Philippine Deposit Insurance Corporation Overview
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Questions and Answers

Which type of account is excluded from PDIC deposit insurance?

  • Fictitious deposit accounts (correct)
  • Savings accounts in rural banks
  • Mortgage loans
  • Foreign currency deposits

    • What is the mandatory requirement regarding banks and PDIC membership?

  • All operating banks are mandatory members of PDIC. (correct)
  • Only rural banks are required to be members of PDIC.
  • All banks must apply for PDIC membership annually.
  • Banks can choose to opt out of PDIC membership.

    • Which of the following types of deposits may be insured by PDIC with additional approvals?

  • Deposits in banks that fail
  • Deposits in foreign branches of Philippine banks (correct)
  • Deposits in investment accounts
  • Deposits in offshore accounts

    • Which of the following is true regarding the coverage of foreign currency deposits by PDIC?

    <p>Foreign currency deposits are insured under RA 6426.</p> Signup and view all the answers

    Which transaction type is insured by PDIC?

    <p>Deposit accounts in cooperative banks</p> Signup and view all the answers

    What is the condition under which PDIC may insure deposits in branches of foreign banks?

    <p>If the foreign bank is licensed by Bangko Sentral ng Pilipinas.</p> Signup and view all the answers

    Under the Anti-Money Laundering Law, which type of deposits will PDIC not insure?

    <p>Deposits determined to be proceeds of unlawful activities</p> Signup and view all the answers

    What types of banks are included under PDIC deposit insurance coverage?

    <p>Private development banks and savings and loan associations</p> Signup and view all the answers

    What year was the Philippine Deposit Insurance Corporation (PDIC) established?

    <p>1963</p> Signup and view all the answers

    What is the maximum deposit insurance coverage provided by PDIC effective June 1, 2009?

    <p>P500,000</p> Signup and view all the answers

    Which of the following is NOT a function of PDIC?

    <p>Issuer of Bank Loans</p> Signup and view all the answers

    What significant power was granted to PDIC under the amendments in RA 10846?

    <p>Hastening the liquidation process for closed banks</p> Signup and view all the answers

    What is one of the primary mandates of PDIC?

    <p>To provide depositors access to funds during bank closures</p> Signup and view all the answers

    Which statement accurately describes an 'insured deposit' according to PDIC?

    <p>It refers to the amount due to a bona fide depositor not exceeding P500,000.</p> Signup and view all the answers

    What does R.A. No. 9576 allow PDIC to do concerning the maximum deposit insurance coverage?

    <p>Adjust the coverage subject to presidential approval</p> Signup and view all the answers

    Who exercises complementary supervision of banks alongside PDIC?

    <p>Central Bank of the Philippines</p> Signup and view all the answers

    Study Notes

    Philippine Deposit Insurance Corporation (PDIC)

    • Established by Republic Act 3591 in 1963 to insure bank deposits
    • Amended by Republic Act 10846 in 2016, strengthening its powers to protect depositors and promote financial stability
    • Attached agency of the Department of Finance
    • Mandate is to provide deposit insurance, promote public trust, and ensure banking stability
    • Functions include deposit insurance, co-regulation of banks, and receivership/liquidation of closed banks

    Maximum Deposit Insurance Coverage

    • P500,000 per depositor per insured bank, regardless of the different accounts held in the same bank
    • Maximum deposit insurance coverage (MDIC) may be adjusted by the PDIC, subject to Presidential approval, if the stability of the banking system is threatened
    • Joint accounts are insured separately
    • Investment products, unfunded deposits, fictitious deposits, fraudulent deposits, proceeds of unlawful activities, and products from unsafe/unsound banking practices are not insured

    Insured Deposits

    • Insured deposit is the amount owed to a depositor minus any obligations to the insured bank, up to a maximum of P500,000, at the time of bank closure
    • Foreign currency deposits are insured, and payment is made in the same currency
    • Types of insured deposits include those held in commercial banks, savings/mortgage banks, rural banks, private development banks, cooperative banks, savings and loan associations, and foreign bank branches/agencies, all authorized in the Philippines to perform banking functions
    • Philippine banks with branches abroad may choose to insure those deposits with PDIC approval

    Exclusions from Insurance

    • Investment products (bonds, securities, trust accounts)
    • Unfunded, fictitious, or fraudulent deposits
    • Deposits resulting from unsafe/unsound banking practices
    • Proceeds from unlawful activities

    PDIC Membership

    • Membership is mandatory for all operating banks in the Philippines

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    Description

    This quiz covers the establishment, functions, and maximum deposit insurance coverage of the Philippine Deposit Insurance Corporation (PDIC). It delves into the key amendments and the importance of ensuring banking stability and protecting depositors. Test your knowledge on how the PDIC promotes public trust in the banking system.

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