Revised Rules and Regulations on Assessment of Member Banks

2010

PDIC REGULATORY ISSUANCE NO. 01-10

 

Pursuant to Sections 2 and 6 of Republic Act (RA) No. 3591 as amended by RA 9576, the Board of Directors of the Philippine Deposit Insurance Corporation (PDIC), by virtue of Resolution No. 2010-11-150 dated November 10, 2010, approved the following Revised Rules and Regulations on Assessment of Member Banks.

SECTION 1. Policy Consideration. —

To provide permanent and continuing insurance coverage on all insured deposits, and enable PDIC to perform its functions under the law, member banks shall pay semi-annual assessment to PDIC in accordance with these Revised Rules and Regulations on Assessment of Member Banks ("Revised Rules and Regulations on Assessments").

SECTION 2. Coverage. —

The Revised Rules and Regulations on Assessments shall govern PDIC's assessment of member banks, pertaining to the following:

1. Determination of the assessment base and the amount of assessment;

2. Filing of certified statements of deposits and remittance of the assessment;

3. Actions against non-compliance with rules on filing of certified statement and/or payment of assessment by a member bank;

4. Conduct of onsite assessment audit; and

5. Rules on contested assessments and excess assessment payment.

SECTION 3. Determination of the Assessment Base. —

SECTION 3.1. Assessment Base. —

The assessment base shall be the total amount of liability of the bank for deposits as defined under Section 4 (f) of the R.A. 3591, as amended (PDIC Charter), without any deduction for indebtedness of depositors.

The following assessment items shall form part of the assessment base:

i. Deposits in the following peso and foreign currency accounts maintained in domestic branches:

a. Demand, "NOW", Savings, Time, Non-Negotiable Certificates of Time Deposits (CTDs), Negotiable CTDs and Special Savings Accounts; aCcADT

b. Accrued Interest Payable on accounts in Section 3.1 (i) (a)

c. Accounts other than those mentioned above, which fall under the definition of "deposit" under Section 4 (f) of RA 3591, as amended.

ii. Deposits in overseas branch/es of a bank incorporated under Philippine laws, which were duly approved by the PDIC Board of Directors for insurance coverage.

SECTION 3.2. Semi-Annual Assessment Base. —

i. Except for new member banks, i.e., banks that are newly-opened or banks that reopened as a result of rehabilitation, the semi-annual assessment base of member banks, shall be as follows:

a. For the semi-annual assessment due on July 31: The average amount of the total assessment items of a bank, as defined in Section 3.1 hereof, as of the close of business on the two quarterly assessment base days, which are the preceding March 31 and June 30;

b. For the semi-annual assessment due on January 31: The average amount of the total assessment items of a bank, as defined in Section 3.1 hereof, as of the close of business on the two quarterly assessment base days, which are the preceding September 30 and December 31.

ii. The semi-annual assessment base of a new member bank shall be the total assessment items of the bank as of the close of business either on June 30 or December 31, whichever date succeeds the date the bank opened or re-opened. Such shall include liabilities for deposits of another bank or banks, which the new member bank assumed, if any.

Provided, that, when any of said days is a non-business day or legal holiday, either national or local, the preceding business day shall be used as assessment base day.

SECTION 3.3. Conversion Rates for Foreign Currency Deposits. —

For purposes of assessment, the amount of deposits maintained in foreign currencies shall be converted to Philippines pesos as follows:

i. United States (US) dollar denominated deposits shall be converted to Philippine pesos using the Philippine Dealing System (PDS) closing rates as of assessment base day/s;

ii. Foreign currency deposits in denomination other than the US dollar shall first be converted to its equivalent amount in US dollar using the New York US dollar/third currency closing rates as of assessment base day/s, before converting the US dollar equivalent to pesos using PDS closing rates as of assessment base day/s.

Provided, that in the event the prescribed conversion rate for foreign exchange transactions is amended through regulation by the Bangko Sentral ng Pilipinas (BSP), the basis for converting foreign currency denominated deposits into pesos as of assessment base days shall be aligned with the conversion rates prescribed by the BSP.

SECTION 4. Determination of the Assessment. —

4.1 Assessment Rate

The assessment rate shall be one-fifth (1/5) of one per centum (1%) per annum.

4.2 Semi-Annual Assessment

Member banks shall pay semi-annual assessment on their deposit liabilities equal to one-half (1/2) of the assessment rate or effectively the factor of 0.001 multiplied by the semi-annual assessment base as determined under Section 3.2. In no case, however, shall the assessment be less than Five Thousand Pesos (P5,000).

SECTION 5. Filing of Certified Statements and Remittance of Assessment. —

5.1 Filing of Certified Statements

A new member bank shall not be required to file any certified statement or pay any assessment for the semi-annual period in which it becomes a member bank. The new member bank shall instead file its First Certified Statement (FCS) or PDIC Form 202 (Annex A) with PDIC on or before January 31 or July 31 of the following semi-annual period after it becomes a member bank, consistent with Section 3.2 (ii) of this Revised Rules and Regulations on Assessments. CAaEDH

All other member banks shall file with PDIC the Regular Certified Statements (RCS) or PDIC Form 201 (Annex B) on or before January 31 and July 31 of each year, consistent with Section 3.2 (i) of this Revised Rules and Regulations on Assessments. Provided, that, when any of said days is a non-business day or legal holiday, either national or local, the certified statements shall be filed on the preceding business day.

The FCS/RCS shall show the deposit liabilities of the member bank as of the close of business on reference base day/s, the computation of the semi-annual assessment base and the amount of the semi-annual assessment due to PDIC. The FCS/RCS shall be:

i. verified and signed under oath by the Bank President or any officer duly designated by the Board to sign financial reports;

ii. filed in quadruplicate copies; and

iii. accompanied by required supporting schedules (Annex C).

5.2 Payment of Semi-Annual Assessment

Simultaneous with the filing of the FCS/RCS, a member bank shall pay its semi-annual assessment through any of the following modes:

i. Direct settlement to PDIC;

ii. Via registered mail;

iii. LBP Online Collection facility;

iv. Real Time Gross Settlement; or

v. Any of PDIC's designated collecting agents.

The semi-annual assessment shall be paid to PDIC in cash, or by a Metro Manila or any regional clearing check, manager's/cashier's check (except out of town checks), demand draft, or Philippine postal money order or in other forms as may be prescribed by PDIC in accordance with its agreement with its designated collecting agents.

SECTION 6. Actions Against Non-Compliance with Rules on Filing of Certified Statement and/or Payment of Assessment by a Member Bank. —

6.1 First Demand and Imposition of Interest Charges

A demand letter shall be sent either by registered mail or personal service to a member bank that fails to file the certified statement and/or pay its corresponding semi-annual assessment or deficiency within the prescribed deadline. The demand letter shall direct the defaulting member bank to comply with the filing of the certified statements and/or pay the assessment or deficiency, together with the interest thereon, within thirty (30) calendar days from receipt of first demand.

Interest charges shall be computed at the legal rate on loans as prescribed by law or appropriate authority reckoned from the date the assessment or deficiency became due and payable, until full payment of said assessment or deficiency.

6.2 Final Demand and Imposition of Penalty Charges

Failure or refusal to comply with the first demand shall constitute willful failure or refusal to file the certified statement and/or pay the assessment or deficiency. A final demand letter shall be sent by registered mail or personal service directing the defaulting bank to file the certified statement and to pay the assessment or deficiency, including interest plus penalty charges, within thirty (30) calendar days from receipt of final demand.

Penalty charges shall be equivalent to twice the amount of interest payable reckoned from the date the assessment became due and payable as provided in RA 3591, as amended, and its implementing regulatory issuances.

6.3 Non-Compliance with Rules on Filing of Certified Statements

Failure to file any FCS or RCS including required supporting schedules and/or any willful making of a false statement or entry in any certified statement shall subject the director, officer, employee or agent of the bank to the sanctions and penalties of Section 21 (f) and (g) of RA 3591, as amended, and its implementing regulatory issuances. In addition, a member bank that fails to file any FCS or RCS may be compelled by PDIC to file such statement through the appropriate court, tribunal or agency. These are without prejudice to other actions that PDIC may take under RA 3591, as amended, and its implementing regulatory issuances, and other laws.

6.4 Non-Compliance with Rules on Payment of Assessment Due STECDc

In case of non-payment or failure to pay in full the semi-annual assessment in the manner and within the period prescribed under these Revised Rules and Regulations on Assessments, the member bank shall be considered in default. Provided, that, such default is not due to a dispute over the amount of the assessment and that no security deposit has been arranged, such member bank shall be prohibited from doing the following acts for as long as it remains in default:

i. pay any dividend on its capital stock or interest on its capital notes or debentures (if such interest is required to be paid only out of net profits); or

ii. distribute any of its capital assets.

Applicable sanctions under RA 3591, as amended, and its implementing regulatory issuances, shall be imposed against the directors and/or officers of the defaulting member bank who carry out any of the foregoing prohibited acts.

PDIC, in a suit brought in any court of competent jurisdiction, is entitled to recover from a member bank the amount of unpaid assessment due to PDIC, whether or not the bank shall have filed a certified statement or a suit shall have been brought by PDIC to compel the member bank to file any of the certified statements.

The accrued interest on the assessment shall earn interest equivalent to the legal rate on loans as prescribed by law or appropriate authority, from the date of PDIC's judicial demand for payment pursuant to Article 2212 of the Civil Code.

6.5 Other Sanctions

PDIC may, at its discretion, institute a case for collection against a defaulting bank that fails or refuses to comply with PDIC's final demand, without prejudice to the imposition of administrative sanctions on the bank officials responsible for non-filing of certified statement and/or non-payment of the assessment or deficiency as allowed under Section 21 (g) of RA 3591, as amended, and its implementing regulations.

SECTION 7. Conduct of Onsite Assessment Audit. —

PDIC may conduct an onsite assessment audit on member banks to ascertain:

i. bank's overall compliance with assessment laws, rules and regulations; and

ii. correctness and validity of assessment items declared in the FCS/RCS and assessment paid to PDIC.

Onsite assessment audit shall be conducted not more than once every semester. It may be conducted in conjunction with other initiatives such as regular compliance audit, onsite examination or special audit.

The assessment audit shall cover verification of information in the FCS/RCS filed vis-a-vis the bank's schedules/records such as General Ledgers, Daily Trial Balances and other schedules, which may be required by PDIC auditors for reference.

SECTION 8. Rules on Contested Assessment. —

8.1 Contested Assessment

If the default is due to a dispute between the member bank and PDIC over the amount of assessment, the prohibitions enumerated in Section 6.4 shall not apply if the member bank shall deposit with PDIC security satisfactory to PDIC such as, but not limited to, an escrow account established in accordance with Section 8.2 hereof, until the final determination of the issue.

A written notice shall be issued by PDIC allowing such member bank to undertake the actions cited in items (i) and (ii) of subsection 6.4 upon the member bank's posting of sufficient security and PDIC's acceptance thereof. The permission to undertake the actions in Section 6.4 may be revoked by PDIC if the member bank violates the terms of the security or is in default for the payment of other assessments.

8.2 Security Deposit for Contested Assessment Billings

A member bank that disputes the assessment payable to PDIC shall establish an escrow account in the amount equivalent to the contested deficiency to be opened and maintained with the head office of any of the designated depository banks of PDIC. The escrowed amount shall be covered by an escrow agreement by and among the member bank, PDIC, and the designated depository bank of PDIC as escrow agent. AHDTIE

i. Form of Security. The security deposits acceptable to PDIC shall refer to cash, securities issued by the Republic of the Philippines, or any other security deposit acceptable to PDIC.

ii. Reporting and Updating of Escrow Deposit Balance. The escrow agent shall furnish PDIC with the semi-annual reports on the balances of the escrow account. Should the member bank receive an updated assessment of account from PDIC such that the amount is found to be less than the new assessment, the member bank must correspondingly increase the escrow deposits to cover the deficiency within thirty (30) days from receipt of notice from PDIC. The amount of escrow deposit net of all fees, charges and taxes should always be sufficient to cover PDIC's computation of assessment plus interest charges equivalent to the legal rate on loans as prescribed by law or appropriate authority.

iii. Final disposition of the escrow assets. The security deposit/s, including interest earnings accruing thereon, shall be ceded to the party in whose favor the dispute is finally resolved.

SECTION 9. Rules on Excess Assessment Payment. —

9.1 Assessment Overpayment

PDIC shall return the amount paid in excess of the assessment due to it by either refunding to the member bank the excess, or by crediting the excess against succeeding assessment payment/s due from such member bank until the credit is exhausted.

9.2 Period to Recover Excess Assessment Paid to PDIC

No action or proceeding shall be brought for the recovery of any amount paid to PDIC in excess of the amount due to it, unless such action or proceeding shall have been brought within five (5) years after the right accrued for which the claim is made, except where the member bank has made or filed with PDIC a false or fraudulent certified statement with intent to evade, in whole or in part, the payment of assessment. In which case, the claim shall not have been deemed to have accrued until the discovery by PDIC that the certified statement is false or fraudulent.

SECTION 10. Repealing Clause. —

All previous PDIC Rules and Regulations on Assessments namely, RI Nos. 92-01, 2002-04, 2005-01 and 2006-02, shall be deemed repealed and superseded.

SECTION 11. Effectivity. —

These Revised Rules and Regulations on Assessments shall take effect fifteen (15) days after publication in a newspaper of general circulation.

(SGD.) JOSE C. NOGRALES

President

ANNEX A

First Certified Statement

ANNEX B

Regular Certified Statement

ANNEX C1

PDIC Form No. 201-A-1

 

 

ANNEX C2

PDIC Form No. 201-A-1.1

 

ANNEX C3

PDIC Form No. 201-A-1.2

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