Secrecy of Bank Deposits (RA 1405)

Question 1

What is the purpose of RA 1405?

Answer 1

To discourage private hoarding and at the same time encourage the people to deposit their money in banking institutions, so that it ay be utilized by way of authorized loans and thereby assist in economic development.

Question 2

What are the prohibited acts for banks (any official or employee or independent auditor of a bank) in RA 1405?

Answer 2

Disclose to any person other than bank director, official or employee authorized by the bank, any information concerning deposits.

Question 3

What are the prohibited acts for any person, including the government in RA 1405?

Answer 3

To inquire, examine or look into bank deposits or bonds issued by the government.

Question 4

What kind of deposits are covered?

Answer 4

1. All deposits of whatever nature with banks or banking institutions in the Philippines, including Trust Accounts.
2. Investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities.

Question 5

Exceptions in RA 1405

Answer 5

1. Written Permission - depositor or investor
2. Impeachment Cases
3. Order of a competent court in cases of:
   * bribery or derelicition of duty of public officials
   *money deposited or invested is the subject of litigation
   *involving Unexplained wealth
4. Inquiry of Commissioner of BIR – determining the net estate of a deceased depositor
5. AMLC - order of competent court or in proper case by the AMLC –there is probable cause of money laundering and inc some instances w/o court order.
6. Reports:
   *Unclaimed balances - disclosure to the Treasurer of the Philippines
   *report of banks to AMLC of covered and/or suspicious transactions
7. Ombudsman issues subpoena
8. Upon order of Court of Appeals – Terrorism cases
9. Examination is made:
   *BSP
   *PDIC
   *COA
   *PCGG
10. Examination is made by Independent Auditor

Question 6

What are the conditions that must concur for the power of the ombudsman to subpoena the deposit information of a government official to be exercised?

Answer 6

1. There must be a case pending before a court of competent jurisdiction
2. the account must be clearly identified
3. the inspection must be limited to the subject matter of the pending case
4. the bank personnel and the account holder must be notified to be present during the inspection

Question 7

What are the exceptions for Foreign Currency Deposits (Foreign Currency Deposit Act)?

Answer 7

1. Written consent of depositor
2. Under section 11 of Anti-money laundering act
3. Under section 27 and 28 of the Human Security Act (existence of probable cause in anti-terrorism cases and those involving persons charged with or suspected of the crime of terrorism or conspiracy to commit terrorism….)
4. Examination by the BSP, PDIC, PCGG, and COA

Question 8

Is there a violation of the bank secrecy law in garnishment?

Answer 8

There is no violation of the bank secrecy law since the amount of the deposit is not actually disclosed.

Question 9

What kind of deposits are exempted from garnishment?

Answer 9

1. Foreign currency deposits
2. those exempt under the rules of court