PDIC: Role and Functions

Study Notes

Concept of Insured Depositors

Insured depositors are entitled to a net amount for deposits in an insured bank, not exceeding PhP 500,000.
Coverage applies to multiple accounts held by a depositor at the same bank, calculated on the total of those accounts.
Calculations for amounts due include all deposits maintained under the same name or authorized by the depositor, even if the account is in someone else's name.
Account transfers, such as those for individuals abroad, are included in coverage calculations.

Philippine Deposit Insurance Corporation (PDIC)

Established under Republic Act No. 3591, and amended by RA 9576 in 2009, the PDIC is a government-owned corporation.
Purpose involves creating a government entity to ensure deposit liabilities of banks up to PhP 500,000 for each depositor, regardless of account number.
Aims to safeguard public interest by providing ongoing deposit insurance coverage.

Current Coverage and Regulations

Maximum deposit insurance coverage is currently set at PhP 500,000 per depositor, per bank.
Reclassified under Bangko Sentral ng Pilipinas (BSP) instead of the Department of Finance for enhanced regulatory efficiency.

Insurance for Islamic Banking

PDIC is mandated to provide insurance for Islamic banking products recognized as deposits by the BSP.
A separate deposit insurance fund or takaful may be established for these distinct deposit products.

Asset Management and Functions

PDIC has the authority to sell closed bank assets to Financial Institution Strategic Transfer Corporations (FISTCs).
FISTCs specifically acquire non-performing assets, such as loans and real estate, from financial institutions.
These assets constitute a significant part of the PDIC's holdings as the liquidator for closed banks.

Role and Mandates of PDIC

PDIC's core responsibilities include offering deposit insurance and handling the liquidation process of closed banks.
Operates as an attached agency of the BSP to enhance financial stability.
Committed to upholding governance and social responsibility while promoting financial literacy among Filipinos.
The nature of PDIC’s functions includes compulsory insurance applicable to all bank deposits.

Description

Test your knowledge about the Philippine Deposit Insurance Corporation (PDIC), its role in protecting depositors, and its functions in promoting financial stability. Learn about deposit insurance and liquidation of closed banks.