Professional Documents
Culture Documents
PDIC Law
PDIC Law
Specific Functions
1. Bank examination
2. Liquidation of closed banks
3. Insurance
4. Assessment
5. Bank rehabilitation
6. Receivership of closed banks
Insurance
1. 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.
2. Compulsory insurance on all bank deposits.
*Deposits- the unpaid balance of money or its equivalent received by a bank in the usual course of
business, for which it is obliged to give credit to a commercial, checking, savings, time or thrift account,
or issued in accordance with the BSP rules and regulations and other applicable laws, together with such
other obligations of a bank.
3. All banks shall indicate the coverage of the PDIC in each passbook, certificate of time deposit and/or
cover of checkbook for demand deposit/NOW accounts stating the maximum amount of insurance.
4. The net amount to any depositor for deposits in an insured bank, after deducting any offsets, should not
exceed P500,000.
5. If the depositor has 2 or more accounts with the same bank, the maximum coverage pertains to the
sum of all such accounts maintained in the same right and capacity.
6. A joint account shall be insured separately from any individually-owned deposit account.
7. A depositor with single accounts and joint accounts may have insured deposits of up to P1,000,000.
8. Foreign currency deposits are also insured by PDIC. Depositors may receive payment in the same
currency in which the insured deposit is denominated.
Exclusions
1. Investment products such as bonds and securities trust accounts, and other similar instruments which
do not fall under the definition of a deposit;
2. Deposit accounts or transactions which are unfunded, or are fictitious or fraudulent;
3. Deposit accounts or transactions constituting, and/or emanating from, unsafe and/or unsound banking
practice/s, as determined by the PDIC;
4. Deposits that are determined to be the proceeds of an unlawful activity.
Rules:
1. PDIC liability is on a per bank basis. Accounts in a bank, even though in several branches, are to be
added together, provided that they are maintained in the same capacity and the same right for his
benefit either in his own name or in the name of others;
2. The insurance premiums are to be paid by the insured bank, not the depositors;
3. In case the depositor’s account is more than the insurance coverage, the balance may still be recovered
from the PDIC after the final liquidation of the remaining assets of the closed bank;
4. A joint account regardless of whether the conjunction “and”, “or”, “and/or” is used, shall be insured
separately from any individual-owned deposit account;
If the account is held jointly by two or more natural persons, or by two or more juridical persons
or entities, the maximum insured deposit shall be divided into as may 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 deposit shall be presumed to belong entirely to such person or entity; provide,
further, that the aggregate of the individuals, juridical persons or entities, shall likewise be
subject to the maximum insured deposit of P500,000; and
No owner/holder of any negotiable certificate of deposit shall be recognized as a depositor
entitled to the rights provided unless his name is registered as owner/holder thereof in the books
of the issuing bank.
5. The depositor of the closed insured bank has 2 years from date of bank takeover to file his deposit
insurance claim.
6. The payment by the PDIC to the depositor of his insured deposit discharges the PDIC from further
liability and subrogates the PDIC to all the rights of the depositor against the closed bank to the extent
of such payment.
7. 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.
8. Foreign currency deposits are also insured by PDIC pursuant to RA 6426 (“An act instituting a foreign
currency deposit system in the Philippines, and for other purposes”) and Central Bank (CB) Circular No.
Drills:
1. All deposits of any bank are insured with the:
A. BSP C. PDIC
B. Insurance Commission D. Monetary Board
2. Insured deposit means the net amount due to any depositor for deposits in an insured bank but should not
exceed:
A. P1,000,000 C. P250,000
B. P500,000 D. P300,000
3. Under the PDIC law, a joint account held by a juridical person or entity jointly with a natural person shall be
presumed to belong to the:
A. Juridical Person C. Both the juridical and natural persons
B. Natural Person D. One who first files the claim
4. The proceeds of the insurance shall be paid by the PDIC to the depositor whenever:
A. The depositor files the claim with supporting documents
B. The insured bank submits the list of qualified depositors
C. The insured bank is closed on account of insolvency
D. The order from the BSP to pay is issued
5. The claim must be filed within how many years from the actual takeover by the receiver?
A. 5 B. 3 C. 2 D. 1
6. The following are the three main functions of PDIC, except:
A. Deposit insurer
B. Receiver/liquidator of distressed banks
C. Loan functions
D. Co-regulator of the BSP over banking institutions
7. An employee of a large manufacturing firm earns a salary which is just a bit more than what he needs for a
comfortable living. He is thus able to still maintain a P10,000 savings account, a P20,000 checking account,
a P30,000 money market placement, and a P40,000 trust fund in a medium-sized commercial bank. Which
of the accounts are not deemed insured by the PDIC:
A. The P10,000 money market placement and the P20,000 trust fund
B. The P30,000 savings account and the P40,000 checking account
C. The P10,000 savings account and the P30,000 money market placement
D. The P20,000 savings account and the P40,000 trust fund
8. X is a depositor for AAA Bank. She has three (3) deposit accounts all under her name. One, in checking
account, one in saving account and another one in time deposit account. Each account has a balance of
P250,000. AAA Bank became insolvent. Philippine Deposit Insurance Corporation closed the Bank. X
therefore is unable to withdraw from all of the accounts. She then filed her claims with the Philippine deposit
Insurance Corporation. Which statement is most accurate?
A. X can claim a total a total of P500,000 for all the three (3) accounts
B. X can only claim from (1) account of P250,000
C. X can claim a total of P750,000 from all the three (30) accounts
D. X cannot claim anything from any deposit accounts
9. 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 the date of closure, but not exceed Five Hundred thousand Pesos
(P500,000).
A. Deposit
B. Insured Deposit
C. Transfer Deposit
D. Trust Funds
10. Statement No.1: A joint account shall be insured separately from any individually-owned deposit account.
Statement No.2: Membership of banks to PDIC is mandatory; hence, all operating banks are members of
PDIC.
A. First is false, second is true
B. Second is false, First is true
C. Both are false
D. Both are true
11. The PDIC shall not pay deposit insurance for the following accounts or transactions, except for:
A. Deposit accounts which are unfunded, fictitious or fraudulent
B. Deposit products constituting or emanating from unsafe and unsound banking practices
C. Deposit accounts that resulted from splitting of deposits
D. Foreign currency deposits
12. What is PDIC’s maximum deposit insurance coverage?
A. P150,000
B. 1,000,000
C. 500,000
D. 250,000
13. This occurs whenever a deposit account with an outstanding balance of more than the statutory maximum
amount of insured deposit maintained under the name of persons is broken down and transferred to two or
more accounts in the name of 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
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