Published 29 April 2019, The Daily Tribune

This is a continuation of my article on the legal remedies of a bank depositor in case his depository bank is ordered closed by Bangko Sentral ng Pilipinas (BSP). In my previous column, I advised that the depositor should file a claim with the Philippine Deposit Insurance Corporation (PDIC) to obtain his insured deposit and then, recover the uninsured portion in the liquidation proceedings involving the closed bank.

Let me now get down to brass tacks relating to the filing and processing of insurance coverage claim.

A. Determination of insured deposits/Rules on calculation of liability
1. Deduct any loan of the depositor from the amount of his deposit with the insured bank to determine the net insured deposit.

2. Individually-owned deposit account is insured separately from joint accounts regardless of whether the conjunction “and,” “or” “and/or” is issued. In determining such amount due to the depositor, there shall be added together all deposits in the bank maintained in the same right and capacity for his benefit either in his own name or in the name of others.

3. If the account is held jointly by two or more natural persons or two or more juridical entities, the maximum insured deposit shall be divided into as many equal shares as there are many individuals or juridical entities, unless a different sharing is stipulated in the deposit document.

4. If the account is held by a juridical person jointly with a natural person, the maximum insured deposit shall be presumed to belong entirely to the juridical person. The presumption can be overcome by evidence to the contrary, like a written stipulation that the deposit belongs to the natural person.

5. The aggregate of the interests of each co-owner over several joint accounts, whether owned by the same or different combination of individuals, juridical persons or entities shall likewise be subject to the maximum insured deposit of P500,000.

6. The maximum amount then that a depositor may claim from PDIC is P1,000,000, P500,000 for his individual account and another P500,000 for his aggregate interest over various joint accounts.

7. For ITF account, like Juan in trust for Maria, while the owner of the account is Juan, Maria, the beneficiary is the one entitled to claim the insurance deposit.

 B. Mode of paymentWhenever an insured bank shall have been closed by the BSP, payment of the insured deposits shall be made by PDIC as soon as possible either by 1) cash or 2) making available to each depositor a transferred deposit in another insured bank in an amount equal to insured deposit of such depositor, subject to submission of proof of claims.

C. Effect of payment of insured deposits
PDIC, upon the payment of any depositor, shall be subrogated to all the rights of the depositor against the closed bank to the extent of such payment. Subrogation shall include the right on the part of PDIC to receive the same dividends from the proceeds of the assets of such closed bank and recoveries on account of stockholders’ equity as would have been payable to the depositor on a claim for the insured deposit but such depositor shall retain his claim for any uninsured portion of his deposit.

D. Failure of depositor to claim insured deposits
Unless otherwise waived by PDIC, if the depositor in the closed bank shall fail to claim his insured deposit with PDIC within two years from actual takeover of the closed bank or does not enforce his claim filed with PDIC within two years after the two year period to file a claim, all rights of the depositor against the PDIC with respect to the insured deposit shall be barred; however, all rights of the depositor against the closed bank and its shareholders or the receivership estate to which the PDIC may have become subrogated shall thereupon revert to the depositor.

E. Examination of banks and deposit accounts
PDIC may conduct examination of banks with prior approval of the MB provided that no examination can be conducted within 12 months from the last examination date; provided however that PDIC may, in coordination with BSP conduct a special examination if there is a threatened or impending closure of a bank.

Notwithstanding RA 1405, RA 8791, RA 6426 and other laws, PDIC and/or BSP may inquire into or examine deposit accounts and all information related thereto in case there is a finding of unsafe and unsound banking practice.

F. Prohibition against splitting of 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 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 holiday or immediately preceding a closure order by the BSP for the purpose of availing of the maximum deposit insurance coverage. Such splitting of deposit is punishable by imprisonment and/or fine. In one case, the Supreme Court (SC) even held that monies deposited by individuals who benefitted from the unlawful splitting of deposits are considered laundered funds. (Philippine Deposit Insurance Corporation vs Gidwani, GR 234616, 20 June 2018).

G. Prohibition against issuance of TRO
No court, except the Court of Appeals, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against PDIC for any action on its part under the PDIC charter. The SC may issue a temporary restraining order or injunction when the matter is of extreme urgency involving a constitutional issues such that unless a TRO is issued, grave injustice or irreparable injury will arise.

The SC ruled that PDIC exercises judicial discretion and judgment in determining whether a claimant is entitled to deposit insurance claim, which determination results from its investigation of facts and weighing of evidence presented before it. The actions of PDIC with respect to determination of insured deposit accounts shall be final and executory and may not be set aside or restrained by the court except on petition for certiorari on the ground that the action was taken in excess of jurisdiction or with grave abuse of discretion as to amount to lack or excess of jurisdiction. The petition for certiorari may only be filed with the Court of Appeals within 30 days from notice of denial of claim for deposit insurance. (So vs Philippine Deposit Insurance Corporation, GR 230020, 19 March 2018).

The Regional Trial Court has no jurisdiction to nullify the action of PDIC in denying insurance claim. (Spouses Chugani vs PDIC, ibid).

These articles only reinforce my suggestion to choose wisely your depository bank and be spared from the inconvenience and hassle of recovering your insured deposits. And if despite a careful choice, your bank ends up in a financial mess, you know what to do to protect your interest. If there is any consolation, PDIC has been efficiently and effectively fulfilling its mandate under its charter to assist affected bank depositors.

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