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The Law On Secrecy of Bank Deposits

This document outlines the rationale and provisions of Republic Act 1405, which prohibits the disclosure of or inquiry into deposits with banking institutions in the Philippines. The law was enacted to (1) encourage people to deposit their money in banks, (2) discourage private hoarding, and (3) enable banks to utilize deposits for loans to support economic development. It defines deposits and government bonds that are covered by confidentiality protections and lists exceptions provided under RA 1405 and other laws.

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Makoy Bixenman
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197 views17 pages

The Law On Secrecy of Bank Deposits

This document outlines the rationale and provisions of Republic Act 1405, which prohibits the disclosure of or inquiry into deposits with banking institutions in the Philippines. The law was enacted to (1) encourage people to deposit their money in banks, (2) discourage private hoarding, and (3) enable banks to utilize deposits for loans to support economic development. It defines deposits and government bonds that are covered by confidentiality protections and lists exceptions provided under RA 1405 and other laws.

Uploaded by

Makoy Bixenman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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AN ACT PROHIBITING DISCLOSURE OF OR

INQUIRY INTO, DEPOSITS WITH ANY


BANKING INSTITUTION AND PROVIDING
PENALTY THEREFOR
RATIONALE
(SECTION 1, RA 1405)

1.ENCOURAGE PEOPLE TO DEPOSIT THEIR


MONEY IN BANKS

2.DISCOURAGE PRIVATE HOARDING

3. ENABLE BANKS TO PROPERLY UTILIZE


DEPOSITS IN LOANS TO ASSIST IN THE
ECONOMIC DEVELOPMENT OF THE COUNTRY
TRANSACTIONS COVERED BY
CONFIDENTIALITY
(SECTION 2, RA 1405)

1.DEPOSITS- MONEY OR FUNDS PLACED IN A


BANK THAT CAN BE WITHDRAWN ON
DEPOSITOR’S ORDER OR DEMAND

2.INVESTMENTS IN GOVERNMENT BONDS-DEBT


SECURITIES WHICH ARE UNCONDITIONAL
OBLIGATIONS OF THE STATE AND BACKED BY ITS
FULL TAXING POWER.
EXAMPLES OF DEPOSITS:

A. SAVINGS DEPOSIT

B. CURRENT DEPOSIT

C. TIME DEPOSIT
JOSEPH VICTOR G. EJERCITO VS.
SANDIGANBAYAN AND PEOPLE OF
THE PHILIPPINES
509 SCRA 190. NOVEMBER 30, 2006

THE TRUST ACCOUNT OF JV EJERCITO WITH


THE EXPORT AND INDUSTRY BANK IS
CONSIDERED A DEPOSIT UNDER RA 1405.
EXAMPLES OF GOVERNMENT BONDS

A.TREASURY BILLS

B.TREASURY NOTES

C.RETAIL TREASURY BONDS

D.DOLLAR-LINKED PESO NOTES


TRANSACTIONS NOT COVERED BY
CONFIDENTIALITY

1. LETTERS OF CREDIT
2. TRUST RECEIPTS
3. BANK DRAFTS
4. PROMISSORY NOTES (NOTE: ALL OF THESE DO
NOT INVOLVE DEPOSITS OF MONEY)
5. BONDS NOT ISSUED BY THE GOVERNMENT OF
THE PHILIPPINES
EXCEPTIONS TO CONFIDENTIALITY UNDER
RA 1405

1. UPON WRITTEN PERMISSION OF THE


DEPOSITOR

2. IN CASES OF IMPEACHMENT
EXCEPTIONS TO CONFIDENTIALITY UNDER RA 1405

3. UPON ORDER OF COMPETENT COURT IN


CASES OF BRIBERY OR DERELICTION OF DUTY
OF PUBLIC OFFICIALS

4. IN CASES WHERE THE MONEY DEPOSITED


OR INVESTED IS THE SUBJECT MATTER OF
LITIGATION
EXCEPTIONS UNDER OTHER LAWS

1. VIOLATION OF ANTI-GRAFT AND CORRUPT


PRACTICES ACT

2. INVESTIGATION BY THE OMBUDSMAN OF BANK


ACCOUNTS AND RECORDS

3. DETERMINATION BY THE BIR COMMISSIONER OF


A DECEDENT’S GROSS ESTATE
EXCEPTIONS UNDER OTHER LAWS

4. INQUIRY BY THE AMLC INTO INVESTMENTS AND


DEPOSITS RELATED TO UNLAWFUL ACTIVITIES AND
MONEY LAUNDERING OFFENSES

5. CONDUCT OF ANNUAL TESTING BY THE BSP TO


PREVENT MONEY LAUNDERING

6. INVESTIGATION BY THE AMLC OF DEPOSITS AND


INVESTMENTS RELATED TO FINANCING OR ACTS
OF TERRORISM
EXCEPTIONS UNDER OTHER LAWS

7. EXAMINATION BY THE ANTI-TERRORISM


COUNCIL OF BANK ACCOUNTS

8. INQUIRY BY THE PDIC AND THE BSP IN CASES


OF UNSAFE OR UNSOUND BANKING PRACTICES

9. AUDIT OF GOVERNMENT DEPOSITS BY THE


COA
EXCEPTIONS UNDER OTHER LAWS

10. INVESTIGATION BY THE PCGG TO RECOVER


ILL-GOTTEN WEALTH

11. REVIEW OF RECORDS BY A REHABILITATION


RECEIVER
PROHIBITED DISCLOSURES BY BANK OFFICIALS
OR EMPLOYEES
(SECTION 3 OF RA 1405)

-DISCLOSURE BY ANY OFFICIAL/EMPLOYEE


OF A BANK TO ANY PERSON ANY INFORMATION
CONCERNING BANK DEPOSITS

1.DISCLOSURE TO INDEPENDENT AUDITORS

2.TRACING OF BANK DEPOSITS


AUTHORIZED DISCLOSURES

1.DISCLOSURE TO THE TREASURER OF THE


PHILIPPINES IN CASES INVOLVING UNCLAIMED
BALANCES

2.DISTRAINT AND GARNISHMENT IN COLLECTION


OF DELINQUENT TAXES

3.GARNISHMENT OF DEPOSITS IN SATISFACTION


OF JUDGMENT
AUTHORIZED DISCLOSURES

4. DISCLOSURE OF INFORMATION ON BANK


ACCOUNTS IN A CLOSED BANK

5. DISCLOSURES TO DIRECTORS
Thank you

17

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