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The main purpose of the Secrecy of Bank Deposits Law is to encourage individuals to hoard their money rather than deposit it in banks.
The main purpose of the Secrecy of Bank Deposits Law is to encourage individuals to hoard their money rather than deposit it in banks.
False
Any person, including government officials, is allowed to examine bank deposits without any restrictions.
Any person, including government officials, is allowed to examine bank deposits without any restrictions.
False
Trust accounts are included under the deposits covered by the Secrecy of Bank Deposits Law.
Trust accounts are included under the deposits covered by the Secrecy of Bank Deposits Law.
True
A subpoena from the Ombudsman grants access to bank accounts without needing further justification.
A subpoena from the Ombudsman grants access to bank accounts without needing further justification.
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A depositor must give written permission for their bank deposits to be disclosed under any circumstances.
A depositor must give written permission for their bank deposits to be disclosed under any circumstances.
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The law allows for bank deposit examination in cases of bribery or dereliction of duty of public officials.
The law allows for bank deposit examination in cases of bribery or dereliction of duty of public officials.
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Investments in government bonds are exempt from the provisions of the Secrecy of Bank Deposits Law.
Investments in government bonds are exempt from the provisions of the Secrecy of Bank Deposits Law.
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The AMLC can investigate bank accounts based on probable cause of money laundering without a court order.
The AMLC can investigate bank accounts based on probable cause of money laundering without a court order.
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PDIC is liable for all insured deposits once a bank is closed.
PDIC is liable for all insured deposits once a bank is closed.
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The period for PDIC to settle a claim is 12 months from the filing date.
The period for PDIC to settle a claim is 12 months from the filing date.
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Depositors retain claims for any portion of their deposits that are uninsured, even after having their insured deposits paid.
Depositors retain claims for any portion of their deposits that are uninsured, even after having their insured deposits paid.
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PDIC's payment of insured deposits is treated as a preferred credit similar to taxes due to the National Government.
PDIC's payment of insured deposits is treated as a preferred credit similar to taxes due to the National Government.
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PDIC may withhold payment of insured deposits if a depositor has outstanding liabilities to the closed bank.
PDIC may withhold payment of insured deposits if a depositor has outstanding liabilities to the closed bank.
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Robbery committed in an uninhabited place cannot be classified as robbery under RPC.
Robbery committed in an uninhabited place cannot be classified as robbery under RPC.
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A depositor will receive cash payments exclusively as a mode of payment from PDIC.
A depositor will receive cash payments exclusively as a mode of payment from PDIC.
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After PDIC pays an insured deposit, it does not have any rights to recover dividends from a closed bank.
After PDIC pays an insured deposit, it does not have any rights to recover dividends from a closed bank.
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Qualified Theft under Article 310 only applies if the property stolen is a vehicle.
Qualified Theft under Article 310 only applies if the property stolen is a vehicle.
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The act of plunder is covered under RA 7080.
The act of plunder is covered under RA 7080.
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PDIC's involvement in liquidation proceedings grants it preference in payment distribution.
PDIC's involvement in liquidation proceedings grants it preference in payment distribution.
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Aiding and abetting pirates is not considered a crime under the RPC.
Aiding and abetting pirates is not considered a crime under the RPC.
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Failure to settle a claim for insured deposit within 6 months can lead to imprisonment from 6 months to one year for responsible personnel.
Failure to settle a claim for insured deposit within 6 months can lead to imprisonment from 6 months to one year for responsible personnel.
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The Truth in Lending Act aims to increase the rates of credit to protect the national economy.
The Truth in Lending Act aims to increase the rates of credit to protect the national economy.
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Swindling, or Estafa, is addressed under Article 315 of the RPC.
Swindling, or Estafa, is addressed under Article 315 of the RPC.
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Terrorism financing is addressed in Republic Act No. 10168.
Terrorism financing is addressed in Republic Act No. 10168.
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Under BSP Circular No. 755, the objective of transparent pricing is to limit the rates charged by credit providers.
Under BSP Circular No. 755, the objective of transparent pricing is to limit the rates charged by credit providers.
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The Electronic Commerce Act (RA 8792) does not include provisions for unlawful activities.
The Electronic Commerce Act (RA 8792) does not include provisions for unlawful activities.
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Any creditor must provide a written statement detailing the finance charge before the transaction is consummated.
Any creditor must provide a written statement detailing the finance charge before the transaction is consummated.
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Destructive arson is a crime under RPC but not linked to murder.
Destructive arson is a crime under RPC but not linked to murder.
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The cash price or delivered price of a good does not need to be disclosed by the creditor prior to the credit extension.
The cash price or delivered price of a good does not need to be disclosed by the creditor prior to the credit extension.
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Charges that are not incident to the extension of credit must be itemized for the consumer.
Charges that are not incident to the extension of credit must be itemized for the consumer.
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The total amount to be financed includes the down payment and any trade-in value.
The total amount to be financed includes the down payment and any trade-in value.
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Bad faith on the part of PDIC personnel can result in longer imprisonment than 1 year for handling insured deposit claims.
Bad faith on the part of PDIC personnel can result in longer imprisonment than 1 year for handling insured deposit claims.
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A transaction that deviates from the client's past profile can be deemed suspicious.
A transaction that deviates from the client's past profile can be deemed suspicious.
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The Anti-Money Laundering Council can issue orders to determine the identity of any monetary instrument involved in a covered transaction.
The Anti-Money Laundering Council can issue orders to determine the identity of any monetary instrument involved in a covered transaction.
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If a transaction is both covered and suspicious, it should only be reported as a covered transaction.
If a transaction is both covered and suspicious, it should only be reported as a covered transaction.
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The membership of the Anti-Money Laundering Council includes the Chairman of the National Bureau of Investigation.
The membership of the Anti-Money Laundering Council includes the Chairman of the National Bureau of Investigation.
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The AMLC can initiate investigations based on its own determination of suspicious transactions.
The AMLC can initiate investigations based on its own determination of suspicious transactions.
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Communicating the fact of a covered or suspicious transaction report is allowed under bank secrecy laws.
Communicating the fact of a covered or suspicious transaction report is allowed under bank secrecy laws.
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The AMLC is responsible for conducting civil forfeiture proceedings related to money laundering.
The AMLC is responsible for conducting civil forfeiture proceedings related to money laundering.
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The functions of the AMLC do not include requiring covered transaction reports from institutions.
The functions of the AMLC do not include requiring covered transaction reports from institutions.
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A jewelry dealer is considered a covered institution if their trading volume exceeds P5,000,000.
A jewelry dealer is considered a covered institution if their trading volume exceeds P5,000,000.
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A covered person is obligated to keep records for a duration of 6 years.
A covered person is obligated to keep records for a duration of 6 years.
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The AMLC requires covered and suspicious transactions to be reported within 5 working days.
The AMLC requires covered and suspicious transactions to be reported within 5 working days.
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Legal professionals are required to report covered transactions regardless of professional secrecy.
Legal professionals are required to report covered transactions regardless of professional secrecy.
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A suspicious transaction can simultaneously be classified as a covered transaction.
A suspicious transaction can simultaneously be classified as a covered transaction.
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The jurisdiction for money laundering cases is entirely under the supervision of the Court of Tax Appeals.
The jurisdiction for money laundering cases is entirely under the supervision of the Court of Tax Appeals.
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AMLC can assign a reporting period longer than 10 working days for suspicious transactions.
AMLC can assign a reporting period longer than 10 working days for suspicious transactions.
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A jewelry dealer trading less than P10,000,000 is defined as a covered institution.
A jewelry dealer trading less than P10,000,000 is defined as a covered institution.
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Study Notes
Banking Laws - Secrecy of Bank Deposits (RA 1405)
- Purpose: Discourage private hoarding, encourage public deposits for economic development.
- Prohibited Acts: Banks and individuals cannot disclose deposit information except to authorized personnel or with a depositor's written permission.
- Covered Deposits: All deposits (including trust accounts) and government bonds.
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Exceptions:
- Depositor written consent
- Impeachment cases
- Court orders (bribery, dereliction of duty, litigation, unexplained wealth, money laundering).
- BIR inquiry for estate value
- Ombudsman inquiries (with specific conditions)
- Law enforcement officers (terrorism cases, Human Security Act of 2007).
- Special/general bank examinations (with Monetary Board authorization)
- PDIC inquiry (unsafe/unsound banking practices).
- COA examination/audit (government deposits)
- PCGG investigation (ill-gotten wealth)
- Bank's independent audit (for audit purposes only)
- Exceptions - Foreign Currency Deposits: Absolutely confidential, except with written consent or under specific cases involving probable cause for money laundering related activities or terrorism.
- Garnishment: Permitted without violating bank secrecy, as the amount is not revealed.
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Deposits Exempt from Garnishment:
- Foreign currency deposits (except for transient foreigners)
- Those exempt under Rules of Court
Banking Laws - PDIC Act (RA 3591)
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Functions: Deposit insurer, bank regulator, receiver/liquidator of closed banks.
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Insured Deposits: Amount due to depositors in an insured bank (up to PHP 500,000).
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Maximum Deposit Insurance Adjustment: Can be adjusted if banking system stability is threatened (Monetary Board approval, unanimous vote of PDIC, presidential approval).
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Coverage: Insures deposit liabilities of banks receiving deposits.
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Exclusions:
- Deposit splitting
- Foreign bank head office deposits in Philippine branches
- Proceeds of illegal activities
- Unfunded/fictitious deposits
- Deposits involving unsafe/unsound practices
- Investment products (bonds, securities, trusts)
- Unfunded/fictitious transactions.
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Determination of Amount:
- On a per-bank basis, not exceeding PHP500,000 per bank.
- Per depositor, all accounts held in the same capacity are added.
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Accounts with "By", "In Trust For", or "For the Account of":
- "By" account - the named person is the depositor.
- "In Trust For" and "For the Account of" - the named person is the depositor.
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Joint Accounts: Insured separately from individual accounts; If held by multiple natural persons, the coverage is divided equally; if held by a juridical person with natural persons, the coverage is deemed to belong entirely to the juridical person.
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Procedure for the PDIC: • Commences determination of insured deposits after takeover. • Notifies depositors using appropriate means. • Publishes notices in newspapers.
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Certificate of Deposit: Only registered holders are considered depositors.
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Claim Filing Period: Two years from takeover and two more years from filing date.
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Proof of Claim: Required; court final determination in disputed cases required before payment.
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Non-filing/Non-enforcement: Barred rights against PDIC and closed bank.
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Modes of Payment: Cash, or transferred deposit to another insured bank.
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Payment Effects: PDIC assumes depositor's rights against the closed bank (dividends, etc.).
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Preference: Considered a preferred credit.
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Claim Settlement Period: 6 months from filing (exemptions exist for specific circumstances).
Banking Laws - Other
- Anti-Money Laundering Act (RA 9160)
- Unlawful Activities: Specific criminal acts (kidnapping, drug trafficking, corruption, etc.)
- Money Laundering: Crime involving proceeds from unlawful activity.
- Stages of Money Laundering: Placement, layering, integration.
- Covered Entities: Banks, institutions regulated by BSP, insurance companies, securities dealers, etc.
- Required Information: Disclosure of finance charges, interest computations, etc. Transparency requirements.
- Penalties: Fines and imprisonment for violations.
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Description
This quiz covers the key aspects of the Banking Laws pertaining to the secrecy of bank deposits as outlined in RA 1405. It examines the purposes, prohibited acts, covered deposits, and the exceptions under which disclosure is allowed. Test your knowledge about the regulations that discourage private hoarding and promote economic development.
