196 DJVINA ON COMMERCIAL LAW: VI.

BANKING 197
A COMPREHENSIVE GUIDE VOLUMEII

D. Philippine Deposit Insurance Corporation b. Co-regulator of banks; and

c. Receiver and liquidator of closed banks.a 24
1. Basic Policy
102. Are all bank members of PDIC?
178, What is the Philippine Deposit Insurance Corporation (PDIC)?
Membership of banks to PDIC is mandatory, hence all operating
PDIC is a government instrumentality created in 1963 by banks are members of PDIC.
virtue of R.A. No. 3591 to insure deposits of all banks which are
Insurance premium is paid by the banks, not by the depositors.
entitled to the benefits of insurance. The latest amendments to R.A.
No. 3591 are contained in RA. No. 10846 signed into law on May 23, The bank is assessed one-fifth (1/5) of 1% per annum of the
2016. R.A. No. 10846 empowered PDIC with stronger authority to assessment base of the bank. 320
protect the depositing public and promote financial stability. 321 3. Concept of insured deposit
179. What is the declared policy of the State in relation to insurance 183. What is an insured deposit?
deposit coverage?
The term "insured deposit" means the amount due to any bona
It is the declared policy of the State to sti·engthen the mandatory fide depositor for legitimate deposits in an insured bank (net of any
deposit insurance coverage system to generate, preserve, maintain
loan obligation of the depositor to the insured bank) 826 as of the date
faith and confidence in the country's banking system, and protect it
of the closure but not to exceed P500,000.00. 327
from illegal schemes and machinations.
4. Liability to depositors
Towards this end, the Government must extend all means
and mechanisms necessary for the Corporation to effectively fulfill
184. When does the liability of PDIC to depositors attach?
its vital task of promoting and safeguarding the interests of the
depositing public by way of providing insurance coverage on bank Upon the designation of the PDIC as receiver of a closed bank,
deposits and in helping develop a sound and $table banking system. 3 i 2 it shall serve a notice of closure to the highest-ranking officer of
the bank present in the bank premises, or in the absence of such
180. What is PDIC's overall mandate? officer, post the notice of closure in the bank premises or on its main
PDIC exists to provide deposit insurance coverage for the entrance. The closure of the bank shall be deemed effective•upon the
depositing public to help promote public confidence and stability service of the notice of closure. Thereafter, the receiver shall take
in the economy. It ensures prompt payment of insured deposits, over the bank and exe1·cise the powers of the receiver as provided
exercises complementary supervision of banks, adopts responsive under the PDIC charter. 32~
resolution methods and applies efficient management ofreceivership
PDIC can only be liable if the insured bank actually receives
and liquidation functions. 323 deposit and the bank is ordered closed by BSP.
2. Powers and functions of PDIC
181. What are the principal powers and functions of PDIC?
a21Jbid.
The p1·incipal powers and functions of PDIC are as follows: s20Ibid.
826
a. Deposit Insurer; While it is not included in the definition of insured deposit, it is understood
that any-loan. obligation of the depositor should be deducted from his total deposit,
given the provision of the Civil Code on legal set off where two persons are creditors
321PDIC Frequently Asked Questions, see website of l'DIC. and debtors of each other.
a2 ~section 2, R.A. No. 3591. a27 Section 5(i), R.A. No. 3591, as amended.
32
32albid. RSection 14(a), ibid.
198 DIVINA ON COMMERCIAL LAW: VI. BANKING 199
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It only covers risk of closure of banks as ordered by BSP. It of the purposes of the PDIC Charter or included as part of the total
does not cover bank losses due to theft, fire, or closure by reason of deposits or of insured deposit: Provided, further, that subject to the
strike, existence of public disorder, revolution, or civil war. approval of the PDIC, any insured bank which is incorporated under
the laws of the Philippines which maintains a branch outside the
In one case, an investor placed his funds in a money market Philippines may elect to include for insmance its deposit obligations
placement with a finance company. On maturity, the invested funds payable only at such branch. 331
cannot be paid owing to the insolvency of the finance company, but
the latter referred the investor to its bank-affiliate which thereafter Note that the change in the definition of deposit under R.A. No.
issued a certificate of deposit to the same investor. The deposit was 1405 does not apply for insurance coverage purposes. A trust fund is
likewise not paid because the bank eventually closed. The investor not insured with PDIC.
filed an insurance claim covering the supposed deposit. PDIC denied Inter-branch deposits refer to funds of one branch deposited
it. The legality of the denial was thereafter assailed. The High Court in another branch and both branches are part of the same bank. As
sustained the PDIC, ruling that the liability of PDIC is statutory. It such, they are excluded from a bank's total liabilities and do not give
is based on the actual receipt by the bank of deposits not on a mere rise to insurable deposit liabilities.a~2
certification on the existence of deposit. 329
b. Commencement of liability
In another case, PDIC also denied the insurance claim when it
discovered that the mo-hey allegedly placed with the insured bank 186. When does PDIC commence determination of insured
was actually credited to the personal account of the bank President deposits?
and the certificates of time deposit (CTD) were not duly issued by
the bank but were mere replicas of unissued CTDs in the inventory PDIC shall commence the determination of insured deposits
submitted by the bank with PDIC. The Supreme Court found no due the depositors of a closed bank upon its actual takeover of the
grave abuse of discretion on the part of PDIC, holding that PDIC's closed bank. The Corporation shall give notice to the depositors
acts were consistent with law. aau of the closed bank of the insured deposits due them by whatever
means deemed appropriate by the Board of Directors: Provided, that
a. Deposit liabilities required to.be insured with PDIC the Corporation shall publish the notice once a week for at least
three (3) consecutive weeks in a newspaper of general circulation
185. What are the deposit liabilities required to be insured with or, when appropriate, in a newspaper circulated in the community
PDIC? or communities where the closed bank or its branches are located. 333
The term deposit means the unpaid balance of money or its c. Deposit accounts not entitled to payment
equivalent received by a bank in the usual course of business, and
for which it has given or is obliged to give credit to a commercial, 187. What are the deposit accounts not entitled to payment?
checking, savings, time or thrift account, evidenced by a passbook,
certificate of deposit, or other evidence of deposit issued in accordance PDIC shall not pay deposit insurance for the following accounts
with Bangko Sentl·al ng Pilipinas rules and regulations and other or transactions whether denominated, documented, recorded or
applicable laws, together with such other obligations of a bank, booked as deposit by the bank;
which, consistent with banking usage and practices. a. Investment products such as bonds and securities, trust
Any obligation of a bank which is payable at the office of the accounts, and other similar insti·uments;
bank located outside of the Philippines shall not be a deposit for any
831
Section 5(g), R.A. No, 3591, as amended by R.A. No. 10846.
329PDIC v. Court of Appeals, 283 SCH.A462. aa2PDIC v. Citibank, G.R. No. 170290, April 11, 2012.
3
330Spouses Chugani v. Philippine Deposit Insurance Corporation, G.R. No. a"Section 2l(a) Renumbered from Section 16(a) by R.A. No. 10846, June 11,
230037, March 19, 2018. 2016; As added by R.A. No. 9302, August 12, 2004.
200 DIVINA ON COMMERCIAL LAW: VI.BANK1NG 201
A COMPREHENSIVE GUIDE VOLUME II

b. Deposit accounts or transactions which are unfunded, or b. In determining such amount due to any depositor,
that are fictitious or fraudulent; there shall be added together all deposits in the bank
maintained in the same right and capacity for his or her
c. Deposit accounts or transactions constituting unsafe and benefit either in his or her own name or in the name of
unsound banking practices as determined by PDIC, in others.
consultation with BSP, after due notice and hearing, and
publication of a cease and desist order issued by the PDIC c. Insurance coverage is pe1· depositor not per account. The
against such deposit accounts or transactions; and type of account is immaterial.
d. Deposits that are determined to be the proceeds of an d. Individually owned deposit account is insured separately
unlawful activity as defined under the Anti-Money from joint accounts regardless of whether the conjunction
Laundering Law: 1~4 "and", "or", "and/or'' is issued. In determining such amount
due to the depositor, there shall be added together all
d. Extent of liability
deposits in the bank maintained in the same right and
188, X is a depositor of AAA Bank. She has three (3) deposit capacity for his benefit either in his own name or in the
accounts all under her name. One in a checking account, one in name of others.
a savings account, and another one in a time deposit account. e. If the account is held jointly by two or more natural
Each account has a balance of P250,000.00. AAA Bank became persons or two or more juridical entities, the maximum
insolvent. Philippine Deposit Insurance Corporation closed insured deposit shall be divided into as many equal shares
the Bank. X therefore is unable to withdraw from all of the as there are many individuals or juridical entities, unless
accounts. She then filed her claims with the Philippine Deposit a different sharing is stipulated in the deposit document.
Insurance Corporation. Which statement is most accurate1ss&
f. If the account is held by a juridical person jointly with
a. X can claim a total of P500,000.00 for all the three (3) a natural person, the maximum insured deposit shall be
accounts. presumed to belong entirely to the juridical person.
b. X can only claim from one (I) account of P250,000.00. g. The aggregate of the interests of each co-owner over
c. X can claim a total of P750,000.00 from all the three (3) several joint accounts, whether owned by the same or
accounts. different combination of individuals, juridical persons or
entities shall likewise be subject to the maximum insured
d. X cannot claim anything from any of the deposit accounts. deposit of P500,000.00. 330
e. Determination of insured deposits and calculation h. For ''in trust for account" (ITF account), like Juan in trust
of liability for Maria, while the owner of the account is Juan, Maria,
the beneficiary is the one entitled to claim the insurance
189. State the rules on determination of insured deposits and
deposit.
calculation of liability.
l, Deposits in other banks are insured separately.
a. Deduct any loan of the depositor from the deposit with the
insured bank to determine net insured deposit.

~34Section 5(g), R.A. No. 3591, as amended. 336

See Section 5(j), R.J\. No. 3591, as amended.
MS6 BAR 2012.
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202 DMNA ON COMMERCIAL LAW:
A COMPREHENSNE GUIDE VOLUMEII

190, "A" has the following accounts with ABC Bank. The Bank was
Thus, he can recover-P500,000.00 for his individual account
subsequently closed by BSP for insolvency. How much can "A" ~nd P500,000.00 for his various joint accounts.
recover from PDIC? The P500,000.00 trust fund and P260,000.00 uninsured portion
for his share in the vai.ious joint accounts should'be filed as a claim
P500,000 ~:1,·i 11gs
in the liquidation proceeding.
P500,000 ( 'L 11T(' 11 f

P500,000 192, How much can "A" recover if his join, accounts are maintained
'l'lll~l l•\111d
with ABC and B as follows?
P500,000 'l'inw lh•poc;it
P500,000 :--;;(\ i11i>
Pl million - Loan 0
Insurance Coverage - P500,000 P500,000 ( llll'\'I\I

Uninsured Pol'tion - P500,000 - Tr"QstFund P500,000 T,·11,-;1 l..111111 1,000,000 - A and/or ABC
P500,000 Ti11w 1),-p,i~il 500,000 - A and/or. B •
"A" may recover P500,000.00 from PDIC. While his total .,.
deposits amount to Pl.5 million, Pl million of such deposits shall Insurance - P500,000
be applied against his Pl million loan obligation. The P500,000.00 500,000 - ABC
Cove1·ageIndividual Account >
trust fund is not insured with PDIC. He may, however, file a claim A- P25o;otlo I

based on such trust fund in the liquidation proceeding. B- P250,000

191. How much can "~' recover from PDIC if he has the following For the joint account maintained with ABC, ;the maximum
joint accounts on top of his individual accounts? insured deposit is presumed to belong Jo ABC Corppratjon, ,.there
being no stipulation to the contrary. On the other }l;md, A is9entitled
to one-half (1/2) of the insured deposit for the joint account he holds
P500,000 ~:1,i11~>
with B.
P500,000 ( ,ll IT\'111
500,000 - A and/or B Thus, in addition to the P500,000.00 he may •e<>llect,from
P500,000 Tn1:-;t l·\111cl
500,000 - A and/or C PDIC for his individual account, he can also recover P250,000.00
P500,000 Titll(' lkpo,-.;it 500,000 - A and/or D corresponding to his interest in the joint acicdunt with B. • ,.
,·! .•

f. Mode of payment
Insurance - P500,000 500,000 - For Joint Account
Coverage Individual Account B - P250,000 193. What is the mode of payment by PDIC?
C - P250,000 Whenever an insured bank shall have been closed by the
D - P250,000 Monetary Board of BSP, payment of the insured deposits shall be
made by PDIC as soon as possible either by 1) cash, or 2) making
For the accounts he maintained with B,C, and D,"A'' is available to each depositor a transferred deposit in another insured
entitled to one-half (1/2) of the insured deposit or P250,000.00 bank in an amount equal to insured deposit of such depositor, subject
each or P750,000.00. The joint accounts are insured separately to submission of proof of claims. 337
from A's individual accounts but the aggregate interest of A in the
various accounts is subject to the maximum insurance deposit of 337
Section 19, renumbered from Section 14, R.A. No .. 8691, ae amended by
P500,000.00. RA No. 10846.
204 DMNA ON COMMERCIAL LAW: VI. BANKING 205
A COMPREHENSIVE GUIDE VOLUME Il

g. Effect of payment of insured deposit/pref erred h. Failure of depositor to claim insured deposits
credit
196, What is the effect of the failure of the depositor to file his
194. What is the effect of payment of insured deposits? insurance claim with PDIC?
PDIC, upon the payment of any depositor, shall be subrogated Unless otherwise waived by the Corporation, if the depositor
to all the rights of the depositor against the closed bank to the extent in the closed bank shall fail to claim his insured deposits with the
of such payment. Subrogation shall include the right on the part Corporation within two (2) years from actual takeover of the closed
of PDIC to receive the same dividends from the proceeds of the bank by the receiver, or does not enforce his claim filed with the
assets of such closed bank and recoveries on account of stockholders' corporation within two (2) years after the two-year period to file a
equity as would have been payable to the depositor on a claim for the claim as mentioned hereinabove, all rights of the depositor against
insured deposits: Provided, that such depositor shall retain his or the Corporation with respect to the insured deposit shall be barred;
her claim for any uninsured portion of his 01· he1·deposit, which legal however, all rights of the depositor against the closed bank and its
preference shall be the same as that of the subrogated claim of the shareholders or the receivership estate to which the Corporation may
PDIC for its payment of insured deposits. All payments by the PDIC have become subrogated, shall thereupon revert to the depositor.
of insured deposits in closed banks partake of the natm·e of public Thereafter the Corporation shall be discharged from any liability on
funds, and as such, must be considered a preferred credit in the the insured deposit. a4o
order of preference under Article 2244(9) of the New Civil Code:130 i. Examination of banks and deposit accounts
195. What is the effect of the failure by PDIC to settle the claim of 197. Does PDIC have the power to examine banks and deposit
the insured depositor? accounts?
"
The failure to settle the claim within six (6) months from date PDIC may conduct examination of banks with prior approval
of filing of the claim for insured deposit whether such failure was due of the Monetary Board: Provided, that no examination can be
to grave abuse of discretion, gross negligen!!e, bad faith, or malice conducted within 12 months from the last examination date:
shall, upon conviction, subject the directors, officers or employees Provided, however, that PDIC may, in coordination with the Bangko
of PDIC responsible for the delay, to imprisonment from six (6) Sentral, conduct a special examination as the Board of Directors, by
months to one (1) year; provided that the period shall not apply if the an affirmative vote of a majority of all of its members, if there is a
validity of the claim requires the resolution of issues of facts and/or threatened or impending closure of a bank: Provided, further, that,
law by PDIC or another office, subject further to the remedy of PDIC notwithstanding the provisions of R.A. No. 1405, as amended, R.A.
to require final determination of a court of competent jurisdiction No. 6426, as amended, R.A. No. 8791, and other laws, the PDIC and/
if PDIC is not satisfied as to the viability of the claim fo1·insured or the Bangko Sen tr al, may inquire into or examine deposit accounts
deposit. 339 and all information related thereto in case there is a finding of
unsafe or unsound banking practice: Provided, finally, that to avoid
overlapping of efforts, the examination shall maximize the efficient
use of the relevant reports, info1•mation, and findings of the Bangko
Sentral, which it shall make available to PDIC. 3n

338
Rcnumbered from Section 15 by R.A. No. 10846, June 11, 2016; as amended
84O
by P.D. No. 1940, June 27, 1984; R.A. No. 7400, April 13, 1992; R.A. No. 10846, June Section 21(e) Renumbered from Section 16(e) by R.A. No. 10846, June 11,
11, 2016. 2016; as amended by R.A. No. 9302, August 12, 2004.
338 341
Section 19, renumbered from Section 14 and amended by R.A. No. 10846, Section 9(8), as amended by R.A. No. 9302, August 12, 2004; R.A. No. 9576,
June 11, 2016. June 1, 2009.
206 DMNA ON CO:MMERCIALLAW: VI.BANKING 207
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j. Splitting of deposits k. Prohibition against issuances of temporary

restraining order
198, What is splitting of deposits and its effect?
Splitting of deposits occurs whenever a deposit account with an 199, State the remedies of the depositor who is aggrieved by any
outstanding balance of more than the statutory maximum amount action taken by PDIC under its charter.
of insured deposit maintained under the name of natural or juridical The actions of PDIC with respect to determination of insured
persons is broken down and transferred into two or more accounts
deposit accounts shall be final and executory and may not be set
in the name/s of natural or juridical persons or entities who have no
aside or restrained by the court except on petition for certiorari
beneficial ownership on transferred deposits in their names within
120 days immediately preceding or during a bank-declared holiday on the ground that the action was taken in excess of jurisdiction
or immediately preceding a closure order by the BSP for the purpose or with grave abuse of discretion as to amount to lack or excess of
of availing of the maximum deposit insurance coverage. Such jurisdiction, The petition for certiorari may only be filed within 30
splitting of deposit is punishable by imprisonment and/or fine.842 days from notice of denial of claim for deposit insurance. 846

In one case, the Supreme Court even held that monies deposited The Regional Trial Court has no jurisdiction to nullify the
by individuals who benefitted from the unlawful splitting of deposits action of PDIC in denying insurance claim. 846
are considered laundered funds. 848
200. What court may issuean injunctionagainst PDIC for any action
In cases wherein the transfer into two or more accounts occurred on its part which is tainted with grave abuse of discretion?
before the 120-day period, the PDIC does not discount the possibility
that there may have been a transfer for valid consideration, but No court, except the Court of Appeals, shall issue any temporary
in the absence of transfer documents found in the records of the 1·estraining order, preliminary injunction or preliminary mandatory
bank at the time of closu1·e, the presumption arises that the source injunction against PDIC for. any action on its part under the PDIC
account remained with the transferor. Consequently, even if the charter. 347
transfer into different accounts was not made within 120 days
immediately preceding bank closure, the gi·ant of deposit insurance This prohibition shall apply in all cases, disputes or
to an account found to have originated from another deposit is not controversies instituted by a private party, the insured bank, or any
automatic because the transferee still has to prove that the transfer shareholder of the insured bank. 348
was for a valid consideration through documents kept in the custody The Supreme Court may issue a restraining order or injunction
of the bank. when the matter is of extreme urgency involving a constitutional
In this case, even assuming that a depositor donated the issue, such that unless a temporary restraining order is issued,
amount contained in the subject savings account, not one document grave injustice and irreparable injury will arise. The party applying
evidencing the alleged donation is in the custody or possession of the for the issuance of a restraining order or injunction shall file a bond
bank upon takeover by PDIC. Thus, the PDIC properly relied on the i;n.an amount to be fixed by the Supreme Court, which bond shall
records of the bank which showed that donor-depositor's accounts accrue in favor of the Corporation if the court should finally decide
remained in his name and for his account. As such, it is subject to that the applicant was not entitled to the relief sought,M9
the rule on maximum insurance deposit 1·ecovery.8H
345S0 v. Philippine Deposit Insurance Co1•poration, G.R. No. 230020, March
19, 2018.
342
Section 26(f)(l)(e); BAR 2019. a46 Spouses Chugani v. PDIC, ibid.
34
aPhilippine Deposit Ineurance Corporation v. Gidwani, G.R. No. 234616, s47 Section 27, Renumbered from Section 22, R.A. No. 10846, June 11, 2016; AB
June 20, 2018. added by R.A. No. 9302, August 12, 2004.
344
Carlito Linsangan v. Philippine Deposit Insurance Corporation, G.R. No. S4llSection27, as added by R.A. No. 9302, August 12, 2004.
228807, Febmary 11, 2019. 349Jbid.
 VI. BANKING 209
208 DIVINA ON COMMERCIALLAW:
A COMPREHENSIVE GUIDE VOLUMEII

For this purpose, the PDIC may:

Any restraining order or injunction issued in violation of the
above rule is void and of no force and effect and any judge who has 1. Determine a resolution package for the bank;
issued the same shall suffer the penalty of suspension of at least 60 u. Identify and, with the approval of the Monetary
days without pay.aw Board, pre-qualify possible acquirers 01·investors;
5. Concept of bank resolution iii. Authorize pre-qualified acquirers or investors to
conduct due diligence on the bank, for purposes of
201, What does resolution mean in the context of the PDIC determining the valuation of a bank through an
charter? objective and thorough review and appraisal of its
assets and liabilities, and assessment of risks or
The term resolution refers to the actions undertaken by the events that may affect its valuation; and
Corporation under Section 11 of the PDIC Charter to:
iv. Conduct a bidding to determine the acquirer of the
a. Protect depositors, creditors and the Deposit Insurance bank.~5a
Fund (DIF); 4. In determining the appropriate resolution method for a
b. Safeguard the continuity of essential banking services or bank, the PDIC shall consider the:
maintain financial stability; and i. Fair market value of the assets of the bank, its
c. Prevent deterioration or dissipation of bank assets. 301 franchise, as well as the amount of its liabilities;
ii. Availability of a qualified investor;
202. What is the procedure for bank resolution?
m. Least cost to the DIF; and
1. The PDIC, in coordination with the Bangko Sentral ng
Pilipinas, may commence the resolution of a bank under 1v. Interest of the depositing public. 35 •
this section upon: xxxx
a. Failure of prompt corrective ·actions as declared by 5. Upon a determination by the Corporation that the blank
the Monetary Board; or may not be resolved, the Monetary Board may act in
accordance with Section 30 of R.A. No. 7653 or the New
b. Request by a bank to be placed under resolution.
Central Bank Act.
2. The Corporation shall inform the bank of its eligibility for
6. The foregoing provisions on bank 1·esolution are without
entry into resolution.a 02
prejudice to any action that the Monetary Board may
3. Within a period of 180 days from a bank's entry into take under existing laws.
resolution, the Corporation, through the affirmative
vote of at least five (5) members of the PDIC Board, 6. Role of PDIC in relation to banks in distress
shall determine whether the bank may be resolved a) Closure and takeover;an,;
through the purchase of all its assets and assumption of
all its liabilities, or merger or consolidation with, or its b) Conservatorship;
acquisition, by a qualified investor. c) Receivership.

msection ll(e), ibid.

aoolbid. 864
Section ll(f).
a"1Section 5(s), as added by R.A. No. 10846. 365
Supra.
s62 Section 11, ibid.
210 DIVINA ON COMMERCIAL LAW: VI. BANKING 211
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203. State the functions of PDIC as a receiver. 5. Collect loans and other claims of the closed bank, and
The provisions of other laws, general or special, to the contrary for the purpose, modify, compromise or restructure the
notwithstanding, whenever it shall be appropriate for the Monetary te1·ms and conditions of such loans or claims as may be
Board of the Bangko Sentral ng Pilipinas to appoint a receiver of deemed advantageous to the interest of the creditors and
any banking institution pursuant to existing laws, the Monetary claimants of the closed bank;
Board shall give prior notice and appoint PDIC as receiver. 6. Hire or retain private counsels as may be necessary;
PDIC, as receiver, shall control, manage and administer the Borrow or obtain a loan, or mortgage, pledge or encumber
7.
affairs of the closed bank. Effective immediately upon takeover as any asset of the closed bank, when necessary to preserve or
receiver of such bank, the powers, functions and duties, as well as all prevent dissipation of the assets, or to redeem foreclosed
allowances, remunerations and perquisites of the directors, officers, assets of the closed bank, or to minimize losses to the
and stockholders of such bank are suspended, and the relevant depositors and creditors;
provisions of the Articles of Incorpo1·ation and By-laws of the closed
bank are likewise deemed suspended. 8. If the stipulated interest on deposits is unusually high
compared with the prevailing applicable interest rate, the
The assets of the closed bank under receivership shall be Corporation as receiver may exercise such powers which
deemed in custodia legis in the hands of the receiver. From the time may include a reduction of the interest rate to a reasonable
the closed bank is placed under such receivership, its assets shall rate: Provided, that any modification or reduction shall
not be subject to attachment, garnishment, execution, levy or any
apply only to unpaid interest; and
other court processes.
9. Exercise such other powers as are inherent and necessary
In addition to the powers of a receiver pursuant to existing
for the effective discharge of the duties of the Corporation
laws, PDIC is empowered to:
as a receiver. 3 ~6
1. Bring suits to enforce liabilities to or recoveries of the
closed bank; 7. Liquidation

2. Appoint and hire persons or entities of recognized 204. What follows after the order of bank's closure by the BSP?
competence in banking or finance as its deputies and
assistants, to perform such powers and functions of the Whenever a bank is ordered closed by the Monetary Board,
Corporation as receiver or liquidator of the closed bank; PDIC shall be designated as receiver and it shall proceed with the
takeover and liquidation of the closed bank in accordance with this
3. Suspend or terminate the employment of officers and Act. For this purpose, banks closed by the Monetary Board shall no
employees of the closed bank: Provided, that payment of longer be rehabilitated. 3fi 7
separation pay or benefits shall be made only after the
closed bank has been placed under liquidation pursuant TRUTH IN LENDING ACT (R.A. NO. 3765)
to the order of the Monetary Board under Section 30 of
R.A. No. 7653, and that such payment shall be made from 205. What is the purpose of the Truth in Lending Act?
available funds of the bank after deducting reasonable The purpose of the law is to complement the then Usury Law
expenses for receivership and liquidation; and to protect the public from lack of awareness of the true cost
4. Pay accrued utilities, rentals and salaries of personnel of credit by assuring a full disclosure of such cost with a view of
of the closed bank, for a period not exceeding three (3)
months, from available funds of the closed bank; 366 Section 13, as added by R.A. No. 10846.
307
Section 12, as added by R.A. No. 10846.