Bank Secrecy Law

Bank Secrecy Law:
Objective:
1. It hopes to discourage private hoarding; and
2. Encourage the people to deposit their money in banking institutions so that it
may be utilized by way of unauthorized loans, and thereby assist in economic
development.
Covered by bank secrecy law:
All deposits of whatever nature with banks or banking institutions in the Philippines
including investments in bonds issued by the Government of the Philippines, its political
subdivisions and its instrumentalities, are hereby considered as of an absolutely
confidential nature and may not be examined, inquired or looked into by any person,
government official, bureau or office, except upon written permission of the depositor,
or in cases of impeachment, or upon order of a competent court in cases of bribery or
dereliction of duty of public officials, or in cases where the money deposited or invested
is the subject matter of the litigation. (Sec. 2, RA 1045)
Q: Are safety deposit boxes included in the word all deposits?
A: Yes!
Q: Are time deposits part of all deposits?
A: Absolutely.
Q: What about trust accounts?
A: Yes xxx the term deposits used in RA 1405 is to be understood broadly and not
limited to accounts which give rise to a creditor-debtor relationship between the
depositor and the bank.
Q: What is the meaning of investment in bonds? Does it include T-Bills?
A; Yes!
The term whatever nature applies not only to money which are deposited but also to
those which are invested.
Q: Sally Go was charged with qualified theft because she allegedly stole checks. The
prosecution issued a subpoena against the managers of Security, and Metro Bank,
inquiring the contents of of Sally Go’s account. Can the prosecution do that?
A: No. Section 2 of the Bank Secrecy Law expressly states that all deposits of whatever
nature is absolutely confidential. Here, the prosecution is inquiring into Sally Go’s bank
account.
it can hardly be inferred from the indictment itself that the Security Bank account is the
ostensible subject of the prosecution’s inquiry. Without needlessly expanding the scope
of what is plainly alleged in the Information, the subject matter of the action in this case
is the money amounting to ₱1,534,135.50 alleged to have been stolen by respondent, and
not the money equivalent of the checks which are sought to be admitted in evidence.
Thus, it is that, which the prosecution is bound to prove with its evidence, and no other.
(BSB vs. Sally Go)
What are the exceptions?
1. Written permission
2. Impeachment
3. In cases of direct bribery*
4. Dereliction of duty*
5. The money deposited is the subject matter of litigation
* upon a court order. Kung wala, bawal.
Q: Are these exceptions exclusive?
A: no. The law has expanded the exceptions.
Q: What are those exceptions.
On March 21, 1990, a check (Check No. 11669677) dated March 31, 1990 in the amount
of One Million Pesos (P1,000,000.00) was drawn against Account No. 0111-01854-8
with private respondent Allied Bank payable to the order of one Jose Ch. Alvarez. The
payee deposited the check with petitioner Union Bank who credited the P1,000,000.00
to the account of Mr. Alvarez. On May 21, 1990, petitioner sent the check for clearing
through the Philippine Clearing House Corporation (PCHC). When the check was
presented for payment, a clearing discrepancy was committed by Union Bank's clearing
staff when the amount of One Million Pesos (P1,000,000.00) was erroneously "under-
encoded" to One Thousand Pesos (P1,000.00) only.
Petitioner only discovered the under-encoding almost a year later. Thus, on May 7, 1991,
Union Bank notified Allied Bank of the discrepancy by way of a charge slip for Nine
Hundred Ninety-Nine Thousand Pesos (P999,000.00) for automatic debiting against of
Allied Bank. The latter, however, refused to accept the charge slip "since [the]
transaction was completed per your [Union Bank's] original instruction and client's
account is now insufficiently funded." So plaintiff made a complaint ordering allied
bank to pay 999,000.00
Yes. Petitioner points to its prayer in its complaint to show that it sought reimbursement
from the drawer's account. The prayer, however, does not specifically state that it was
seeking recovery of the amount from the depositor's account. Petitioner merely asked
that "judgment be rendered in favor of plaintiff against defendant sentencing it to pay
plaintiff: 1. The sum of NINE HUNDRED NINETY-NINE THOUSAND PESOS
(P999,000.00)
In short, petitioner is fishing for information so it can determine the culpability of
private respondent and the amount of damages it can recover from the latter. It does not
seek recovery of the very money contained in the deposit. The subject matter of the
dispute may be the amount of P999,000.00 that petitioner seeks from private
respondent as a result of the latter's alleged failure to inform the former of the
discrepancy; but it is not the P999,000.00 deposited in the drawer's account. By the
terms of R.A. No. 1405, the "money deposited" itself should be the subject matter of the
litigation.

Bank Secrecy Law

Uploaded by

Copyright:

Available Formats

Bank Secrecy Law

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Bank Secrecy Law

Uploaded by

Copyright:

Available Formats

Bank Secrecy Law:

You might also like