New law allows closed bank depositors quicker access to insured deposits - See more at:

Depositors of closed banks may now have quicker access to their insured deposits.

Under Republic Act No. 10846, the law that recently amended the Charter of the Philippine Deposit Insurance Corporation (PDIC), payment of deposit insurance may now also be based on depositors' records found to be authentic by PDIC and not just solely on the basis of records maintained by the closed bank.

This addresses the inconvenience caused to depositors by the absence of deposit records of closed banks or by irregularities in the recording, documentation and deposit record keeping of a closed bank. Depositors' evidence of deposits and records include savings passbooks, certificates of deposit, ATM cards, transaction receipts, check books and other bank records.

PDIC President Cristina Que Orbeta underscored the need for depositors to always secure their deposit records and keep depositors' information updated with their banks.

The PDIC reported that there had been several instances when the records of closed banks were found to be in a state of disarray upon PDIC's takeover. In situations like these, payout operations encountered delays due to the need to examine carefully deposit records of the bank causing undue inconvenience to depositors.

R.A. 10846 also allows gross settlement of deposit insurance claims, except in instances when depositors have past due loans and when their deposits are under hold-out agreements with the bank. This means that loans that are current will no longer be deducted from the amount of deposit insurance that will be paid by PDIC to the depositors of closed banks, enabling the borrowers to benefit from the payment period agreed with the bank.

This will expedite the payment of deposit insurance claims and quicker access to their trapped funds. Borrowers are, however, reminded of their responsibility to continue to pay their loans. PDIC, as Liquidator, will continue to collect loans owed to the bank.

The new law empowers PDIC to further strengthen depositor protection, minimize disruption in the financial system in times of bank closures, promote financial inclusion through continued access to banking services, strengthen PDIC as an organization; and ensure that PDIC policies are aligned with international best practices. (PDIC)

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Source: The Philippine Information Agency