on the amount of insurance coverage.

If I have deposits in several different insured banks, will my

deposits be added together for insurance purposes?

No. Deposits in different banking institutions are insured separately. However, if a bank has one or more
branches, the main office and all branch offices are considered as one bank. Thus, if you have deposits at the
main office and at one or more branch offices of the same bank, the deposits are added together when
determining deposit insurance coverage, the total of which shall not exceed P500,000.
PDIC LAW FAQ
·Is there a need for a depositor to file his claim for insured
deposit with PDIC?

Yes. Depositors will be advised through the national and/or local media and posters at the premises of the
closed insured bank and other public places within the locality on the schedule of distribution of claim forms by
PDIC, receiving of claim forms by PDIC, and the prescriptive date of filing claims by the depositors.

When should the depositor of a closed insured bank file his

claim with PDIC?

The depositor of the closed insured bank has 24 months from date of bank takeover to file his deposit
insurance claim.

If the deposit account in a closed bank is more than P500,000.00,

what happens to the excess of the maximum amount of insured deposit?

The claim for the uninsured portion of the deposit is a claim against the assets of the closed bank. The claim may
be filed with the Liquidator of the closed bank within sixty (60) days from publication of notice of closure. However,
payment of said claim will depend on the bank's available assets and approval of the Liquidation Court. The
schedule of payment beyond the P500,000.00 maximum insurance shall be based on priorities set by law.
PDIC LAW

WHAT IS PDIC'S MAXIMUM DEPOSIT

INSURANCE COVERAGE?

Effective June 1, 2009, the maximum deposit insurance coverage is

P500,000 per depositor per bank. All deposit accounts by a
depositor in a closed bank maintained in the same right and
capacity shall be added together.

Under R.A. no 9576 the PDIC may propose to adjust the MDIC,
subject to the approval of the president of the Philippines, in case
of condition that threatens the monetary and financial stability of
the banking system that may have systematic consequences.
PDIC LAW

Account of sole proprietor being fully owned by the owner shall be

added to all the accounts since these are maintained in the same
right and capacity.
In the case where a depositor is a sole benificial owner of a single
"For the account of," "By," and "In Trust For" accounts. The
consolidated balances of these acounts should be insired up to
P500,000.

"By" e.g Kun by Ten, Kun is the depositor

"ITF" e.g Kun in trust for Ten, Ten is the depositor
"FAO" e.g Kun for the account of Ten, Ten is the depositor
PDIC LAW

SCENARIO 1
Mark Lee has the following bank accounts with their
corresponding amounts
BDO- branch 1: P300,000
BDO- branch 2: P400,000

BPI- branch 1: P250,000

BPI- branch 2: P550,000
Note:
Deposit insurance coverage is not determined on a
per-account basis. The type of account (whether
checking, savings, time or other form of deposit) has
no bearing on the amount of insurance coverage
PDIC LAW

RULES ON JOINT ACCOUNT

A joint account regardless of whether the conjunction 'and,' 'or,' 'and/or' is
used, shall be insured separately from any individually-owned deposit
account. The maximum insured deposit shall be divided into as many equal
shares as there are individuals, juridical persons or entities, unless a different
sharing is stipulated in the document of deposit.

If the account is held by a juridical person or entity jointly with one or more
natural persons, the maximum insured deposits shall be presumed to belong
entirely to such juridical person or entity.

Sec. 4 (g), PDIC Charter, as amended

PDIC LAW

SCENARIO 2
Baekhyun has the following amounts in his bank accounts:

300,000 in Security Bank (Savings)

500,000 in Security Bank (Joint account with Sehun)
300,000 in Security Bank (Joint account with Exo, Co.)

Note:
A depositor with a single account and joint account
may have insured deposit up to 1M
PDIC LAW

SPLITTING DEPOSITS
Splitting of deposits occurs whenever a deposit account with an outstanding
balance of more than the statutory maximum amount of insured deposit
maintained under the name of natural or juridical persons is broken down and
transferred into two (2) or more accounts in the name/s of natural or juridical
persons or entities who have no beneficial ownership on transferred deposits
in their names within 120 days immediately preceding or during a bank
declared bank holiday, or immediately preceding a closure order issued by the
Monetary Board of the Bangko Sentral ng Pilipinas for the purpose of availing
of the maximum deposit insurance coverage.

It is a punishable crime
Sec. 21 (f) (5) of the PDIC Charter, as amended
PDIC LAW

Splitting of deposits into two or more accounts in the name of

natural or juridical persons who have no beneficial ownership
on such transfered deposits within 120 days immediately
preceding a closure order by Monetary Board of the BSP is
prohibited.
PDIC LAW

WHEN ARE CLAIMS FILED?

Claims are filed during the claims settlememnt operations

period as announced in the NOTICE TO DEPOSITORS.

Depositors have two (2) years from PDIC's takeover to file

their deposit insurance claims.
PDIC LAW

WHO ARE REQUIRED TO FILE

DEPOSIT INSURANCE CLAIMS?
Depositors with valid deposit accounts with balances of more than
P100,000.00;
Depositors with outstanding obligations with the closed bank regardless
of amount of deposits.
Depositors with account balances of less than 100,000 pesos who have no
updated address in the bank records or who havenot updated tgheir
addresses through the MAUF issued by the PDIC.
Depositors who maintained under the name of business entities;
Depositors with accounts not eligible for early payment, regardless of type
of account and account balance per advice of PDIC; and
Depositors with accounts not eligible for early payment, regardless of type
of account and account balance per advice of PDIC; and
PDIC LAW

WHO DEPOSITORS NOT REQUIRED TO

FILE DEPOSIT INSURANCE CLAIMS?

Depositors with valid deposit accounts with balances of P100,000.00 and

below are not required to file claims, provided they:

(1) have no obligations with the closed bank, or have not acted as co-makers
of these obligations, or are not spouses of the borrowers;
(2) have complete mailing address found in the bank records or have
updated their addresses through the Mailing Address Update Form (MAUF)
of PDIC before the start of the onsite claims settlement operation; and
(3) have not maintained the account under the name of business entities
PDIC LAW

WHAT ARE THE REQUIREMENTS IN

FILING CLAIMS?
A. Prepare the following documents:
1. ORIGINAL EVIDENCE OF DEPOSITS.
2. ONE (1) VALID ORIGINAL PHOTO-BEARING IDENTIFICATION DOCUMENT
(ID) with clear signature of depositor/claimant.
3. ORIGINAL PSA BIRTH CERTIFICATE IF BELOW 18.
4. Original copy of a notarized Special Power of Attorney (SPA) for claimants
who are not the signatories in the bank records.

B. Submit personally or through mail.

PDIC LAW

WHO SHOULD SIGN THE

CLAIM FORM?
a. DEPOSITOR - If 18 and above
b. PARENT - If below 18
c. AGENT - "by"
d. TRUSTEE - ITF
e. EACH DEPOSITOR/ACCOUNT HOLDER for account maintained as "Or",
"And/Or" or "And"
f. AUTHORIZED REPRESENTATIVE/s
PDIC LAW

PROCEDURES FOR CLAIMING

INSURANCE PROCEEDS
a. Period for Payment
i. Whenever an insured bank is closed by Monetary Board
ii. Payment shall be made by PDIC as soon as possible

b. Mode of payment
i. By Cash
ii. By making available to each depositor a transferred deposit in another insured bank in
an amountequal to insured deposit of such depositor

c. Requirement before payment

i. PDIC may require proof of claims, before paying the insured deposit
ii. If PDIC Is not satisfied as to the validity of a claim for an insured deposit, it may require
final determination of a court of competent jurisdiction before paying such claim
PDIC LAW

PROCEDURES FOR CLAIMING

INSURANCE PROCEEDS

d. Period for payment.

i. It must be made within 6 months from the date of filing otherwise the officers of
PDIC will beliable for failure to pay if due to grave abuse of discretion, gross
negligence, bad faith or malice.

e. Rights of PDIC upon payment of insured deposits

i. PDIC shall be subrogated to all rights of depositor against the closed bank to the
extent of suchpayment.
PRESENTATION TEMPLATE

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