Article 178Supplement v1, p. 178

COMMERCIAL LAWS SUPPLEMENT

showing for the six months ending on the preceding

June thirty the amount of the assessment base and the

amount

of

the

semiannual

assessment

due

to the

Corporation

for

the period ending on the following

December thirty-one, determined in accordance with

subsection (a) of this section, which shall contain or be

verified by a written declaration that it is made under the

penalties of perjury. Each insured bank shall pay to the

Corporation the amount of the semiannual assessment it

is required to certify. On or before the 31st day of January

of each year, each insured bank shall file with the

Corporation a similar certified statement for the six

months ending on the preceding December thirty-one

and shall pay to the Corporation the amount of the

semiannual assessment for the period ending in the

following June thirty which it is required to certify. (as

amended by PD No 1940)

(c) Each bank which becomes an insured bank shall not

be required to file any certified statement or pay any

assessment

for

the

semi-annual

period

in

which it

becomes an insured bank. On the expiration of such

period, each such bank shall comply with the provisions

of

subsection

(b)

of

this

section

except

that

the

semi-annual

assessment

base

for

its

first

certified

statement shall be the assessment base of the bank as of

the close of business on the preceding June thirty or

December

thirty-one,

whichever

is

applicable,

determined in accordance with subsection (a) of this

section. If such bank has assumed the liabilities for

deposits of another bank or banks, it shall include such

liabilities

in

its

assessment

base.

The

first

certified

statement

shall

show

as

the

amount

of

the

first

semi-annual

assessment due to the Corporation, an

amount equal to the product of one-half of the annual

assessment rate multiplied by such assessment base.

(d)

All

assessment

collections

and

income

from

operations after expenses and charges shall be added to

the DIF under Section 17 hereof. Such expenses and

charges are: (1) the operating costs and expenses of the

Corporation for the calendar year; (2) additions to reserve

to provide for insurance and financial assistance losses,

net of recoverable amounts from applicable assets and

collaterals, during the calendar year; and (3) the net

insurance and financial assistance losses sustained in said

calendar year.

(e) The Corporation (1) may refund to an insured bank any

payment of assessment in excess of the amount due to

the Corporation or (2) may credit such excess toward the

payment of the assessment next becoming due from

such bank and upon succeeding assessments until the

credit is exhausted.

(f) Any insured bank which fails to file any certified

statement required to be filed by it in connection with

determining the amount of any assessment payable by

the bank to the Corporation may be compelled to file

such

statement

by

mandatory

injunction

or

other

appropriate remedy in a suit brought for such purpose by

the Corporation against the bank and any officer or

officers

thereof

in

any

court

of

the

Philippines

of

competent jurisdiction in which such bank is located.

(g) The Corporation, in a suit brought in any court of

competent jurisdiction, shall be entitled to recover from

any insured bank the amount of any unpaid assessment

lawfully payable by such insured bank to the Corporation,

whether or not such bank shall have filed any such

certified statement and whether or not suit shall have

been brought to compel the bank to file any such

statement. No action or proceeding shall be brought for

recovery of any assessment due to the Corporation or for

the recovering of any amount paid to the Corporation in

excess of the amount due to it, unless such action or

proceeding shall have been brought within five years

after the right accrued for which the claim is made,

except where the insured bank has made or filed with the

Corporation a false or fraudulent certified statement with

the 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 the

Corporation

that

the

certified

statement is false or

fraudulent.

(h) Should any insured bank fail or refuse to pay any

assessment required to be paid by such bank under any

provision of this Act, and should the bank not correct

such failure or refusal within thirty (30) days after written

notice has been given by the Corporation to an officer of

the bank citing this subsection, and stating that the bank

has failed or refused to pay as required by the law, the

Corporation may, at its discretion, file a case for collection

before the appropriate court without prejudice to the

imposition of administrative sanctions allowed under the

provisions of this law on the bank officials responsible for

the nonpayment of assessment fees.

(i) The Corporation shall have the authority to collect a

special

assessment

from

any

member

bank

and

prescribe the terms and conditions thereof to maintain

the target level of the DIF set by the Board of Directors in

accordance with this Act.

SANCTIONS AGAINST UNSAFE AND UNSOUND

BANKING PRACTICES

SECTION 8. (a) Whenever upon examination by the

Corporation into the condition of any insured bank, it

shall be disclosed that an insured bank or its directors or

agents have committed, are committing or about to

commit unsafe or unsound practices in conducting the

business of the bank, or have violated, are violating or

about to violate any provisions of any law or regulation to

which the insured bank is subject, the Board of Directors

shall

submit

the

report

of

the

examination

to the

Monetary Board to secure corrective action thereon. If no

such corrective action is taken by the Monetary Board

within forty-five (45) days from the submission of the

report, the Board of Directors shall, motu proprio, institute

corrective action which it deems necessary. The Board of

Directors may thereafter issue a cease and desist order,

and require the bank or its directors or agents concerned

to correct the practices or violations within forty-five (45)

days. However, if the practice or violation is likely to cause

insolvency or substantial dissipation of assets or earnings

of the bank, or is likely to seriously weaken the condition

of the bank or otherwise seriously prejudice the interests

of its depositors and the Corporation, the period to take

corrective action shall not be more than fifteen (15) days.

The order may also include the imposition of fines

provided in Section 26(g) hereof. The Board of Directors

shall duly inform the Monetary Board of the Bangko

Sentral ng Pilipinas of action it has taken under this

subsection with respect to such practices or violations.

(b)

The

actions

and

proceedings

provided

in

the

preceding

subsections

may

be

undertaken

by

the

Corporation if, in its opinion, an insured bank or its

directors or agents have violated, are violating or about to

violate any provision of this Act or any order, rule or

instruction issued by the Corporation or any written

condition imposed by the Corporation in connection with

any transaction with or grant by the Corporation.

(c) The Corporation may terminate the insured status of

any bank that fails or refuses to comply, within thirty (30)

days from notice, with any cease-and-desist order issued

by the Corporation, or with any corrective action imposed

by the Monetary Board, under this section pertaining to a

deposit-related unsafe and/or unsound banking practice.

Such termination shall be final and executory, and shall

be effective upon publication of the notice of termination

in a newspaper of general circulation.

The deposits of each depositor in the bank on the

effective date of the termination of insurance coverage,

less all subsequent withdrawals, shall continue to be

insured up to the maximum deposit insurance coverage

for a period of one hundred eighty (180) days. Additions

to, or renewal of, existing deposits and new deposits in

such bank after the effective date of termination of

© Compiled by RGL

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