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Pdic Law

The document discusses the Philippine Deposit Insurance Corporation (PDIC) Law, which was established in 1963 by Republic Act 3591 and amended in 2004 and 2009. It outlines the PDIC's roles as a deposit insurer, bank co-regulator, and receiver and liquidator of closed banks. The maximum deposit insurance coverage by the PDIC is P500,000 per depositor per bank. All operating banks are required to be PDIC members. The PDIC insures savings, checking, and time deposits in Philippine peso and foreign currencies held in member banks. Coverage is limited to P500,000 total across a depositor's accounts in a single bank, and P500,000 is insured separately per bank if deposits

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959 views

Pdic Law

The document discusses the Philippine Deposit Insurance Corporation (PDIC) Law, which was established in 1963 by Republic Act 3591 and amended in 2004 and 2009. It outlines the PDIC's roles as a deposit insurer, bank co-regulator, and receiver and liquidator of closed banks. The maximum deposit insurance coverage by the PDIC is P500,000 per depositor per bank. All operating banks are required to be PDIC members. The PDIC insures savings, checking, and time deposits in Philippine peso and foreign currencies held in member banks. Coverage is limited to P500,000 total across a depositor's accounts in a single bank, and P500,000 is insured separately per bank if deposits

Uploaded by

Kriztel Cuñado
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PDIC LAW

Republic Act No. 3591 or known as the “Philippine Deposit Insurance Corporation (PDIC) Law” as
amended by R.A. 9302 [August 12, 2004] and R.A. 9576 [April 29, 2009]).

What is the Philippine Deposit Insurance Corporation (PDIC)?


The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic
Act 3591. The law underwent amendments by R.A. 9302 [August 12, 2004] and R.A. 9576 [April 29,
2009]). Under its Charter, the corporation is mandated to give bank depositors protection and financial
stability by providing permanent and continuing deposit insurance. 

What does the PDIC do?


The Philippine Deposit Insurance Corporation has three basic functions: 
1. Deposit insurer. 
2. Act as co-regulator of banks. 
3. Receiver and liquidator of closed banks. 

What is maximum deposit insurance coverage of PDIC?


Since June 2009, the Maximum Deposit Insurance Coverage or MDIC is P500,000 per depositor per
bank. Simply, this means if a bank closes, then you can get up to P500,000 back from the PDIC. If you
had P100,000 in a savings account upon the time the bank closed, then you’ll get all of the P100,000
back from the PDIC. However, if you had P700,000 in the account, then you will only get the MDIC or
P500,000 back. 

What are covered by the PDIC Deposit Insurance?


PDIC insures valid deposits in domestic offices of its member-banks. Deposits are considered valid if,
upon determination by PDIC, are recorded in the bank’s records, and are evidenced by inflow of cash. 

BY DEPOSIT TYPES: BY DEPOSIT ACCOUNT: BY CURRENCY:


Savings Single Account Philippine Peso
Negotiable Order of Withdrawal Account “By”, “In Trust For” Foreign currencies
(NOW) (ITF), and “For the Account of” considered as part of BSP’s
(FAO) international reserves
Demand / Checking Joint Account
Special Savings
Time Deposits

Which banks are members of the PDIC?

All operating banks are members of the PDIC. It is mandatory. So this includes commercial
banks, savings banks, mortgage banks, development banks, rural banks, and cooperative banks.
In addition, stock savings and loan associations are also included, as well as domestic branches
of foreign banks.

What specific risks to a bank does PDIC cover?


The Philippine Deposit Insurance Corporation 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.

Do you need to pay any insurance premium to the PDIC to be covered?


No. The insurance premium is paid by the banks, not by the depositors.

What is NOT covered by the PDIC Deposit Insurance?


Republic Act No. 9576 stipulates that PDIC will not pay deposit insurance for the following
accounts or transactions:

 Investment products such as bonds, securities and trust accounts.


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

What is my PDIC deposit insurance coverage if I have several types of accounts in a bank?
Your PDIC insurance coverage will not increase and will be up to P500,000 in total. The 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. Let us say that you have P1M in a savings account in Bank Alpha, and another P1M in
a checking account also in Bank Alpha. If Bank Alpha closes, you will only get a total of
P500,000 from PDIC.

If I have deposits in different banks, what is my PDIC deposit insurance coverage?


It will be up to P500,000 per bank. 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.
How can I claim PDIC deposit insurance if my bank closes?
Depositors will be advised through media and posters at the premises of the closed bank 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.

The depositor must then file his deposit insurance claim within 24 months from date of bank
takeover. Failing to do so will forfeit their right to get the insured amount from the PDIC.
However, they may still make a claim against the assets of the closed bank. Page 26 of 40

References: https://fitzvillafuerte.com/pdic-philippine-deposit-insurance-corporation.html;
Republic Act No. 3591 or known as the “Philippine Deposit Insurance Corporation (PDIC) Law”
as amended by R.A. 9302 [August 12, 2004] and R.A. 9576 [April 29, 2009]).

Exercises:
Situational questions. Each answer must be supported by a legal basis.

1. A files his application for a business permit for his newly put up ‘Sari-Sari Store’. If a
government office or agency fails to approve or disapprove such application what are the
corresponding rights of A?

2. Explain Electronic Data Message; Electronic Document; and Electronic Signature.

3. What are the essential differences with the new If A has several types of accounts in a bank
what is his PDIC deposit insurance coverage?

4. If A has deposits in different banks, is his bank deposit per bank covered by the
Php500,000.00 PDIC insurance? 5. What are the deposits which are not covered by the PDIC
insurance? 

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