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Regulatory Framework for Business Transactions > Banking Laws > Flashcards

Banking Laws Flashcards

1
Q

RA 1405

A

Bank Secrecy Law

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2
Q

Purpose of Bank Secrecty Law

A

Discourage private hoarding and at the same time encourage the people to deposit their money in banking institutions so that it may be utilized by way of authorized loan and thereby assist in economic development.

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3
Q

Prohibited Acts in Bank Secrecy Law

A
  1. For banks to disclose any person other than a bank director official or employee authorized by the bank any information regarding deposits
  2. Any person including government to inquire, examine or look into bank deposits or bond issued by the government
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4
Q

Deposits covered in Bank Secrecy Law

A
  1. All deposits of whatever nature with banks or banking institutions in the Philippines including Trust Accounts.
  2. Investment in bonds issued by the Government of the Philippines
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5
Q

Exceptions to Peso Deposits

A
  1. Written Permission of depositor or investor
  2. Impeachment cases of President, VP, Supreme court members, member of Constitutional Commissioners and the Ombudsman related to Peso Deposits only
  3. Order of Competent court in cases of:
    a. Bribery
    b. When money deposited is subject of litigation
    c. Involving unexplained wealth under RA 3019
  4. Upon inquiry by the Commissioner of BIR
  5. Cases regarding AMLC
  6. Reports : a) Disclosure to Treasurer of Ph for unclaimed balances & b) Report of banks for AMLC of suspicious transactions
  7. Ombudsman has power to issues subpoena to examine and access bank account and records.
  8. Terrorism Cases
  9. Examination is made: 1. Authorized by Monetary Board 2. PDIC 3. COA & 4. PCCG
  10. Examination made by an independent auditor hired by bank for the exclusive use of the bank
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6
Q

When can Foreign Currency Deposits be examined?

A
  1. Written consent of the depositor
  2. Relation to AMLA (Anti Money Laundering Act) that is related to unlawful activity as defined in AMLA
  3. Probable cause in anti-terrorism cases and the involving persons suspected of the crime of terrorism
  4. Examination by BSP, PDIC, PCGG, AND COA
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7
Q

Penalties for Violation of Bank Secrecy Law

A

Peso Deposit: Imprisonment: Not to exceed 5 years & Fine: Not to exceed 20,000 or BOTH
Foreign Currency Deposit: Imprisonment 1 to 5 years & Fine: 5,000 to 25,000 or BOTH

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8
Q

What is the purpose of PDIC

A

Insure the deposits of all banks which are entitled to the benefits of insurance

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9
Q

Insured Deposit Limit

A

Will not exceed 500,000

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10
Q

Deposits not Entitled to payment

A
  1. Deposit products that resulted from splitting of deposit (120 days preceding bank closure)
  2. Deposit products by the head office of a foreign bank in its branch
  3. Deposits are determined to be proceeds of unlawful activity
  4. Deposits payable in a place outside the Philippines
  5. Deposits which are unfunded and are fictitious or fraudulent
  6. Deposits emanating from unsafe and unsound banking practices
  7. Investment Products
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11
Q

Determination of Amount Due

A
  1. Per Bank- entitled to 500,000 each banks
  2. Per Depositor, Per Capacity- All deposits in the bank maintained in the same right and capacity for his benefit either in his own name or in the name of others shall bee added to together in determining insured amount
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12
Q

Rules as to Joint Account

A
  1. If held jointly by two or more persons, divided as many equal shares as there are individuals
  2. 500,000 entitlement to joint deposits is separate from the 500,000 applicable to individually owned accounts
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13
Q

Claim- Period to File and Enforce

A
  1. Period to file- within 2 years from actual takeover of the closed bank by receiver
  2. Period to enforce- within 2 years after the 2year period to file claim
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14
Q

Settlement of Claim

A

Period to settle a claim: 6 months from the date of filing of claim

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15
Q

What is Money Laundering

A

A crime committed by any person knowing that any monetary instrument or property represents, involves the proceeds of unlawful activities:
1. Transacts or attempts to transact on said monetary instrument
2. Converts, transfers, disposes, moves, acquires, possesses or use said monetary instrument
3. Conceals or disguises the true nature, source, location, disposition, movement, or ownership of or rights with respect to said monetary instrument
4. Attempts or conspires to commit money laundering
5. Aids or counsels the commission of the money laundering offences
6. Performs or fails to perform any act as a result of which he facilitates the offence
7. Failure to report to the Anti-Money Laundering Council by any covered person knowing that a suspicious transactions is required under AMLA to be reported

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16
Q

Stages of Money Laundering

A
  1. Placement- Placing money into a legitimate financial institution
  2. Layering- Involves sending money through various financial transactions to change its form and make it more difficult to follow
  3. Integration- Money re-enters the mainstream economy in legitimate-looking form, appearing to have come from legitimate transaction
17
Q

Covered Entities

A
  1. Banks and subsidiaries and affiliates supervised and/or regulated by the BSP
  2. Other entities supervised and/or regulated by the SEC
  3. Companies and entities supervised and/or regulated by the Insurance Commission
  4. Securities dealers, brokers, salesmen, associated persons of brokers or dealers, investment houses, investment agents and consultants, trading advisors
  5. Mutual funds or open-end investment companies or issuers and other similar entities
  6. Jewelry dealers in precious metal or stones (transactions greater than 1 Million)
  7. Land Registration Authority and all of its registers of deeds on all real estate transactions with price exceed 500,000
  8. Foreign Exhange Corporations, money changers, money payment, remittance and transfer companies
  9. Casinos
  10. Real Estate Developers and Brokers
  11. Offshore Gaming operations and their service providors
18
Q

Reportorial Requirement

A
  1. Covered Transactions: Within 5 working days from occurrence thereof: 500,000 within one banking day
    -Casinos 5,000,000
    - Real Estate Developers: 7,500,000
  2. Suspicious Transactions, within the next working day from occurrence
19
Q

Composition of Anti-Money Laundering Council

A

1 Chairman: BSP Governor
2 Members: Commissioner of Insurance Commission & Chairman of SEC

20
Q

Declaration of Policy of Truth in Lending Act

A

Protect its citizens from lack of awareness of the true cost of credit to the user by assuring a full disclosure of such cost with a view of preventing the uninformed use of credit to the detriment of the national economy

21
Q

Required Information that creditor will furnish to each person to whom credit is extended

A
  1. Cash Price or delivered price of the property
  2. Down payment and/or trade in amounts
  3. Difference set forth between amounts set in 1&2
  4. Additional charges in connection with the transaction
  5. Total amount to be financed
  6. Finance Charge
  7. Percentage that the finance charge bears to the total amount
22
Q

Additional Disclosures for Truth in Lending Act
1. Total Amount Financed
2. Finance Charge
3. Net Proceeds
4. Percentage that the finance charge bears to the total amount to be financed

A

Penalties in relation to Truth in Lending Act
1. Fails to disclose to any person any information in violation of this act:
I. in the amount of 100 or
II. Amount equal to twice the financed charged required by such creditor in connection with such transaction up to the amount of 2,000
2. Willfully violates any provision of this act or any regulation
I. Fine of not less than 1,000 or more than 5,000
II. Imprisonment of not less than 6 months not more than one year or both

Regulatory Framework for Business Transactions (22 decks)

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