PDIC LAW

COVERAGE OF PDIC:

“(j) The term insured deposit means the amount due to any bonafide
depositor for legitimate deposits in an insured bank as of the date of
closure but not to exceed Five hundred thousand pesos (P500,000.00).
Such amount shall be determined according to such regulations as the
Board of Directors may prescribe.

In determining such amount due to any depositor, there shall be added

together all deposits in the bank maintained in the same right and
capacity for his or her benefit either in his or her own name or in the
name of others.

A joint account regardless of whether the conjunction ‘and’, ‘or’,

‘and/or’ is used, shall be insured separately from any individually-
owned deposit account:

 Provided, That (1) 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 many
equal shares as there are individuals, juridical persons or
entities, unless a different sharing is stipulated in the document
of deposit, and

 (2) 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 juridical person
or entity:

 Provided, further, That the aggregate of the interest of each co-

owner over several joint accounts, whether owned by the same
or different combinations of individuals, juridical persons or
entities, shall likewise be subject to the maximum insured
deposit of Five hundred thousand pesos (P500,000.00):
Provided, furthermore, That the provisions of any law to the
contrary notwithstanding, no owner/holder of any passbook,
certificate of deposit, or other evidence of deposit shall be
recognized as a depositor entitled to the rights provided in this
Act unless the passbook, certificate of deposit, or other
evidence of deposit is determined by the Corporation to be
an authentic document or record of the issuing bank:
Provided, finally, That in case of a condition that threatens the
monetary and financial stability of the banking system that may
have systemic consequences, as defined in Section 22 hereof,
as determined by the Monetary Board, the maximum deposit
insurance cover may be adjusted in such amount, for such a
period, and/or for such deposit products, as may be
determined by a unanimous vote of the Board of Directors
 in a meeting called for the purpose and chaired by the Secretary
of Finance, subject to the approval of the President of the
Philippines.

The Corporation shall not pay deposit insurance for the following accounts or
transactions:

Hence, the following are not covered by the PDIC insurance:

IPbts “(1) Investment products such as bonds and securities, trust

accounts, and other similar instruments;

DaFF“(2) Deposit accounts or transactions which are fictitious or

fraudulent as determined by the Corporation;

DAT-uubp“(3) Deposit accounts or transactions constituting, and/or

emanating from, unsafe and unsound banking practice/s, as determined by
the Corporation, in consultation with the Bangko Sentral ng Pilipinas, after
due notice and hearing, and publication of a directive to cease and desist
issued by the Corporation against such deposit accounts, transactions or
practices; and

D-pua- 9160“(4) Deposits that are determined to be the proceeds of an

unlawful activity as defined under Republic Act No. 9160, as amended.

[ID-FUbU]

ASSESSMENT OF MEMBER BANKS

The assessment rate shall be determined by the Board of Directors: Provided,

(DEPOSIT INSURANCE)

1. That the assessment rate shall not exceed one-fifth (1/5) of one per centum
(1%) per annum. (AB=Total Deposit Liability)
2. The semi-annual assessment for each insured bank shall be in the amount of
the product of one-half (1/2) the assessment rate multiplied by the assessment
base but in no case shall it be less than Five thousand pesos (P5,000.00).
3. The assessment base (AB) shall be the amount of the liability of the bank for
deposits as defined under subsection (g) of Section 5 without any deduction
for indebtedness of depositors.

4. “In addition, the Board of Directors may establish a risk-based assessment

system (RiBAS) and impose a risk-based assessment rate which shall not
exceed two-fifth (2/5) of one per centum (1%) per annum multiplied by the
assessment base.
“(d) All assessment collections and income from operations after expenses and
charges shall be added to the DIF under Section 17 hereof.

Such expenses and charges are:

1. the operating costs and expenses of the Corporation for the calendar year;
2. additions to reserve to provide for insurance and financial assistance losses,
net of recoverable amounts from applicable assets and collaterals, during the
calendar year; and
3. the net insurance and financial assistance losses sustained in said calendar year.

Effect of failure of insured bank to pay assessment:

“(h) Should any insured bank fail or refuse to pay any assessment required to be paid
by such bank under any provision of this Act, and should the bank not correct such
failure or refusal within thirty (30) days after written notice has been given by the
Corporation to an officer of the bank citing this subsection, and stating that the bank
has failed or refused to pay as required by the law, the Corporation may, at its
discretion, file a case for collection before the appropriate court without
prejudice to the imposition of administrative sanctions allowed under the
provisions of this law on the bank officials responsible for the nonpayment of
assessment fees.”

“Whenever a bank is determined by the Bangko Sentral ng Pilipinas to be

capital deficient, the Corporation may conduct an insurance risk evaluation on
the bank to enable it to assess the risks to the DIF.

Such evaluation may include the determination of:

1. the fair market value of the assets and liabilities of a bank; or

2. the risk classification of a bank; or
3. possible resolution modes under Section 11 of this Act, subject to such terms
and conditions as the PDIC Board may prescribe.”

Merger or Consolidation:

“(e) Within a period of one hundred eighty (180) days from a bank’s entry into
resolution, the Corporation, through the affirmative vote of at least five (5)
members of the PDIC Board, shall determine whether the bank may be resolved
through the purchase of all its assets and assumption of all its liabilities, or
merger or consolidation with, or its acquisition, by a qualified investor.

“For this purpose, the Corporation may:

“(1) Determine a resolution package for the bank;

“(2) Identify and, with the approval of the Monetary Board, pre-qualify
possible acquirers or investors;
 “(3) Authorize pre-qualified acquirers or investors to conduct due
diligence on the bank, for purposes of determining the valuation of a
bank through an objective and thorough review and appraisal of its
assets and liabilities, and assessment of risks or events that may affect
its valuation; and

“(4) Conduct a bidding to determine the acquirer of the bank.

In determining the appropriate resolution method for a bank, the Corporation

shall consider the:

DETERMINING THE APPROPRIATE RESOLUTION:

F“(1) Fair market value of the assets of the bank, its franchise, as well
as the amount of its liabilities;

AI“(2) Availability of a qualified investor;

L“(3) Least cost to the DIF; and

D“(4) Interest of the depositing public.

“LIQUIDATION OF A CLOSED BANK

“SEC. 12. (a) Whenever a bank is ordered closed by the Monetary Board, the
Corporation shall be designated as receiver and it shall proceed with the takeover and
liquidation of the closed bank in accordance with this Act. For this purpose, banks
closed by the Monetary Board shall no longer be rehabilitated.”

Bank:

- Effect if bank is ordered closed by the MB:

1. Corporation (PDIC) shall be designated as Receiver
2. Bank shall not be rehabilitated

AUTHORITIES OF A RECEIVER AND EFFECTS OF PLACEMENT OF A

BANK UNDER LIQUIDATION:

“SEC. 13. (a) The receiver is authorized to adopt and implement, without need of
consent of the stockholders, board of directors, creditors or depositors of the closed
bank, any or a combination of the following modes of liquidation: [CL-APAL]

“(1) Conventional liquidation; and

“(2) Purchase of assets and/or assumption of liabilities.

“(b) In addition to the powers of a receiver provided under existing laws, the
Corporation, as receiver of a closed bank, is empowered to:

“(1) Represent and act for and on behalf of the closed bank;

“(2) Gather and take charge of all the assets, records and affairs of the
closed bank, and administer the same for the benefit of its creditors;

“(3) Convert the assets of the closed bank to cash or other forms of
liquid assets, as far as practicable;

“(4) Bring suits to enforce liabilities of the directors, officers,

employees, agents of the closed bank and other entities related or
connected to the closed bank or to collect, recover, and preserve all
assets, including assets over which the bank has equitable interest;

“(5) Appoint or hire persons or entities of recognized competence in

banking, finance, asset management or remedial management, as its
deputies, assistants or agents, to perform such powers and functions of
the Corporation as receiver of the closed bank, or assist in the
performance thereof;

“(6) Appoint or hire persons or entities of recognized competence in

forensic and fraud investigations;

“(7) Pay accrued utilities, rentals and salaries of personnel of the

closed bank for a period not exceeding three (3) months, from
available funds of the closed bank;

“(8) Collect loans and other claims of the closed bank and for this
purpose, modify, compromise or restructure the terms and conditions
of such loans or claims as may be deemed advantageous to the interests
of the creditors of the closed bank;

“(9) Hire or retain private counsel as may be necessary;

“(10) Borrow or obtain a loan, or mortgage, pledge or encumber any

asset of the closed bank, when necessary to preserve or prevent
dissipation of the assets, or to redeem foreclosed assets of the closed
bank, or to minimize losses to its depositors and creditors;

“(11) If the stipulated interest rate on deposits is unusually high

compared with prevailing applicable interest rates, the Corporation as
receiver, may exercise such powers which may include a reduction of
the interest rate to a reasonable rate: Provided, That any modifications
or reductions shall apply only to earned and unpaid interest;

“(12) Utilize available funds of the bank, including funds generated by

the receiver from the conversion of assets to pay for reasonable costs
and expenses incurred for the preservation of the assets, and
 liquidation of, the closed bank, without need for approval of the
liquidation court;

“For banks with insufficient funds, the Corporation is authorized to

advance the foregoing costs and expenses, and collect payment, as and
when funds become available.

“(13) Charge reasonable fees for the liquidation of the bank from the
assets of the bank: Provided, That payment of these fees, including any
unpaid advances under the immediately preceding paragraph, shall be
subject to approval by the liquidation court;

“(14) Distribute the available assets of the closed bank, in cash or

in kind, to its creditors in accordance with the Rules on
Concurrence and Preference of Credits under the Civil Code or
other laws;

“(15) Dispose records of the closed bank that are no longer needed in
the liquidation in accordance with guidelines set by the PDIC Board of
Directors, notwithstanding the laws on archival period and disposal of
records; and

“(16) Exercise such other powers as are inherent and necessary for the
effective discharge of the duties of the Corporation as receiver.

“(c) After the payment of all liabilities and claims against the closed bank, the
Corporation shall pay surplus, if any, dividends at the legal rate of interest from
date of takeover to date of distribution to creditors and claimants of the closed
bank in accordance with the Rules on Concurrence and Preference of Credits
under the Civil Code or other laws before distribution to the shareholders of the
closed bank.

“(d) The officers, employees, deputies, assistants and agents of the receiver shall have
no liability and shall not be subject to any action, claim or demand in connection with
any act done or omitted to be done by them in good faith in connection with the
exercise of their powers and functions under this Act and other applicable laws, or
other actions duly approved by the court.

The placement of a bank under liquidation shall have the following effects:

EFFECTS of placing the bank under liquidation:

“(1) On the corporate franchise or existence

“Upon placement by the Monetary Board of a bank under liquidation, it shall

continue as a body corporate until the termination of the winding-up period
under Section 16 of this Act. Such continuation as a body corporate shall only
be for the purpose of liquidating, settling and closing its affairs and for the
disposal, conveyance or distribution of its assets pursuant to this Act. The
receiver shall represent the closed bank in all cases by or against the closed bank
and prosecute and defend suits by or against it. In no case shall the bank be
reopened and permitted to resume banking business after being placed under
liquidation.

“(2) On the powers and functions of its directors, officers and stockholders
(DOS – terminated – Receiver shall exercise all authorities)

“The powers, voting rights, functions and duties, as well as the allowances,
remuneration and perquisites of the directors, officers, and stockholders of such
bank are terminated upon its closure. Accordingly, the directors, officers, and
stockholders shall be barred from interfering in any way with the assets,
records, and affairs of the bank.

“The receiver shall exercise all authorities as may be required to facilitate the
liquidation of the closed bank for the benefit of all its creditors.

“(3) On the assets

“Upon service of notice of closure as provided in Section 14 of this Act, all the
assets of the closed bank shall he deemed in custodia legis in the hands of the
receiver, and as such, these assets may not be subject to attachment,
garnishment, execution, levy or any other court processes. [ not subject to
GALEO court processes]

A’ judge, officer of the court or any person who shall issue, order, process or cause
the issuance or implementation of the garnishment order, levy, attachment or
execution, shall be liable under Section 27 of this Act: Provided, however, That
collaterals securing the loans and advances granted by the Bangko Sentral ng
Pilipinas shall not be included in the assets of the closed bank for distribution
to other creditors: Provided, further, That the proceeds in excess of the amount
secured shall be returned by the Bangko Sentral ng Pilipinas to the receiver.

“Any preliminary attachment or garnishment on any of the assets of the closed

bank existing at the time of closure shall not give any preference to the attaching or
garnishing party. Upon motion of the receiver, the preliminary attachment or
garnishment shall be lifted and/or discharged.

“(4) On labor relations

“Notwithstanding the provisions of the Labor Code, the employer-employee

relationship between the closed bank and its employees shall be deemed
terminated upon service of the notice of closure of the bank in accordance
with this Act. Payment of separation pay or benefits provided for by law shall be
made from available assets of the bank in accordance with the Rules on
Concurrence and Preference of Credits under the Civil Code or other laws.

‘(5) Contractual obligations

“The receiver may cancel, terminate, rescind or repudiate any contract of the
closed bank that is not necessary for the orderly liquidation of the bank, or is
grossly disadvantageous to the closed bank, or for any ground provided by law.

“(6) On interest payments

“The liability of a bank to pay interest on deposits and all other obligations as
of closure shall cease upon its closure by the Monetary Board without prejudice
to the first paragraph of Section 85 of Republic Act No. 7653 (the New Central
Bank Act): Provided, That the receiver shall have the authority, without need
for approval of the liquidation court, to assign, as payment to secured
creditors, the bank assets serving as collaterals to their respective loans up to
the extent of the outstanding obligations, including interest as of date of closure
of the hank, as validated by the receiver. The valuation of the asset shall be based
on the prevailing market value of the collaterals as appraised by an independent
appraiser on an ‘as is where is’ basis.

“(7) Liability for penalties and surcharges for late payment and nonpayment
of taxes

“From the time of closure, the closed bank shall not be liable for the payment
of penalties and surcharges arising from the late payment or nonpayment of
real property tax, capital gains tax, transfer tax and similar charges.

“(8) Bank charges and fees on services

“The receiver may impose, on behalf of the closed bank, charges and fees for
services rendered after bank closure, such as, but not limited to, the execution
of pertinent deeds and certifications.

“(9) Actions pending for or against the closed bank (180 days suspension
except if SC)

“Except for actions pending before the Supreme Court, actions pending for or
against the closed bank in any court or quasi-judicial body shall, upon motion of
the receiver, be suspended for a period not exceeding one hundred eighty (180)
days and referred to mandatory mediation. Upon termination of the mediation,
the case shall be referred back to the court or quasi-judicial body for further
proceedings.

“(10) Final decisions against the closed bank

“The execution and enforcement of a final decision of a court other than the
liquidation court against the assets of a closed bank shall be stayed. The
prevailing parly shall file the final decision as a claim with the liquidation court and
settled in accordance with the Rules on Concurrence and Preference of Credits
under the Civil Code or other laws.

“(11) Docket and other court fees

 “Payment of docket and other court fees relating to all cases or actions filed by the
receiver with any judicial or quasi-judicial bodies shall be deferred until the
action is terminated with finality. Any such fees shall constitute as a first Hen on
any judgment in favor of the closed bank or in case of unfavorable judgment, such
fees shall be paid as liquidation costs and expenses during the distribution of the
assets of the closed bank.

“(12) All assets, records, and documents in the possession of the closed bank at
the time of its closure are presumed held by the bank in the concept of an
owner.

“(13) The exercise of authority, functions, and duties by the receiver under
this Act shall be presumed to have been performed in the regular course of
business.

“(14) Assets and documents of the closed bank shall retain their private nature
even if administered by the receiver. Matters relating to the exercise by the
receiver of the functions under this Act shall be subject to visitorial audit only by
the Commission on Audit.”

“NOTICE OF CLOSURE AND TAKEOVER ACTIVITIES:

“SEC. 14. (a)

1. Upon the designation of the Corporation as receiver of a closed bank,

2. it shall serve a notice of closure to the highest-ranking officer of the bank
present in the bank premises, or
3. in the absence of such officer, post the notice of closure in the bank premises
or on its main entrance.
4. The closure of the bank shall be deemed effective upon the service of the
notice of closure. Thereafter, the receiver shall takeover the bank and exercise
the powers of the receiver as provided in this Act.

“(b) The receiver shall have authority to use reasonable force, including the authority
to force open the premises of the bank, and exercise such acts necessary to take actual
physical possession and custody of the bank and all its assets, records, documents, and
take charge of its affairs upon the service of the notice of closure.

“(c) Directors, officers, employees or agents of a bank hold money and other assets of
the bank in trust or under administration or management by them for the bank in their
fiduciary capacity.

Upon service of the notice of closure to the bank, all directors, officers, employees or
agents of the closed bank shall have the duty to immediately account for, surrender
and turn over to the receiver, and provide information relative to, the assets, records,
and affairs of the closed bank in their possession, custody, administration or
management.

“(d) When the circumstances so warrant, the local government unit and law
enforcement agencies concerned shall, upon request, immediately provide assistance
to the receiver during the service of notice of closure and actual takeover operations to
ensure the orderly conduct thereof and the security and safety of the personnel of the
receiver and the employees of the closed bank.”

WINDING-UP:

1. “(q) The creditors shall have a period of six (6) months from the date of
publication of notice of the approval by the court of the final asset distribution
plan of the closed bank within which to claim payment of the principal
obligations and surplus dividends. During this six-month period, the receiver
shall hold as trustee the assets allocated in the final asset distribution plan for
said creditors.

“Failure by the creditor to comply with the documentary requirements within

the prescribed period and/or refusal to accept the asset as payment shall be
deemed as abandonment or waiver of his or her right to payment.

2. “(r) The individual stockholders of record or their duly-authorized

representative or the court-appointed stockholders’ representative shall have a
period of six (6) months from publication of notice of the approval by the
court of the final asset distribution plan of the closed bank within which to
claim the residual assets. During this six-month period, the receiver shall hold
as trustee the assets allocated in the final asset distribution plan for said
stockholders of record.

“Failure by the individual stockholders of record or their duly-authorized

representative or the court-appointed stockholders’ representative to comply
with the documentary requirements within the prescribed period and/or refusal
to accept the residual assets in kind shall be deemed as abandonment or waiver
of right to receive the residual assets.

3. “(s) After the lapse of the six-month period provided in paragraphs (q) and (r)
of this section, all assets which remain unclaimed by the creditors and/or
stockholders of record shall be turned over to the Bureau of Treasury.

“(t) The receiver shall continue to keep all the pertinent records of the closed
bank for a period of six (6) months from the date of publication of the
approval of the final asset distribution plan.

After the lapse of this period, the receiver is authorized to dispose of the same
in accordance with the rules and regulations to be prescribed by the receiver.”

“DIVIDEND DECLARATION

“SEC. 18. Consistent with the policy of the State to generate, preserve, maintain faith
and confidence in the country’s banking system, the Corporation shall build up and
maintain the DIF at the target level set by the PDIC Board of Directors. Such target
level shall be subject to periodic review and may be adjusted as necessary.
“The Corporation is exempt from Republic Act No. 7656; instead, the Corporation
shall remit dividends to the national government only if the target DIF level for the
applicable year has been reached. For purposes of computing the amount of dividends
to be declared and remitted to the national government, all assessment collections
shall not be considered as income. The dividend rate shall be at least fifty percent
(50%) of the income from other sources only.”

“PAYMENT OF INSURED DEPOSITS:

“SEC. 19. Whenever an insured bank shall have been closed by the Monetary Board
pursuant to Section 30 of Republic Act No. 7653, or upon expiration or revocation of
a bank’s corporate term, payment of the insured deposits on such closed bank shall be
made by the Corporation as soon as possible either:

(1) by cash or

(2) by making available to each depositor a transferred deposit in another

insured bank in an amount equal to insured deposit of such depositor:

Provided, however, That the Corporation, in its discretion, may require proof of
claims to be filed before paying the insured deposits, and that in any case where the
Corporation is not satisfied as to the validity of a claim for an insured deposit, it may
require final determination of a court of competent jurisdiction before paying such
claim: Provided, further, That failure to settle the claim, within six (6) months from
the date of filing of claim for insured deposit, where such failure was due to grave
abuse of discretion, gross negligence, bad faith, or malice, shall, upon conviction,
subject the directors, officers or employees of the Corporation responsible for the
delay, to imprisonment from six (6) months to one (1) year: Provided, furthermore,
That the period shall not apply if the validity of the claim requires the resolution of
issues of facts and or law by another office, body or agency including the case
mentioned in the first proviso or by the Corporation together with such other office,
body or agency.”

FINANCIAL ASSISTANCE:

(e) In the exercise of its authorities under Section 11 of this Act, the Corporation is
authorized to make loans to, or purchase the assets of, or assume liabilities of, or
make deposits in:

“(1) A bank in danger of closing, upon its acquisition by a qualified

investor; or

“(2) A qualified investor, upon its purchase of all assets and

assumption of all liabilities of a bank in danger of closing; or

“(3) A surviving or consolidated institution that has merged or

consolidated with a bank in danger of closing; upon such terms and
conditions as the Board of Directors may prescribe, when in the
opinion of the Board of Directors, such acquisition, purchase of assets,
assumption of liabilities, merger or consolidation, is essential to
 provide adequate banking service in the community or maintain
financial stability in the economy.

“The Corporation, prior to the exercise of the powers under this section, shall
determine that actual payoff and liquidation thereof will be more expensive than the
exercise of this power: Provided, That when the Monetary Board has determined that
there are systemic consequences of a probable failure or closure of an insured bank,
the Corporation may grant financial assistance to such insured bank in such amount as
may be necessary to prevent its failure or closure and/or restore the insured bank to
viable operations, under such terms and conditions as may be deemed necessary by
the Board of Directors, subject to concurrence by the Monetary Board and without
additional cost to the DIF.

AUTHORITY TO BORROW:

“SEC. 23. The Corporation is authorized to borrow from the Bangko Sentral ng
Pilipinas and the Bangko Sentral ng Pilipinas is authorized to lend to the Corporation
on such terms as may be agreed upon by the Corporation and the Bangko Sentral ng
Pilipinas, such funds as in the judgment of the Board of Directors of the Corporation
are from time to time required for insurance purposes and financial assistance
provided for in Section 22(e) of this Act: Provided, That any such loan as may be
granted by the Bangko Sentral ng Pilipinas shall be consistent with monetary policy:
Provided, further, That the rate of interest thereon shall be fixed by the Monetary
Board.

“When in the judgment of the Board of Directors the funds of the Corporation are not
sufficient to provide for an emergency or urgent need to attain the purposes of this
Act, the Corporation is likewise authorized to borrow money, obtain loans or arrange
credit lines or other credit accommodations from any bank: Provided, That such loan
shall be of short-term duration: Provided, further, That no prior Monetary Board
opinion shall be required for the Corporation and its counterparties on individual
drawdowns or borrowings within an approved borrowing program where prior
Monetary Board opinion has already been obtained, pursuant to Section 123 of
Republic Act No. 7653.”

PENALTY:

A. The penalty of imprisonment of not less than six (6) years but not more than
twelve (12) years or a fine of not less than Fifty thousand pesos (P50,000.00)
but not more than Ten million pesos (P10,000,000.00), or both, at the
discretion of the court, shall be imposed upon:

“(1) Any director, officer, employee or agent of a bank for:

“(a) Any willful refusal to submit reports as required by law, rules and
regulations;

“(b) Any unjustified refusal to permit examination and audit of the

deposit records or the affairs of the institution;
“(c) Any willful making of a false statement or entry in any bank
report or document required by the Corporation;

“(d) Submission of false material information in connection with or in

relation to any financial assistance of the Corporation extended to the
bank;

“(e) Splitting of deposits or creation of fictitious or fraudulent loans or

deposit accounts.

“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 (2) 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 one
hundred twenty (120) days immediately preceding or during a bank-
declared bank holiday, or immediately preceding a closure order issued
by the Monetary Board of the Bangko Sentral ng Pilipinas for the
purpose of availing of the maximum deposit insurance coverage;

“(f) Refusal to receive the notice of closure as provided under Section

14 of this Act;

“(g) Refusal to allow the Corporation to take over a closed bank or

obstructing such action of the Corporation;

“(h) Refusal to turn over or destroying or tampering bank records;

“(i) Fraudulent disposal, transfer or concealment of any asset, property

or liability of the closed bank;

“(j) Violation of, or causing any person to violate, the exemption from
garnishment, levy, attachment or execution provided under this Act
and the New Central Bank Act;

“(k) Any willful failure or refusal to comply with, or violation of any

provision of this Act, or commission of any other irregularities, and/or
conducting business in an unsafe or unsound manner as may be
determined by the Board of Directors in relation to Section 56 of
Republic Act No. 8791, or ‘The General Banking Law of 2000’.

“Notwithstanding any law to the contrary, the foregoing acts of

directors, officers, employees or agents of the bank shall be considered
as additional grounds for disqualification under the fit and proper rules
of the Bangko Sentral ng Pilipinas.

“(1) Other acts inimical to the interest of the bank or the Corporation,
such as, but not limited to, conflict of interest, disloyalty, authorizing
related party transactions with terms detrimental to the bank and its
 stakeholders, and unauthorized disclosure of confidential information,
as may be determined by the Corporation.

“(2) Any person for:

“(a) Refusal to disclose information, records or data pertaining to the

bank accounts of a closed bank to the receiver;

“(b) Refusal to turn over possession or custody of the asset and record
of the closed bank to the receiver, notwithstanding any agreement to
the contrary;

“(c) Refusal or delaying the:

“(i) Verification of authenticity of the ownership documents;

“(ii) Registration of interest of the closed bank on a specific

property;

“(iii) Consolidation of ownership over an asset of the closed

bank;

“(iv) Act of securing certified true copies of documents in

relation to an asset of the closed bank;

“(v) Act of securing the appropriate certification from the

agencies or entities stated in Section 16 of this Act in relation to
an asset of the closed bank;

“(vi) Conduct of a physical or ocular inspection of the

properties owned by, or mortgaged to, the closed bank, to
determine their existence and present condition; or

“(vii) Other related activities of the receiver; or

“(d) Allowing the withdrawal from deposits or disposition of any asset

of the closed bank other than by the receiver;

“(e) Willfully violating any provision of this Act;

“(f) Conspiring or willfully participating in any of the offenses

enumerated in Paragraph 1 of this section;

“(3) Any law enforcement officer or local government official who refuses or
fails to assist the receiver in the service of the notice of closure, as provided
under Section 14 of this Act.”

B. “(h) The penalty of imprisonment of not less than ten (10) years but not
more than twelve (12) years, or a fine of not less than Five hundred
thousand pesos (P500,000.00) but not more than Ten million pesos (P
 10,000,000.00), or both, at the discretion of the court, shall be imposed
upon:

“(1) Any depositor who files a fictitious and/or fraudulent claim for deposit
insurance; and
“(2) Any bank officer who certifies to the validity of the deposit liabilities
which is subsequently verified to be fictitious and/or fraudulent.

C. “(i) The penalty of imprisonment of not less than twelve (12) years but not
more than fourteen (14) years shall be imposed upon any person who
participates, or attempts to participate, in a scheme to defraud a bank.

“If the offense shall have been committed by a director or officer of the bank,
the penalty of imprisonment of not less than fifteen (15) years, but not more
than seventeen (17) years shall be imposed.

“If the offense shall have resulted in systemic consequences, as determined by

the Bangko Sentral ng Pilipinas, the penalty of imprisonment of not less than
eighteen (18) years but not more than twenty (20) years shall be imposed.”