7. The Anti-Money Laundering Council (“AMLC”) may review bank accounts on the basis of a court order if there is a probable reason that the deposits are related to illegal activity or a money laundering offence. “BSP supervisors are not allowed to view bank accounts. [Sometimes] bank owners, usually small banks, steal their own banks. [We demand that] at least banking supervision does not fall under secrecy,” Medalla said. “I need your support there. [If] banking secrecy is too important for the political system, at least don`t cripple it and disable your banking supervisors,” he told Finex members. To strengthen the Philippine banking system, the Bangko Sentral ng Pilipinas (BSP) on Tuesday called on the House of Representatives to prioritize the passage of the “limited repeal” of the Bank Secrecy Act and the Financial Accounts Regulation Bill. The Republic Act of 1405, or the Secrecy of Bank Deposits Act, was introduced in 1955 to ensure the confidentiality of all types of bank deposits, with the exception of those where the depositor authorizes disclosure, during impeachment proceedings under a court order in cases of corruption or misconduct, or in cases where the deposit is the subject of a dispute. The purpose of the law was to prevent private hoarding and to encourage people to deposit their money with banks so that it could be used to lend. 9. The Bangko Sentral may audit bank accounts as part of its regular or special audit to verify compliance with the Money Laundering Act. The prompt repayment of depositors, the effectiveness of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework and monitoring and resolution activities are hampered by the Banking Secrecy Act, he stressed.
On 9 September 1955, Law No. 1405, also known as the Law Prohibiting the Disclosure or Investigation of Deposits with a Banking Institution (“Banking Secrecy Act”), was approved. This law was enacted to encourage individuals to deposit their money with banks instead of hoarding it. The BSP, while still called the Central Bank of the Philippines, was given the power to investigate or investigate bank deposit accounts in 1981 if approved by the Monetary Board (MB), its highest decision-making body. In 1981, Capule said, the BSP was given the power to investigate or investigate bank deposit accounts if approved by the Monetary Committee under the 1792. You may be wondering why it is necessary to protect the secrecy of bank deposits? Technically, the law prefers that the money be deposited with banks so that it can be properly used to support the country`s economic development. However, it is more relevant on a practical level. Let us take you, dear reader, as an example.
Let`s say you only have 1,000 pesos in your bank account. Surely you don`t want anyone (like your friend, employer, or stranger) to find out. Either you don`t want others to know that you don`t have enough money, or you just don`t feel comfortable with people who are curious about your financial affairs. On the other hand, if you have 100,000,000.00 pesos in your bank account, you also don`t want others to find out for fear that you`ll be kidnapped, or that relatives might borrow from you, or simply, it`s your personal business. In all these cases, a person`s financial situation is a private matter. The transactions that take place on your bank account are not just empty numbers. There are stories attached to such transactions. Therefore, these financial transactions are similar to your personal activities, which should not be easily accessible to anyone.
Capule, who is also a senior deputy governor at the BSP, referred to the regulation and supervision of the banking system to ensure its safety and soundness. 8. The AMLC may investigate bank accounts WITHOUT a court order if there is a probable reason why the deposits are related to certain crimes such as kidnapping for ransom, violation of the Dangerous Drugs Act, kidnapping, destructive arson, murder and violations of RA 6235 (acts detrimental to civil aviation); BANGKO Governor Sentral ng Pilipinas (BSP), Felipe Medalla, wants the Financial Executives Institute of the Philippines (Finex) to support the repeal of the Bank Secrecy Act. The current skirmish between President Duterte and Senator Trillianes over the waiver of bank secrecy has sparked public interest in the issue of bank secrecy. So, what is banking secrecy? Is it absolute? Are there any exceptions? 5. In the case of a summons from the Ombudsman to investigate an inquiry he has conducted, where a case is already to be pending before the court, the invoice must be clearly indicated and the examination is limited to the subject matter of the pending proceedings; and bank staff and depositors must be notified in order to be present at the inspection; According to Tieng, the economic hardship caused by the pandemic has led some people to resort to “easy money” or seek funds obtained through dubious means or for little work, such as buying and selling bank accounts that phishers or cybercriminals use to avoid arrest and criminal liability. The chairman of the House Committee on Banks and Financial Intermediaries, Irwin Tieng, said he would introduce the bill to amend the BSP`s proposed law on the secrecy of bank deposits. At a hearing of the House Committee on Banks and Financial Intermediaries, BSP Deputy Governor and General Counsel Elmore Capule said the BSP recommended limiting changes to the secrecy of bank deposits to the limits of BSP`s banking supervision and its investigation into closed banks. “The World Bank and the IMF have found that bank secrecy laws in the country limit the ability of GNP to provide effective surveillance,” he added. At a special meeting of Finex members, Medalla said the central bank was demanding more authority in order to be able to investigate suspicious bank accounts, especially those potentially linked to illegal activities. He also said the Philippines would be able to move away from the Financial Action Task Force`s (FATF) “grey list” by revising bank secrecy laws and conducting AML/CFT activities.
and supervisory frameworks should, among other things, amend bank secrecy laws to give GNPs full access to bank deposits and other data,” he added. 6. The BIR may request bank deposits as part of a request to compromise the tax liability or to determine the gross assets of a deceased person; “BSP recommends limiting changes to the secrecy of bank deposits within the limits of BSP`s banking supervision and its investigation of banks,” which the Muslim Brotherhood concluded, he said. INQ “Current bank deposit secrecy laws limit the depth of information and records that BSP can investigate,” Capule said. Citing a study by the International Monetary Fund (IMF) and the World Bank, Capule said that so far, only the Philippines has the secrecy of bank deposit laws that restrict surveillance. “But we`ve seen several times that there is a number of insider abuses in banks, the majority of banks [defaults] are insider abuses and our problem is that these people should protect the integrity of their banks,” Capule said. The Bank Secrecy Act protects all deposits of any kind in banks or banking institutions in the Philippines, as well as investments in government bonds. This law prohibits any person, subject to the exceptions below, from disclosing to a person information about funds or real estate belonging to depositors in the custody of the bank. Simply put, no one can just go to your bank and ask for your bank balance.
“What the BSP is proposing is a very limited lifting of banking secrecy so that we can be on an equal footing with international best practices. We want a small exemption to prevent internal abuse. We know that under our existing laws, bank owners, shareholders, directors are insiders and are required by law to show the utmost care and loyalty to their depositors,” he said. As you can see, despite many exceptions, securing such exceptions is not an easy task.
