Amended REPUBLIC ACT NO. 3591 AN ACT ESTABLISHING THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, DEFINING ITS POWERS AND DUTIES AND FOR OTHER PURPOSES
SECTION SECTION 1. There is is hereby hereby created created a Phili Philippine ppine Deposit Deposit Insurance Insurance Corporat Corporation ion hereinafter hereinafter referred to as the "Corporation" which shall insure as herein pro!ided the deposits of all bans which are entitled to the benefits of insurance under this #ct and which shall ha!e the powers hereinafter $ranted. The Corporation shall as a basic policy pro%ote and safe$uard the interests of the depositin$ public by way of pro!idin$ per%anent and continuin$ insurance co!era$e on all insured deposits. SECTION SECTION &. &. The powers powers and functions functions of of the Corporati Corporation on shall be be !ested in in and e'ercised e'ercised by a (oard of Directors which shall be co%posed of fi!e )*+ %e%bers as follows, )a+ The The Secr Secret etar ary y of -ina -inanc ncee who shal shalll be e'o e'offficio icio Chai Chair%an r%an of the the (oar (oard d with withou outt co%pensation. )b+ The /o!ern /o!ernor or of of the the (an$ (an$o o Sent Sentral ral n$ Pili Pilipin pinas as who shall shall be e'o e'off ffici icio o %e%be %e%berr of of the the (oard without co%pensation. )c+ The The Pres Presiident dent of the Corpo Corporrati ation on who who shall hall be appo appoiinted nted by the Pres Presid iden entt of the the Philippines fro% either the /o!ern%ent or pri!ate sector to ser!e on fullti%e basis for a ter% of si' )0+ years. The President of the Corporation shall also ser!e as ice Chair%an of the (oard. )d+ )d+ Two )&+ %e%b %e%ber erss fro% fro% the pri! pri!at atee secto sectorr to be appoi appoint nted ed for for a ter% ter% of si' si' )0+ year yearss without without reappoi reappoint% nt%ent ent by the Presi President dent of the Philip Philippin pines, es, Pro!id Pro!ided ed That That of those those first first appointed the first appointee shall ser!e for a p eriod of two )&+ years. No person shall be appointed as %e%ber of the (oard unless he be of $ood %oral character and of un2uest un2uestion ionabl ablee inte$r inte$rity ity and respons responsibi ibilit lity y and who is of reco$ni reco$ni3ed 3ed co%pet co%petence ence in econo%ics econo%ics banin$ and finance law %ana$e%ent %ana$e%ent ad%inistrat ad%inistration ion or insurance insurance and shall be at least thirtyfi!e )4*+ years of a$e. -or the duration of their tenure or ter% in office and for a period of one year thereafter the appointi!e %e%bers of the (oard shall be dis2ualified fro% holdin$ any office position or e%ploy%ent in any insured ban. The Secretary of -inance and the /o!ernor of the (an$o Sentral %ay each desi$nate a representati!e whose position shall not be lower than an undersecretary or deputy $o!ernor respect respecti!e i!ely ly to attend attend such such %eetin %eetin$s $s and to !ote !ote on behalf behalf of their their respec respecti! ti!ee princi principal pals. s. 5hene!er the Chair%an of the (oard is unable to attend a %eetin$s of the (oard or in the e!ent of a !acancy in the office of the Secretary of -inance the President of the Corporation shall act as Chair%an.
The presence of three )4+ %e%bers shall constitute a 2uoru%. #ll decisions of the (oard of Directors shall shall re2uire the concurrence of at least three )4+ %e%bers. E#cIST The Secretary of -inance shall fi' the rate of per die% for e!ery (oard %eetin$ attended by the %e%bers of the (oard of Directors fro% the pri!ate sector. The President of the Philippines %ay fi' fi' such such e%ol e%olu% u%ent entss that that %ay be rece recei! i!ed ed by the the (oar (oard d of Dire Direct ctor orss co%pa co%para rabl blee to the the e%olu%ents of %e%bers of the (oard of Directors of other $ o!ern%ent financial institutions. The (oard of Directors shall ha!e the authority, au thority, 1. To prep prepar aree and issu issuee rules rules and and re$ul re$ulat atio ions ns as it cons consid ider erss neces necessa sary ry for for the effe effect cti! i!ee dischar$e of its responsibilities6 &.
To dir direct ect the the %ana$ %ana$e% e%ent ent oper operat atio ion n and and ad%i ad%ini nist stra rati tion on of of the the Cor Corpor porat atio ion6 n6
4. To esta establ blis ish h a hu%a hu%an n reso resour urce ce %ana %ana$e $e%e %ent nt syst syste% e% whic which h shal shalll $o!er $o!ern n the sele select ctio ion n hirin$ appoint%ent transfer pro%otion or dis%issal of all personnel. Such syste% shall ai% to establish professionalis% and e'cellence at all le!els of the Corporation in accordance with sound principles of %ana$e%ent. # co%pensation co%pensation structure structure based on 7ob e!aluation e!aluation studies and wa$e sur!eys and sub7ect sub7ect to the (oard8 (oard8ss appro! appro!al al shall shall be insti institut tuted ed as an inte$r inte$ral al co%pone co%ponent nt of the Corpor Corporati ation8 on8ss hu%an hu%an resource de!elop%ent pro$ra%, Pro!ided That all positions in the Corporation shall be $o!erned by a co%pensation position classification syste% and 2ualification standards appro!ed by the (oard based on a co%prehensi!e 7ob analysis and audit of actual duties and responsibilities. The co%pens co%pensati ation on plan plan shall shall be co%par co%parabl ablee with with the pre!ai pre!ailin lin$ $ co%pens co%pensati ation on plans plans of other other $o!ern%ent financial institutions and shall be sub7ect to re!iew by the (oard no %ore than once e!ery two )&+ years without pre7udice to yearly %erit re!iews or increases based on producti!ity and profit profitabi abilit lity y. The Corpor Corporati ation on shall shall theref therefore ore be e'e%pt e'e%pt fro% fro% e'isti e'istin$ n$ laws laws rules rules and re$ulations on co%pensation position classification and 2ualification standards. It shall howe!er endea!or to %ae its syste% confor% as closely as possible with the principles under 9epublic #ct No. 0:*; as a%ended. cT#CIa cT#CIa <. To appoint appoint esta establi blish sh the ran ran fi' fi' the re%une re%unerat ration ion appr appro!e o!e local local and forei$ forei$n n trai trainin$ nin$ of and re%o!e any officer or e%ployee of the Corporation for cause sub7ect to pertinent ci!il ser!ice laws, Pro!ided That the (oard of Directors %ay dele$ate this authority to the President sub7ect to specific $uidelines6 *. To adop adoptt an annu annual al bud$ bud$et et for for and and autho authori ri3e 3e suc such h e'pen e'pendi ditu ture ress by the the Corp Corpor orat atio ion n as are are in the interest of the effecti!e ad%inistration ad%inistration and operation of the Corporation6 Corporation6 and E=aDIC 0. #ppr #ppro! o!ee the %eth %ethod odol olo$ o$y y for for deter deter%i %ini nin$ n$ the the le!el le!el and and a%oun a%ountt of pro!i pro!isi sion onin in$ $ for insurance insurance and financial financial assistance assistance losses losses which shall establish reasonable reasonable le!els of deposit deposit insurance reser!es.
:. To re!iew the or$ani3ational setup of the Corporation and adopt a new or re!ised or$ani3ational structure as it %ay dee% necessary for the Corporation to undertae its %andate and functions. SECTION 4. The President of the Corporation shall be the Chief E'ecuti!e thereof and his salary shall be fi'ed by the President of the Philippines at a su% co%%ensurate to the i%portance and responsibility attached to the position. The su% total of the salary of the President and the allowances and other e%olu%ents which the (oard of Directors %ay $rant hi% shall be ceilin$ for fi'in$ the salary allowances and other e%olu%ents of all other personnel in the Corporation. &>>*cdtai The powers and duties of the president of the Corporation are, )a+ To prepare the a$enda for the %eetin$ of the (oard and to sub%it for the consideration of the (oard the policies and %easures which he belie!es to be necessary to carry out the purposes and pro!isions of this #ct6 )b+
To e'ecute and ad%inister the policies and %easures appro!ed by the (oard6
)c+ To direct and super!ise the operations and internal ad%inistration of the Corporation in accordance with the policies established by the (oard. The President %ay dele$ate certain of his ad%inistrati!e responsibilities to other officers of the Corporation sub7ect to the rules and re$ulations of the (oard6 &>>*cdtai )d+ To represent the Corporation upon prior authority of the (oard in all dealin$s with other offices a$encies and instru%entalities of the /o!ern%ent and with all other persons or entities public or pri!ate whether do%estic forei$n or international6 )e+ To authori3e with his si$nature upon prior authority of the (oard contracts entered into by the Corporation notes and securities issued by the Corporation and the annual reports balance sheets profits and loss state%ents correspondence and other docu%ents of the Corporation. The si$nature of the President %ay be in facsi%ile where!er appropriate6 )f+ To represent the corporation either personally or throu$h counsel in all le$al proceedin$s or actions6 )$+ To dele$ate with the prior appro!al of the (oard of Directors his power to represent the Corporation as pro!ided in subsections )d+ and )f+ of this Section to other officers of the Corporation6 and )h+
To e'ercise such other powers as %ay be !ested in hi% by the (oard.
The President shall be assisted by a icePresident and other officials whose appoint%ent and re%o!al for cause shall be appro!ed and whose salary shall be fi'ed by the (oard of Directors upon reco%%endation of the President of the Corporation. Durin$ the absence or te%porary
incapacity of the President or in case of !acancy or per%anent incapacity and pendin$ the appoint%ent of a new President of the Corporation by the President of the Philippines the ice President shall act as President and dischar$e the duties and responsibilities thereof. ?PrE SECTION <. #s used in this #ct @ iatdc&>>* )a+ The ter% "(oard of Directors" %eans the (oard of Directors of the Corporation. pre%>*cd )b+ The ter% 8(an8 and 8(anin$ Institution8 shall be synony%ous and interchan$eable and shall include bans co%%ercial bans sa!in$s ban %ort$a$e bans rural bans de!elop%ent bans cooperati!e bans stoc sa!in$s and loan associations and branches and a$encies in the Philippines of forei$n bans and all other corporations authori3ed to perfor% banin$ functions in the Philippines. )c+ The ter% 8recei!er8 includes a recei!er co%%ission person or other a$ency char$ed by law with the duty to tae char$e of the assets and liabilities of a ban which has been forbidden fro% doin$ business in the Philippines as well as the duty to $ather preser!e and ad%inister such assets and liabilities for the benefit of the depositors and creditors of said ban and to continue into li2uidation whene!er authori3ed under this #ct other laws and to dispose of the assets and to wind up the affairs of such ban6. &>>*?PrE )d+ The ter% "insured ban" %eans any ban the deposit of which are insured in accordance with the pro!ision of this #ct6 )e+
The ter% "noninsured ban" %eans any ban the deposit of which are not insured.
)f+ The ter% 8deposit8 %eans the unpaid balance of %oney or its e2ui!alent recei!ed by a ban in the usual course of business and for which it has $i!en or is obli$ed to $i!e credit to a co%%ercial checin$ sa!in$s ti%e or thrift account or issued in accordance with (an$o Sentral rules and re$ulations and other applicable laws to$ether with such other obli$ations of a ban which consistent with banin$ usa$e and practices the (oard of Directors shall deter%ine and prescribe by re$ulations to be deposit liabilities of the ban, Pro!ided That any obli$ation of a ban which is payable at the office of the ban located outside of the Philippines shall not be a deposit for any of the purposes of this #ct or included as part of the total deposits or of insured deposit, Pro!ided further That sub7ect to the appro!al of the (oard of Directors any insured ban which is incorporated under the laws of the Philippines which %aintains a branch outside the Philippines %ay elect to include for insurance its deposit obli$ations payable only at such branch. The Corporation shall not pay deposit insurance for the followin$ accounts or transactions whether deno%inated docu%ented recorded or booed as deposit by the ban,
)1+ In!est%ent products such as bonds and securities trust accounts and other si%ilar instru%ents6 )&+
Deposit accounts or transactions which are unfunded or that are fictitious or fraudulent6
)4+ Deposit accounts or transactions constitutin$ andAor e%anatin$ fro% unsafe and unsound banin$ practiceAs as deter%ined by the Corporation in consultation with the (SP after due notice and hearin$ and publication of a cease and desist order issued by the Corporation a$ainst such deposit accounts or transactions6 and )<+ Deposits that are deter%ined to be the proceeds of an unlawful acti!ity as defined under 9epublic #ct No. B10> as a%ended. aI#EcD The actions of the Corporation taen under this section shall be final and e'ecutory and %ay not be restrained or set aside by the court e'cept on appropriate petition for certiorari on the $round that the action was taen in e'cess of 7urisdiction or with such $ra!e abuse of discretion as to a%ount to a lac or e'cess of 7urisdiction. The petition for certiorari %ay only be filed within thirty )4>+ days fro% notice of denial of clai% for deposit insurance. )$+ The ter% 8insured deposit8 %eans the a%ount due to any bona fide depositor for le$iti%ate deposits in an insured ban net of any obli$ation of the depositor to the insured ban as of the date of closure but not to e'ceed -i!e hundred thousand pesos )P*>>>>>.>>+. Such net a%ount shall be deter%ined accordin$ to such re$ulations as the (oard of Directors %ay prescribe. In deter%inin$ such a%ount due to any depositor there shall be added to$ether all deposits in the ban %aintained in the sa%e ri$ht and capacity for his benefit either in his own na%e or in the na%e of others. # 7oint account re$ardless of whether the con7unction 8and8 8or8 8andAor8 is used shall be insured separately fro% any indi!iduallyowned deposit account, Pro!ided That )1+ If the account is held 7ointly by two or %ore natural persons or by two or %ore 7uridical persons or entities the %a'i%u% insured deposit shall be di!ided into as %any e2ual shares as there are indi!iduals 7uridical persons or entities unless a different sharin$ is stipulated in the docu%ent of deposit and )&+ If the account is held by a 7uridical person or entity 7ointly with one or %ore natural persons the %a'i%u% insured deposit shall be presu%ed to belon$ entirely to such 7uridical person or entity, Pro!ided further That the a$$re$ate of the interests of each coowner o!er se!eral 7oint accounts whether owned by the sa%e or different co%binations of indi!iduals 7uridical persons or entities shall liewise be sub7ect to the %a'i%u% insured deposit of -i!e hundred thousand pesos )P*>>>>>.>>+, Pro!ided further%ore That the pro!isions of any law to the contrary notwithstandin$ no ownerAholder of any ne$otiable certificate of deposit shall be reco$ni3ed as a depositor entitled to the ri$hts pro!ided in this #ct unless his na%e is re$istered as ownerAholder thereof in the boos of the issuin$ ban, Pro!ided finally That in case of a condition that threatens the %onetary and financial stability of the banin$ syste% that %ay ha!e syste%ic conse2uences as defined in Section 1: hereof as deter%ined by the onetary (oard the %a'i%u% deposit insurance co!er %ay be ad7usted in such a%ount for such a period andAor
for such deposit products as %ay be deter%ined by a unani%ous !ote of the (oard of Directors in a %eetin$ called for the purpose and chaired by the Secretary of -inance sub7ect to the appro!al of the President of the Philippines. )h+ The ter% "transfer deposit" %eans a deposit in an insured ban %ade a!ailable to a depositor by the Corporation as pay%ent of insured deposit of such depositor in a closed ban and assu%ed by another insured ban. )i+ The ter% "trust funds" %eans funds held by an insured ban in a fiduciary capacity and includes without bein$ li%ited to funds held as trustee e'ecutor ad%inistrator $uardian or a$ent. SECTION *. The deposit liabilities of any ban or banin$ institution which is en$a$ed in the business of recei!in$ deposits as herein defined on the effecti!e date of this #ct or which thereafter %ay en$a$e in the business of recei!in$ deposits shall be insured with the corporation. ewnt? SECTION 0. )a+ The assess%ent rate shall be deter%ined by the (oard of Directors, Pro!ided That the assess%ent rate shall not e'ceed onefifth )1A*+ of one per centu% )1+ per annu%. The se%iannual assess%ent for each insured ban shall be in the a%ount of the product of onehalf )1A&+ the assess%ent rate %ultiplied by the assess%ent base but in no case shall it be less than -i!e thousand pesos )P*>>>.>>+. The assess%ent base shall be the a%ount of the liability of the ban for deposits as defined under subsection )f+ of Section < without any deduction for indebtedness of depositors. D=aECI The se%iannual assess%ent base for one se%iannual period shall be the a!era$e of the assess%ent base of the ban as of the close of business on arch thirtyone and une thirty and the se%iannual assess%ent base for the other se%iannual period shall be the a!era$e of the assess%ent base of the ban as of the close of business on Septe%ber thirty and Dece%ber thirty one, Pro!ided That when any of said days is a nonbusiness day or le$al holiday either national or pro!incial the precedin$ business day shall be used. The certified state%ents re2uired to be filed with the Corporation under subsections )b+ and )c+ of this Section shall be in such for% and set forth such supportin$ infor%ation as the (oard of Directors shall prescribe. The assess%ent pay%ents re2uired fro% the insured bans under subsections )b+ and )c+ of this Section shall be %ade in such %anner and at such ti%e or ti%es as the (oard of Directors shall prescribe pro!ided the ti%e or ti%es so prescribed shall not be later than si'ty )0>+ days after filin$ the certified state%ent settin$ forth the a%ount of assess%ent. pre%>*cd )b+ On or before the 41st of uly of each year each insured ban shall file with the Corporation a certified state%ent showin$ for the si' %onths endin$ on the precedin$ une thirty the a%ount of the assess%ent base and the a%ount of the se%iannual assess%ent due to the Corporation for the period endin$ on the followin$ Dece%ber thirtyone deter%ined in accordance with subsection )a+ of this section which shall contain or be !erified by a written
declaration that it is %ade under the penalties of per7ury. Each insured ban shall pay to the Corporation the a%ount of the se%iannual assess%ent it is re2uired to certify. On or before the 41st day of anuary of each year each insured ban shall file with the Corporation a si%ilar certified state%ent for the si' %onths endin$ on the precedin$ Dece%ber thirtyone and shall pay to the Corporation the a%ount of the se%iannual assess%ent for the period endin$ in the followin$ une thirty which it is re2uired to certify. dEetsn )c+ Each ban which beco%es an insured ban shall not be re2uired to file any certified state%ent or pay any assess%ent for the se%iannual period in which it beco%es an insured ban. On the e'piration of such period each such ban shall co%ply with the pro!isions of subsection )b+ of this section e'cept that the se%iannual assess%ent base for its first certified state%ent shall be the assess%ent base of the ban as of the close of business on the precedin$ une thirty or Dece%ber thirtyone whiche!er is applicable deter%ined in accordance with subsection )a+ of this section. If such ban has assu%ed the liabilities for deposits of another ban or bans it shall include such liabilities in its assess%ent base. The first certified state%ent shall show as the a%ount of the first se%iannual assess%ent due to the Corporation an a%ount e2ual to the product of onehalf of the annual assess%ent rate %ultiplied by such assess%ent base. )d+ #ll assess%ent collections and inco%e fro% operations after e'penses and char$es shall be added to the Deposit Insurance -und under Section 14 hereof. Such e'penses and char$es are, )1+ the operatin$ costs and e'penses of the Corporation for the calendar year6 )&+ additions to reser!e to pro!ide for insurance and financial assistance losses net of reco!erable a%ounts fro% applicable assets and collaterals durin$ the calendar year6 and )4+ the net insurance and financial assistance losses sustained in said calendar year. )e+ The Corporation )1+ %ay refund to an insured ban any pay%ent of assess%ent in e'cess of the a%ount due to the Corporation or )&+ %ay credit such e'cess toward the pay%ent of the assess%ent ne't beco%in$ due fro% such ban and upon succeedin$ assess%ents until the credit is e'hausted. )f+ #ny insured ban which fails to file any certified state%ent re2uired to be filed by it in connection with deter%inin$ the a%ount of any assess%ent payable by the ban to the Corporation %ay be co%pelled to file such state%ent by %andatory in7unction or other appropriate re%edy in a suit brou$ht for such purpose by the Corporation a$ainst the ban and any officer or officers thereof in any court of the Philippines of co%petent 7urisdiction in which such ban is located. %sedE? )$+ The Corporation in a suit brou$ht in any court of co%petent 7urisdiction shall be entitled to reco!er fro% any insured ban the a%ount of any unpaid assess%ent lawfully payable by such insured ban to the Corporation whether or not such ban shall ha!e filed any such certified state%ent and whether or not suit shall ha!e been brou$ht to co%pel the ban to file any such state%ent. No action or proceedin$ shall be brou$ht for reco!ery of any assess%ent due to the
Corporation or for the reco!erin$ of any a%ount paid to the Corporation in e'cess of the a%ount due to it unless such action or proceedin$ shall ha!e been brou$ht within fi!e years after the ri$ht accrued for which the clai% is %ade e'cept where the insured ban has %ade or filed with the Corporation a false or fraudulent certified state%ent with the intent of e!ade in a whole or in part the pay%ent of assess%ent in which case the clai% shall not ha!e been dee%ed to ha!e accrued until the disco!ery by the Corporation that the certified state%ent is false fraudulent. )h+ The Corporation shall not ter%inate the insured status of any ban which continues to operate or recei!e deposits. Should any insured ban fail or refuse to pay any assess%ent re2uired to be paid by such ban under any pro!ision of this #ct and should the ban not correct such failure or refusal within thirty )4>+ days after written notice has been $i!en by the Corporation to an officer of the ban citin$ this subsection and statin$ that the ban has failed or refused to pay as re2uired by the law the Corporation %ay at its discretion file a case for collection before the appropriate court without pre7udice to the i%position of ad%inistrati!e sanctions allowed under the pro!isions of this ?aw on the ban officials responsible for the non pay%ent of assess%ent fees. suPwo% SECTION :. )a+ 5hene!er upon e'a%ination by the Corporation into the condition of any insured ban it shall be disclosed that an insured ban or its directors or a$ents ha!e co%%itted are co%%ittin$ or about to co%%it unsafe or unsound practices in conductin$ the business of the ban or ha!e !iolated are !iolatin$ or about to !iolate any pro!isions of any law or re$ulation to which the insured ban is sub7ect the (oard of Directors shall sub%it the report of the e'a%ination to the onetary (oard to secure correcti!e action thereon. If no such correcti!e action is taen by the onetary (oard within fortyfi!e )<*+ days fro% the sub%ission of the report the (oard of Directors shall %otu proprio institute correcti!e action which it dee%s necessary. The (oard of Directors %ay thereafter issue a cease and desist order and re2uire the ban or its directors or a$ents concerned to correct the practices or !iolations within fortyfi!e )<*+ days. =owe!er if the practice or !iolation is liely to cause insol!ency or substantial dissipation of assets or earnin$s of the ban or is liely to seriously weaen the condition of the ban or otherwise seriously pre7udice the interests of its depositors and the Corporation the period to tae correcti!e action shall not be %ore than fifteen )1*+ days. The order %ay also include the i%position of fines pro!ided in Section &1 )f+ hereof. The (oard of Directors shall duly infor% the onetary (oard of the (an$o Sentral n$ Pilipinas of action it has taen under this subsection with respect to such practices or !iolations. E?uuoE )b+ The actions and proceedin$s pro!ided in the precedin$ subsection %ay be undertaen by the Corporation if in its opinion an insured ban or its directors or a$ents ha!e !iolated are !iolatin$ or about to !iolate any pro!isions of this #ct or any order rule or instruction issued by the Corporation or any written condition i%posed by the Corporation in connection with any transaction with or $rant by the Corporation. oor%a? SECTION ;. The Corporation as a corporate body shall ha!e the powers, a%trit
-irst @ To adopt and use a corporate seal6 Second @ To ha!e succession until dissol!ed b y an #ct of Con$ress6 Third @ To %ae contracts6 -ourth @ To sue and be sued co%plain and defend in any court of law in the Philippines. #ll suits of a ci!il nature to which the Corporation shall be a part shall be dee%ed to arise under the laws of the Philippines. No attach%ent or e'ecution shall be issued a$ainst the Corporation or its property before final 7ud$%ent in any suit action or proceedin$ in any court. The (oard of Directors shall desi$nate an a$ent upon who% ser!ice of process %ay be %ade in any pro!ince or city or 7urisdiction in which the insured ban is located6 -ifth @ To appoint by its (oard of Directors such officers and e%ployees as are not otherwise pro!ided for in this #ct to define their duties fi' their co%pensation re2uire bonds of the% and fi' penalty thereof and to dis%iss such officers and e%ployees for cause6 wnnniP Si'th @ To prescribe by its (oard of Directors bylaws not inconsistent with law re$ulatin$ the %anner in which its $eneral business %ay be conducted and the pri!ile$es $ranted to it by law %ay be e'ercised and en7oyed6 Se!enth @ To e'ercise by its (oard of Directors or duly authori3ed officers or a$ents all powers specifically $ranted by the pro!isions of this #ct and such incidental powers as shall be necessary to carry on the powers so $ranted6 Ei$hth @ To conduct e'a%ination of bans with prior appro!al of the onetary (oard, Pro!ided That no e'a%ination can be conducted within twel!e )1&+ %onths fro% the last e'a%ination date, Pro!ided howe!er That the Corporation %ay in coordination with the (an$o Sentral conduct a special e'a%ination as the (oard of Directors by an affir%ati!e !ote of a %a7ority of all of its %e%bers if there is a threatened or i%pendin$ closure of a ban, Pro!ided further That notwithstandin$ the pro!isions of 9epublic #ct No. 1<>* as a%ended 9epublic #ct No. 0<&0 as a%ended 9epublic #ct No. ;:B1 and other laws the Corporation andAor the (an$o Sentral %ay in2uire into or e'a%ine deposit accounts and all infor%ation related thereto in case there is a findin$ of unsafe or unsound banin$ practice, Pro!ided finally That to a!oid o!erlappin$ of efforts the e'a%ination shall %a'i%i3e the efficient use of the rele!ant reports infor%ation and findin$s of the (an$o Sentral which it shall %ae a!ailable to the Corporation. Ninth @ To act as recei!er6 Tenth @ To prescribe by its (oard of Directors such rules and re$ulations as it %ay dee% necessary to carry out the pro!isions of this #ct. oP%w%s
Ele!enth. @ The Corporation %ay establish its own pro!ident fund which shall consist of contributions %ade both by the Corporation and by its officers and e%ployees to a co%%on fund for the pay%ent of benefits to such officers or e%ployees or their heirs. The (oard of Directors shall prepare and issue rules and re$ulations as it %ay dee% necessary to %ae effecti!e the establish%ent and operation of the fund. Twelfth @ To co%pro%ise condone or release in whole or in part any of clai% or settled liability to the Corporation re$ardless of the a%ount in!ol!ed under such ter%s and conditions as %ay be i%posed by the (oard of Directors to protect the interest of Corporation. to%adi SECTION B. )a+ The (oard of Directors shall ad%inister the affairs of the Corporation fairly and i%partially and without discri%ination. the Corporation shall be entitled to the free use of Philippine %ails in the sa%e %anner as the other offices of the national $o!ern%ent. ndPtr? )b+ The (oard of Directors shall appoint e'a%iners who shall ha!e power on behalf of the Corporation to e'a%ine any insured ban. Each such e'a%iner shall ha!e the power to %ae a throu$h e'a%ination of all the affairs of the ban and in doin$ so he shall ha!e the power to ad%inister oaths to e'a%ine and tae and preser!e the testi%ony of any the officers and a$ents thereof and to co%pel the presentation of boos docu%ents papers or records necessary in his 7ud$%ent to ascertain the facts relati!e to the condition of the ban, and shall %ae a full and detailed report of the condition of the ban to the Corporation. The (oard of Directors in lie %anner shall appoint clai% a$ents who shall ha!e the power to in!esti$ate and e'a%ine all clai%s for insured deposits and transferred deposits. Each clai% a$ent shall ha!e the power to ad%inister oaths and e'a%ine under oath and tae and preser!e testi%ony of any person relatin$ to such clai%. )b1+ The in!esti$ators appointed by the (oard of Directors shall ha!e the power on behalf of the Corporation to conduct in!esti$ations on frauds irre$ularities and ano%alies co%%itted in bans based on reports of e'a%ination conducted by the Corporation and (an$o Sentral n$ Pilipinas or co%plaints fro% depositors or fro% other $o!ern%ent a$en cy. Each such in!esti$ator shall ha!e the power to ad%inister oaths and to e'a%ine and tae and preser!e the testi%ony of any person relatin$ to the sub7ect of in!esti$ation. %nw%Pn )c+ Each insured ban shall %ae 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 published in such %anner not inconsistent with any applicable law as it %ay direct. E!ery such ban which fails to %ae or publish any such report within such ti%e not less than fi!e days as the (oard of Directors %ay re2uire shall be sub7ect to a penalty of not %ore than P1>> for each day of such failure reco!erable by the Corporation of its use. )d+ The Corporation shall ha!e access to reports of e'a%ination %ade by and reports of condition %ade to the (an$o Sentral n$ Pilipinas or its appropriate super!isin$ depart%ents and the (an$o Sentral n$ Pilipinas shall also ha!e access to reports of e'a%ination %ade by
and reports of condition %ade to the Corporation, Pro!ided That the pro!isions of any law to the contrary notwithstandin$ the Corporation shall liewise ha!e access to reports findin$s and any other infor%ation deri!ed fro% any special or $eneral e'a%ination of in2uiry conducted by the (an$o Sentral in respect to ban fraud or serious irre$ularity in an insured ban, Pro!ided that the Corporation shall use such reports and findin$s under si%ilar ter%s and conditions prescribed by applicable laws on the (an$o Sentral. )d1+ Each insured ban shall eep and %aintain a true and accurate record or state%ent of its daily deposit transactions consistent with the standards set by the (an$o Sentral n$ Pilipinas and the Corporation. Co%pliance with such standards shall be duly certified by the president of the ban or the co%pliance officer, Pro!ided That refusal or willful failure to issue the re2uired certification shall constitute a !iolation of this Section and shall sub7ect such officers of the ban to the sanctions pro!ided for under Section &1 )f+ of this #ct. a%srra )e+
Personnel of the Corporation are hereby prohibited fro%,
)1+ bein$ an officer director consultant e%ployee or stocholder directly or indirectly of any ban or banin$ institution e'cept as otherwise pro!ided in this #ct6 )&+
recei!in$ any $ift or thin$ of !alue fro% any officer director or e%ployee thereof6
)4+ re!ealin$ in any %anner e'cept as pro!ided in this #ct or under order of the court infor%ation relatin$ to the condition or business of any such institution. This prohibition shall not apply to the $i!in$ of infor%ation to the (oard of Directors the President of the Corporation Con$ress any a$ency of $o!ern%ent authori3ed by law or to any person authori3ed by either of the% in writin$ to recei!e such infor%ation. )f+ The Corporation shall underwrite or ad!ance liti$ation costs and e'penses includin$ le$al fees and other e'penses of e'ternal counsel or pro!ide le$al assistance to directors officers e%ployees or a$ents of the Corporation in connection with any ci!il cri%inal ad%inistrati!e or any other action or proceedin$ to which such director officer e%ployee or a$ent is %ade a party by reason of or in connection with the e'ercise of authority or perfor%ance of functions and duties under this #ct, Pro!ided That such le$al protection shall not apply to any ci!il cri%inal ad%inistrati!e or any action or proceedin$ that %ay be initiated by the Corporation in whate!er capacity a$ainst such director officer e%ployee or a$ent, Pro!ided further That directors officers e%ployees or a$ents who shall resi$n retire transfer to another a$ency or be separated fro% the ser!ice shall continue to be pro!ided with such le$al protection in connection with any act done or o%itted to be done by the% in $ood faith durin$ their tenure or e%ploy%ent with the Corporation, Pro!ided finally That in the e!ent of a settle%ent or co%pro%ise inde%nification shall be pro!ided only in connection with such %atters co!ered by the settle%ent as to which the Corporation is ad!ised by counsel that the persons to be inde%nified did not co%%it any ne$li$ence or %isconduct. aD=CE#
)$+ The costs and e'penses incurred in defendin$ the afore%entioned action suit or proceedin$ %ay be paid by the Corporation in ad!ance of the final disposition of such action suit or proceedin$ upon receipt of an undertain$ by or on behalf of the director officer e%ployee or a$ent to repay the a%ount ad!anced should it ulti%ately be deter%ined by the (oard of Directors that he is not entitled to be inde%nified as pro!ided in this subsection. )h+ Fnless the actions of the Corporation or any of its officers and e%ployees are found to be in willful !iolation of this #ct perfor%ed in bad faith with %alice andAor $ross ne$li$ence the Corporation its directors officers e%ployees and a$ents are held free and har%less to the fullest e'tent per%itted by law fro% any liability and they shall be inde%nified for any and all liabilities losses clai%s de%ands da%a$es deficiencies costs and e'penses of whatsoe!er ind and nature that %ay arise in connection with the perfor%ance of their functions without pre7udice to any cri%inal liability under e'istin$ laws. )i+ ?e$al assistance shall include the $rant or ad!ance of reasonable le$al fees as deter%ined by the (oard of Directors to enable the concerned director officer e%ployee or a$ent to en$a$e counsel of his choice sub7ect to appro!al by the (oard of Directors. Notwithstandin$ the pro!isions of this Section and Sec tion & %e%bers of the (oard of Directors and personnel of the Corporation %ay beco%e directors and officers of any ban and banin$ institution and of any entity related to such institution in connection with financial assistance e'tended by the Corporation to such institution and when in the opinion of the (oard it is appropriate to %ae such desi$nation to protect the interest of the Corporation. ETIDa= (orrowin$ fro% any ban or banin$ institution by e'a%iners and other personnel of the e'a%ination depart%ents of the Corporation shall be prohibited only with respect to the particular institution in which they are assi$ned or are conductin$ an e'a%ination. Personnel of other depart%ents offices or units of the Corporation shall liewise be prohibited fro% borrowin$ fro% any ban or banin$ institution durin$ the period of ti%e that a transaction of such institution with the Corporation is bein$ e!aluated processed or acted upon by such personnel, Pro!ided howe!er That the (oard %ay at its discretion indicate the position le!els or functional $roups to which the prohibition is app licable. (orrowin$ by all fullti%e personnel of the Corporation fro% any ban or banin$ institution shall be secured and disclosed to the (oard and shall be sub7ect to such further rules and re$ulations as the (oard %ay prescribe. SECTION 1>. )a+ The pro!isions of other laws $eneral or special to the contrary notwithstandin$ whene!er it shall be appropriate for the onetary (oard of the (an$o Sentral n$ Pilipinas to appoint a recei!er of any banin$ institution pursuant to e'istin$ laws the onetary (oard shall $i!e prior notice and appoint the Corporation as recei!er. #EI=CS
)b+ The Corporation as recei!er shall control %ana$e and ad%inister the affairs of the closed ban. Effecti!e i%%ediately upon taeo!er as recei!er of such ban the powers functions and duties as well as all allowances re%unerations and per2uisites of the directors officers and stocholders of such ban are suspended and the rele!ant pro!isions of the #rticles of Incorporation and (ylaws of the closed ban are liewise dee%ed suspended. The assets ofG the closed ban under recei!ership shall be dee%ed in custodia le$is in the hands of the recei!er. -ro% the ti%e the closed ban is placed under such recei!ership its assets shall not be sub7ect to attach%ent $arnish%ent e'ecution le!y or any other court processes. Therefore a 7ud$e officer of the court or any person who shall issue order process or cause the issuance or i%ple%entation of the writ of $arnish%ent le!y attach%ent or e'ecution shall be liable under Section &1 hereof. )c+ In addition to the powers of a recei!er pursuant to e'istin$ laws the Corporation is e%powered to, )1+
brin$ suit to enforce liabilities to or reco!eries of the closed ban6
)&+ appoint and hire persons or entities of reco$ni3ed co%petence in banin$ or finance as its deputies and assistants to perfor% such powers and functions of the Corporation as recei!er or li2uidator of the closed ban6 #CTaD= )4+ suspend or ter%inate the e%ploy%ent of officers and e%ployees of the closed ban, Pro!ided That pay%ent of separation pay or benefits shall be %ade only after the closed ban has been placed under li2uidation pursuant to the order of the onetary (oard under Section 4> of 9.#. :0*4 and that such pay%ent shall be %ade fro% a!ailable funds of the ban after deductin$ reasonable e'penses for recei!ership and li2uidation6 )<+ pay accrued utilities rentals and salaries of personnel of the closed ban for a period not e'ceedin$ three )4+ %onths fro% a!ailable funds of the closed ban6 )*+ collect loans and other clai%s of the closed ban and for the purpose %odify co%pro%ise or restructure the ter%s and conditions of such loans or clai%s as %ay be dee%ed ad!anta$eous to the interest of the creditors and clai%ants of the closed ban6
)0+
hire or retain pri!ate counsels as %ay be necessary6 ETDS#c
):+ borrow or obtain a loan or %ort$a$e pled$e or encu%ber any asset of the closed ban when necessary to preser!e or pre!ent dissipation of the assets or to redee% foreclosed assets of the closed ban or to %ini%i3e losses to the depositors and creditors6 );+ if the stipulated interest on deposits is unusually hi$h co%pared with the pre!ailin$ applicable interest rate the Corporation as recei!er %ay e'ercise such powers which %ay include
a reduction of the interest rate to a reasonable rate, Pro!ided That any %odification or reduction shall apply only to unpaid interest6 and )B+ e'ercise such other powers as are inherent and necessary for the effecti!e dischar$e of the duties of the Corporation as a recei!er. The (oard of Directors shall adopt such policies and $uidelines as %ay be necessary for the perfor%ance of the abo!e powers by personnel deputies and a$ents of the Corporation. SECTION 11. In all cases or actions filed by the Corporation as recei!er for the reco!ery of or in!ol!in$ any asset of the closed ban pay%ent of all docet and other court fees shall be deferred until the action is ter%inated with finality. #ny such fees shall constitute as a first lien on any 7ud$%ent in fa!or of the closed ban or in case of unfa!orable 7ud$%ent such fees shall be paid as ad%inistrati!e e'penses durin$ the distribution of the assets of the closed ban. PI%%Eu SECTION 1&. (efore any distribution of the assets of the closed ban in accordance with the preferences established by law the Corporation shall periodically char$e a$ainst said assets reasonable recei!ership e'penses and sub7ect to appro!al by the proper court reasonable li2uidation e'penses it has incurred as part of the cost of recei!ershipAli2uidation proceedin$s and collect pay%ent therefore fro% a!ailable assets. nwdeod #fter the pay%ent of all liabilities and clai%s a$ainst the closed ban the Corporation shall pay any surplus di!idends at the le$al rate of interest fro% date of taeo!er to date of distribution to creditors and clai%ants of the closed ban in accordance with le$al priority before distribution to the shareholders of the closed ban. SECTION 14. To carry out the purposes of this #ct the per%anent insurance fund shall be Three billion pesos )P4>>>>>>>>>.>>+. DEaCS# The Deposit Insurance -und shall be the capital account of the Corporation and shall principally consist of the followin$, )i+ the Per%anent Insurance -und6 )ii+ assess%ent collections sub7ect to the char$es enu%erated in Section 0 )d+ )iii+ reser!es for insurance and financial assistance losses6 and )i!+ retained earnin$s, Pro!ided That the reser!es for insurance and financial assistance losses and retained. earnin$s shall be %aintained at a reasonable le!el to ensure capital ade2uacy, Pro!ided further That the Corporation %ay within two )&+ years fro% the passa$e of this #ct and e!ery fi!e )*+ years thereafter conduct a study on the need to ad7ust the a%ount of the Per%anent Insurance -und insurance co!er assess%ent rate and assess%ent base and thereafter %ae the necessary reco%%endation to Con$ress. -or this purpose the Corporation %ay hire the ser!ices of actuarial consultants to deter%ine a%on$ others the affordability of assess%ent rates analysis and e!aluation of insurance ris and ad!isability of i%posin$ !aryin$ assess%ent rates or insurance co!er of different ban cate$ories. ai%I?P
SECTION 1<. 5hene!er an insured ban shall ha!e been closed by the onetary (oard pursuant to Section 4> of 9.#. :0*4 pay%ent of the insured deposits on such closed bans shall be %ade by the Corporation as soon as possible either )1+ by cash or )&+ by %ain$ a!ailable to each depositor a transferred deposit in another insured ban in an a%ount e2ual to insured deposit of such depositor, Pro!ided howe!er That the Corporation in its discretion %ay re2uire proof of clai%s to be filed before payin$ the insured deposits and that in any case where the Corporation is not satisfied as to the !iability of a clai% for an insured deposit it %ay re2uire final deter%ination of a court of co%petent 7urisdiction before payin$ such clai%, Pro!ided further That failure to settle the clai% within si' )0+ %onths fro% the date of filin$ of clai% for insured deposit where such failure was due to $ra!e abuse of discretion $ross ne$li$ence bad faith or %alice shall upon con!iction sub7ect the directors officers or e%ployees of the Corporation responsible for the delay to i%prison%ent fro% si' )0+ %onths to one )1+ year, Pro!ided further%ore That the period shall not apply if the !alidity of the clai% re2uires the resolution of issues of facts and or law by another office body or a$ency includin$ the case %entioned in the first pro!iso or by the Corporation to$ether with such other office body or a$ency. Pwrtot SECTION 1*. The Corporation upon pay%ent of any depositor as pro!ided for in subsection )c+ of this Section shall be subro$ated to all ri$hts of the depositor a$ainst the closed ban to the e'tent of such pay%ent. Such subro$ation shall include the ri$ht on the part of the Corporation to recei!e the sa%e di!idends and pay%ents fro% the proceeds of the assets of such closed ban and reco!eries on account of stocholders liability as would ha!e been payable to the depositor on a clai% for the insured deposits but such depositor shall retain his clai% for any uninsured portion of his deposit. #ll pay%ents by the corporation of insured deposits in closed bans partae of the nature of public funds and as such %ust be considered a preferred credit si%ilar to ta'es due to the National /o!ern%ent in the order of preference under #rticle &&<< of the New Ci!il Code, Pro!ided further That this preference shall be liewise effecti!e upon li2uidation proceedin$s already co%%enced and pendin$ as of the appro!al of this #ct where no distribution of assets has been %ade. ii?oIu SECTION 10. )a+ The Corporation shall co%%ence the deter%ination of insured deposits due the depositors of a closed ban upon its actual taeo!er of the closed ban. The Corporation shall $i!e notice to the depositors of the closed ban of the insured deposits due the% by whate!er %eans dee%ed appropriate by the (oard of Directors, Pro!ided That the Corporation shall publish the notice once a wee for at least three )4+ consecuti!e wees in a newspaper of $eneral circulation or when appropriate in a newspaper circulated in the co%%unity or co%%unities where the closed ban or its branches are located. Ia#E=D )b+ Pay%ent of an insured deposit to any person by the Corporation shall dischar$e the Corporation and pay%ent of a transferred deposit to any person by the new ban or by an insured ban in which a transferred deposit has been %ade a!ailable shall dischar$e the
Corporation and such new ban or other insured ban to the sa%e e'tent that pay%ent to such person by the closed ban would ha!e dischar$ed it fro% liability for the insured deposit. )c+ E'cept as otherwise prescribed by the (oard of Directors neither the Corporation or such other insured ban shall be re2uired to reco$ni3e as the owner of any portion of a deposit appearin$ on the records of the closed ban under a na%e other than that of the clai%ant any person whose na%e or interest as such owner is not disclosed on the records of such closed ban as part owner of said deposit if such reco$nition would increase the a$$re$ate a%ount of the insured deposits in such closed ban. cTCEIS )d+ The Corporation %ay withhold pay%ent of such portion of the insured deposit of any depositor in a closed ban as %ay be re2uired to pro!ide for the pay%ent of any liability of such depositor as a stocholder of the closed ban or of any liability of such depositor to the closed ban or its recei!er which is not offset a$ainst a clai% due fro% such ban pendin$ the deter%ination and pay%ent of such liability by such depositor or any other liable therefor. )e+ Fnless otherwise wai!ed by the Corporation if the depositor in the closed ban shall fail to clai% his insured deposits with the Corporation within two )&+ years fro% actual taeo!er of the closed ban by the recei!er or does not enforce his clai% filed with the corporation within two )&+ years after the twoyear period to file a clai% as %entioned hereinabo!e all ri$hts of the depositor a$ainst the Corporation with respect to the insured deposit shall be barred6 howe!er all ri$hts of the depositor a$ainst the closed ban and its shareholders or the recei!ership estate to which the Corporation %ay ha!e beco%e subro$ated shall thereupon re!ert to the depositor. Thereafter the Corporation shall be dischar$ed fro% any liability on the insured deposit. eierwo SECTION 1:. )a+ oney of the Corporation not otherwise e%ployed shall be in!ested in obli$ations of the 9epublic of the Philippines or in obli$ations $uaranteed as to principal and interest by the 9epublic of the Philippines, Pro!ided That the Corporation shall not sell or purchase any such obli$ations for its own account and in its own ri$ht and interest at any one ti%e a$$re$atin$ in e'cess of P1>>>>> without the appro!al of the Insurance Co%%issioner, #nd Pro!ided further That the Insurance Co%%issioner %ay wai!e the re2uire%ent of his appro!al with respect to any transaction or classes of transactions sub7ect to the pro!isions of this subsection for the period of ti%e and under such conditions as he %ay deter%ine. %%idtw )b+ The banin$ or checin$ accounts of the Corporation shall be ept with the (an$o Sentral n$ Pilipinas with the Philippine National (an or with any other ban desi$nated as depositary or fiscal a$ent of the Philippine /o!ern%ent. )c+ It is hereby declared to be the policy of the State that the Deposit Insurance -und of the Corporation shall be preser!ed and %aintained at all ti%es. #ccordin$ly all ta' obli$ations of the Corporation for a period of fi!e )*+ years reconed fro% the date of effecti!ity of this #ct shall be char$eable to the Ta' E'penditure -und )TE-+ in the annual /eneral #ppropriations #ct pursuant to the pro!isions of E'ecuti!e Order No. B4 series of 1B;0, Pro!ided That on the 0th
year and thereafter the Corporation shall be e'e%pt fro% inco%e ta' final withholdin$ ta' !alueadded ta' on assess%ents collected fro% %e%ber bans and local ta'es. )d+ 5hen the Corporation has deter%ined that an insured ban is in dan$er of closin$ in order to pre!ent such closin$ the Corporation in the discretion of its (oard of Directors is authori3ed to %ae loans to or purchase the assets of or assu%e liabilities of or %ae deposits in such insured ban upon such ter%s and condition as the (oard of Directors %ay prescribe when in the opinion of the (oard of Directors the continued operation of such ban is essential to pro!ide ade2uate banin$ ser!ice in the co%%unity or %aintain financial stability in the econo%y. SDTI=# The authority of the Corporation under the fore$oin$ para$raph to e'tend financial assistance to assu%e liabilities of purchase the assets of an insured ban %ay also be e'ercised in the case of a closed insured ban if the Corporation finds that the resu%ption of operations of such ban is !ital to the interests of the co%%unity or a se!ere financial cli%ate e'ists which threatens the stability of a nu%ber of bans possessin$ si$nificant resources, Pro!ided That the reopenin$ and resu%ption of operations of the closed ban shall be sub7ect to the prior appro!al of the onetary (oard. The Corporation %ay pro!ide any corporation ac2uirin$ control of %er$in$ or consolidatin$ with or ac2uirin$ the assets of an insured ban in dan$er of closin$ in order to pre!ent such closin$ or of a closed insured ban in order to restore to nor%al operations with such financial assistance as it could pro!ide an insured ban under this subsection, Pro!ided That within si'ty )0>+ days fro% date of assistance the Corporation shall sub%it a report thereof to the onetary (oard. The Corporation prior to the e'ercise of the powers under this Section shall deter%ine that actual payoff and li2uidation thereof will be %ore e'pensi!e than the e'ercise of its power, Pro!ided That when the onetary (oard has deter%ined that there are syste%ic conse2uences of a probable failure or closure of an insured ban the Corporation %ay $rant financial assistance to such insured ban in such a%ount as %ay be necessary to pre!ent its failure or closure andAor restore the insured ban to !iable operations under such ter%s and conditions as %ay be dee%ed necessary by the (oard of Directors sub7ect to concurrence by the onetary (oard and without additional cost to the Deposit Insurance -und. #DSTCa # syste%ic ris refers to the possibility that failure of one ban to settle net transactions with other bans will tri$$er a chain reaction depri!in$ other bans of funds leadin$ to a $eneral shutdown of nor%al clearin$ and settle%ent acti!ity. Syste%ic ris also %eans the lielihood of a sudden une'pected collapse of confidence in a si$nificant portion of the banin$ or financial syste% with potentially lar$e real econo%ic effects. -inally the Corporation %ay not use its authority under this subsection to purchase the !otin$ or co%%on stoc of an insured ban but it can enter into and enforce a$ree%ents that it deter%ines to be necessary to protect its financial
interests, Pro!ided That the financial assistance %ay tae the for% of e2uity or 2uasie2uity of the insured ban as %ay be dee%ed necessary by the (oard of Directors with concurrence by the onetary (oard, Pro!ided further That the Corporation shall dispose of such e2uity as soon as practicable. SECTION 1;. The Corporation is authori3ed to borrow fro% the (an$o Sentral n$ Pilipinas and the (an$o Sentral is authori3ed to lend the Corporation on such ter%s as %ay be a$reed upon by the Corporation and the (an$o Sentral such funds as in the 7ud$%ent of the (oard of Directors of the Corporation are fro% ti%e to ti%e re2uired for insurance purposes and financial assistance pro!ided for in Section 1:)c+ of this #ct, Pro!ided That any such loan as %ay be $ranted by the (an$o Sentral shall be consistent with %onetary policy, Pro!ided further That the rate of interest thereon shall be fi'ed by the onetary (oard but shall not e'ceed the treasury bill rate. te%%uP 5hen in the 7ud$%ent of the (oard of Directors the funds of the Corporation are not sufficient to pro!ide for an e%er$ency or ur$ent need to attain the purposes of this #ct the Corporation is liewise authori3ed to borrow %oney obtain loans or arran$e credit lines or other credit acco%%odations fro% any ban desi$nated as depository or fiscal a$ent of the Philippine /o!ern%ent, Pro!ided That such loan shall be of shortter% duration. SECTION 1B. 5ith the appro!al of the President of the Philippines the Corporation is authori3ed to issue bonds debentures and other obli$ations both local or forei$n as %ay be necessary for purposes of pro!idin$ li2uidity for settle%ent of insured deposits in closed bans as well as for financial assistance as pro!ided herein, Pro!ided That the (oard of Directors shall deter%ine the interest rates %aturity and other re2uire%ents of said obli$ations, Pro!ided further That the Corporation shall pro!ide for appropriate reser!es for the rede%ption or retire%ent of said obli$ation. #ll notes debentures bonds or such obli$ations issued by the Corporation shall be e'e%pt fro% ta'ation both as to principal and interest and shall be fully $uaranteed by the /o!ern%ent of the 9epublic of the Philippines. Such $uarantee which in no case shall e'ceed two ti%es the Deposit Insurance -und as of date of the debt issuance shall be e'pressed on the face thereof. The (oard of Directors shall ha!e the power to prescribe rules and re$ulations for the issuance reissuance ser!icin$ place%ent and rede%ption of the bonds herein authori3ed to be issued as well as the re$istration of such bonds at the re2uest of the holders thereof. inIisw SECTION &>. )a+ The Corporation shall annually %ae a report of its operations to the Con$ress as soon as practicable after the 1st day of anuary in each year. duIswr )b+ The financial transactions of the Corporation shall be audited by the Co%%ission on #udit in accordance with the principles and procedures applicable to co%%ercial corporate transactions and under such rules and re$ulations as %ay be prescribed by the Co%%ission on
#udit. The audit shall be conducted at the place or places where accounts of the Corporation are nor%ally ept. E'cept as to %atters relatin$ to the function of the Corporation as recei!er which shall be sub7ect to !isitorial audit only the representati!es of the Co%%ission on #udit shall ha!e access to all boos accounts records reports files and all other papers thin$s or property belon$in$ to or in use by the Corporation pertainin$ to its financial transactions and necessary to facilitate the audit and they shall be afforded full facilities for !erifyin$ transactions with the balances or securities held by depositories fiscal a$ents and custodians. #ll such boos accounts records reports files papers and property of the Corporation shall re%ain in possession and custody of the Corporation. SECTION &1. )a+ E!ery insured ban shall display at each place of business %aintained by it a si$n or si$ns and shall include a state%ent in all its ad!ertise%ents to the effect that its deposits are insured by the Corporation, Pro!ided That the (oard of Directors %ay e'e%pt fro% this re2uire%ent ad!ertise%ents which do not relate to deposits or when it is i%practical to include such state%ent therein. The (oard of Directors shall prescribe by re$ulations the for%s of such si$ns and the %anner of use. ?sewto )b+ No insured ban shall pay any di!idend on its capital stoc or interest on its capital notes or debentures )if such interest is re2uired to be paid only out of net profits+ or distribute any of its capital assets while it re%ains in default in the pay%ent of any assess%ent due to the Corporation, Pro!ided That if such default is due to a dispute between the insured ban and the Corporation o!er the a%ount of such assess%ent this subsection shall not apply if such ban shall deposit security satisfactory to the Corporation for pay%ent upon final deter%ination of the issue. )c+ 5ithout prior written consent by the Corporation no insured ban shall )1+ %er$e or consolidate with any noninsured ban or institution or con!ert into a noninsured ban or institution or )&+ assu%e liability to pay any deposits %ade in or si%ilar liabilities of any non insured ban or institution or )4+ transfer assets to any noninsured ban or institution in consideration of the assu%ption of liabilities for any portion of the deposits %ade in such insured ban. )d+ The Corporation %ay re2uire an insured ban to pro!ide protection and inde%nity a$ainst bur$lary defalcation losses arisin$ fro% dischar$e of duties by or particular acts of defaults of its directors officers or e%ployees and other si%ilar insurable losses. The (oard of Directors in consultation with the (an$o Sentral shall deter%ine the bondin$ re2uire%ent as it referred to directors officers and e%ployees of the insured ban as well as the for% and a%ount of the bond. 5hene!er any insured ban refuses to co%ply with any such re2uire%ent the Corporation %ay contract for such protection and add the cost thereof to the assess%ent otherwise payable by such ban. rw?ie%
)e+ #ny assess%ent payable by an insured ban under this #ct shall be sub7ect to pay%ent of interest co%puted fro% the date such assess%ent beca%e due and payable and at the le$al rate for loans as prescribed by law or appropriate authority and in case of willful failure or refusal to pay such assess%ent and interest thereon there shall be added a penalty e2ui!alent to twice the a%ount of interest payable as co%puted herein for each day such !iolations continue which the interest and penalty the Corporation %ay reco!er for its use, Pro!ided That the penalty shall not be applicable under the circu%stances stated in the pro!isions of subsection )b+ of this Section. )f+ The penalty of prision %ayor or a fine of not less than -ifty thousand pesos )P*>>>>.>>+ but not %ore than Two %illion pesos )P&>>>>>>.>>+ or both at the discretion of the court shall be i%posed upon any director officer e%ployee or a$ent of a ban, 1+ for any willful refusal to sub%it reports as re2uired by law rules and re$ulations6 TcDIa# &+ any un7ustified refusal to per%it e'a%ination and audit of the deposit records or the affairs of the institution6 4+ any willful %ain$ of a false state%ent or entry in any ban report or docu%ent re2uired by the Corporation6 <+ sub%ission of false %aterial infor%ation in connection with or in relation to any financial assistance of the Corporation e'tended to the ban6 *+
splittin$ of deposits or creation of fictitious loans or deposit accounts.
Splittin$ of deposits occurs whene!er a deposit account with an outstandin$ balance of %ore than the statutory %a'i%u% a%ount of insured deposit %aintained under the na%e of natural or 7uridical persons is broen down and transferred into two )&+ or %ore accounts in the na%eAs of natural or 7uridical persons or entities who ha!e no beneficial ownership on transferred deposits in their na%es within one hundred twenty )1&>+ days i%%ediately precedin$ or durin$ a bandeclared ban holiday or i%%ediately precedin$ a closure order issued by the onetary (oard of the (an$o Sentral n$ Pilipinas for the purpose of a!ailin$ of the %a'i%u% deposit insurance co!era$e6 =#SaD 0+ refusal to allow the Corporation to tae o!er a closed ban placed under its recei!ership or obstructin$ such action of the Corporation6 :+
refusal to turno!er or destroyin$ or ta%perin$ ban records6
;+ fraudulent disposal transfer or conceal%ent of any asset property or liability of the closed ban under the recei!ership of the Corporation6 B+ !iolation of or causin$ any person to !iolate the e'e%ption fro% $arnish%ent le!y attach%ent or e'ecution pro!ided under this #ct and the New Central (an #ct6
1>+ any willful failure or refusal to co%ply with or !iolation of any pro!ision of this #ct or co%%ission of any other irre$ularities andAor conductin$ business in an unsafe or unsound %anner as %ay be deter%ined by the (oard of Directors. )$+ The (oard of Directors is hereby authori3ed to i%pose ad%inistrati!e lines for any act or o%ission enu%erated in the precedin$ subsection and for !iolation of any order instruction rule or re$ulation issued by the Corporation a$ainst a ban andAor any of its directors officers or a$ents responsible for such act o%ission or !iolation in a%ounts as it %ay be deter%ined to be appropriate but in no case to e'ceed three ti%es the a%ount of the da%a$es or costs caused by the transaction for each day that the !iolation subsists tain$ into consideration the attendant circu%stances such as the nature and $ra!ity of the !iolation or irre$ularity and the si3e of the ban. aaodeP SECTION &&. No court e'cept the Court of #ppeals shall issue any te%porary restrainin$ order preli%inary in7unction or preli%inary %andatory in7unction a$ainst the Corporation for any action under this #ct. Etuni% The prohibition shall apply in all cases disputes or contro!ersies instituted by a pri!ate party the insured ban or any shareholder of the insured ban. The Supre%e Court %ay issue a restrainin$ order or in7unction when the %atter is of e'tre%e ur$ency in!ol!in$ a constitutional issue such that unless a te%porary restrainin$ order is issued $ra!e in7ustice and irreparable in7ury will arise. The party applyin$ for the issuance of a restrainin$ order or in7unction shall file a bond in an a%ount to be fi'ed by the Supre%e Court which bond shall accrue in fa!or of the Corporation if the court should finally decide that the applicant was not entitled to the relief sou$ht. DITE#c #ny restrainin$ order or in7unction issued in !iolation of this Section is !oid and of no force and effect and any 7ud$e who has issued the sa%e shall suffer the penalty of suspension of at least si'ty )0>+ days without pay. SECTION 1:. E'cept with the written consent of the Corporation no person shall ser!e as a director officer or e%ployee of an insured ban who has been con!icted or who is hereafter con!icted of any cri%inal offense in!ol!in$ dishonesty or a breach of trust. -or each willful !iolation of this prohibition the ban in!ol!ed shall be sub7ect to a penalty of not %ore than P1>> for each day this prohibition is !iolated which the Corporation %ay reco!er for its use. d%%ria SECTION 1;. If any pro!ision or section of this #ct or the application thereof to any person or circu%stances is held in!alid the other pro!isions or sections of this #ct in the application of such pro!ision or section to other persons or circu%stances shall not b e affected thereby. donsad
SECTION 1B. #ll #cts or parts of #cts and e'ecuti!e orders ad%inistrati!e orders or parts thereof which are inconsistent with the pro!isions of this #ct are hereby repealed. sro%to SECTION &>. This #ct shall tae effect upon appro!al. The Philippine Deposit Insurance Corporation shall co%%ence business upon or$ani3ation of the (oard of Directors and certification by the Treasurer of the Philippines that the Per%anent Insurance -und has been appropriated. TcEa#S #ppro!ed, une && 1B04
