Section 23Sec./Art. 23

A new section entitled Section 11 of the same Act is hereby inserted between Sections 10 and 12 which shall read as follows:

BANK RESOLUTION

SEC. 11. (a) The Corporation, in coordination with the Bangko Sentral ng Pilipinas, may commence the resolution of a bank under this section upon:

(1) Failure of prompt corrective action as declared by the Monetary Board; or

(2) Request by a bank to be placed under resolution.

The Corporation shall inform the hank of its eligibility for entry into resolution.

(b) The Bangko Sentral ng Pilipinas shall inform the Corporation of the initiation of prompt corrective action on any bank and shall be authorized to share with the Corporation all information, agreements or documents, including any order of the Monetary Board, in relation to the prompt corrective action. The Corporation shall have the authority to inquire and monitor the status of banks under prompt corrective action.

(c) When there is a failure of prompt corrective action as declared by the Monetary Board due to capital deficiency, the Corporation, its duly authorized officers or employees, may examine, inquire or look into the deposit records of a bank: Provided, That such authority may not be exercised when the failure of prompt corrective action is due to grounds other than capital deficiency. For this purpose, banks, their officers and employees are hereby mandated to disclose and report to the Corporation or its duly authorized officers and employees, deposit account information in said bank.

The Corporation, its duly authorized officers or employees are prohibited from disclosing information obtained under this section to any person, government official, bureau or office. Any act done pursuant to this section shall not be deemed as a violation of Republic Act No. 1405, as amended, Republic Act No. 6426, as amended, Republic Act No. 8791, and other similar laws protecting or safeguarding the secrecy or confidentiality of bank deposits: Provided, That any unauthorized disclosure of the information under this section shall be subject to the same penalty under the foregoing laws protecting the secrecy or confidentiality of bank deposits.

(d) The stockholders, directors, officers or employees of the bank shall have the following obligations:

(1) Ensure bank compliance with the terms and conditions prescribed by the Corporation for the resolution of the bank;

(2) Cause the engagement, with the consent of the Corporation, of an independent appraiser or auditor for the purpose of determining the valuation of the bank consistent with generally accepted valuation standards;

(3) Ensure prudent management and administration of the banks assets, liabilities and records; and

(4) Cooperate with the Corporation in the conduct or exercise of any or all of its authorities under this Act and honor in good faith its commitment or undertaking with the Corporation on the resolution of the bank.

(e) Within a period of one hundred eighty (180) days from a banks entry into resolution, the Corporation, through the affirmative vote of at least five (5) members of the PDIC Board, shall determine whether the bank may be resolved through the purchase of all its assets and assumption of all its liabilities, or merger or consolidation with, or its acquisition, by a qualified investor.

For this purpose, the Corporation may:

(1) Determine a resolution package for the bank;

(2) Identify and, with the approval of the Monetary Board, pre-qualify possible acquirers or investors;

(3) Authorize pre-qualified acquirers or investors to conduct due diligence on the bank, for purposes of determining the valuation of a bank through an objective and thorough review and appraisal of its assets and liabilities, and assessment of risks or events that may affect its valuation; and

(4) Conduct a bidding to determine the acquirer of the bank.

(f) In determining the appropriate resolution method for a bank, the Corporation shall consider the:

(1) Fair market value of the assets of the bank, its franchise, as well as the amount of its liabilities;

(2) Availability of a qualified investor;

(3) Least cost to the DIF; and

(4) Interest of the depositing public.

(g) The Corporation may appoint or hire persons or entities of recognized competence in banking, finance, asset management or remedial management, as its agents, to perform such powers and functions of the Corporation in the resolution of a bank, or assist in the performance thereof.

(h) The PDIC Board shall prescribe the guidelines or criteria for a bank to be placed under resolution.

(i) Upon a determination by the Corporation that the bank may not be resolved, the Monetary Board may act in accordance with Section 30 of Republic Act No. 7653 or the New Central Bank Act.

(j) Bank resolution involving the purchase of all assets and assumption of all liabilities of a bank shall be exempt from the provisions of Act No. 3952, otherwise known as The Bulk Sales Law.

(k) The provisions of this section are without prejudice to any action that the Monetary Board may take under existing laws.