FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No. 4438
EXPLANATORY NOTE

According to the Manual of Regulations for Banks, dormant accounts are
defined as (1) Current or checking accounts showing no activity (deposit or
withdrawals) for a period of one (1) year or (2) Savings account showing no activity
(deposit or withdrawals) for a period of two (2) years.

‘The practice of these banks, as authorized by the Bangko Sentral ng Pilipinas
is to charge fees on these dormant accounts, usually in an amount ranging from
P300 to P500 per month,

There are reports that some Overseas Filipino Workers come home afler their
work abroad to find that instead of their bank deposits increasing, it has been
reduced by absurd dormancy fees imposed by the banks.

One explanation as to why banks charged dormancy fees is that banks may
have anticipated a certain amount of activity on each account, which can generate
fee income for them. And because of the inactivity, they see these dormant fees as a
way to replace the expected income that they jost to the detriment of the depositor.

This practice has to stop because banks must understand that they are
operating primarily to help people and not make money off innocent depositors who
may have forgotten about an account or who had to go overseas and left the account
inactive while abroad.

Also, why is there a need to charge service fees when banks are in fact
already eaming interests when the deposits are utilized as toans to bank borrowers
at substantially higher rates than the interest in deposits.

{In view of the foregoing, immediate approval of this bill is eamestly requested

RUEUS B. RODRIGUEZ

ME

MAXIMO’B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES }
FIRST REGULAR SESSION

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House BillNo. 4438

AN ACT
PROHIBITING THE IMPOSITION OF FEES AND CHARGES ON DORMANT
ACCOUNTS, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 14. A dormant or inactive account is hereby defined as:
(1) Current or checking accounts showing no activity (deposit or withdrawals) for
a period of three (3) years.
(2) Savings account showing no activity (deposit or withdrawals) for a period of
five (5) years.

‘SEC 2. Banks shali review and segregate dormant accounts as herein defined at
least once in every semester.

SEC 3. intemal contro! measures -

(1) As a matter of policy, banks shall exert all efforts to prevent checking and savings
accounts from becoming dormant. When it becomes apparent that an account is
inactive, a short ‘etter should be sent to the depositer encouraging him to use his
account.

In case of checking accounts, the banks shail ensure that the monthly
statement of accounts reach the depositors. If the depositors cannot be located, the
following steps should be undertaken:

(a) Check any significant changes or fluctuations in the depositors’ account

balances over a period of time with emphasis on accounts with decreasing

balances;

(b) Verify apparent reactivation entries, represented either by deposit or

withdrawal, that appears to have prevented the account from being classified

as dormant, and

{c) Investigate any obvious alteration of the ledger records,

(2) Segregated dormant accounts shall be placed under joint custody of two (2)
responsible officers/employees,

(3) A separate ledger contral for dormant accounts shall be maintained.

(4} Signature cards for dormant accounts shall also be segregated from active files
and held under joint custody

(5) Entries to dormant account ledgers shall be verified and approved by a
designated officer. His initials shail be placed next to the entry on the ledger sheet.


(6) All inquiries on dormant accounts shall be coursed to one officer who should
obtain sufficient identification from the inquirer to assure that he is entitled to the
information.

{7) A trial balance of dormant account ledgers shall be taken periodically and
balances with the general control account by an employee other than the
bookkeeper.

(8) Dormant or inactive accounts shail be verified directly with depositors.

(9) All transactions affecting dormant accounts shall be Subject to audit by the
internal auditor.

(10) A semestral report on deposit accounts transferred to dormant shall be rendered
to bank management.

SEC. 4. Prohibition - Banks are hereby prohibited from imposing or charging
service, maintenance or any other fee on dormant accounts as defined in this Act.

SEC. 5. Upon expiration of a period as stated in Section 4 of this Act, the unclaimed
balance in the dormant account, including all increase and proceeds thereof, shall be
deposited to the National Treasury to be used by the National Government.

SEC. 6. Notices —- After one year has lapsed without any activity on any account, the
bank shail send a notice to the depositor informing him of said inactivity. Theseafter,
banks shall regularly send notices to the depositor every six months.

Three (3) months prior to the expiration of the periods as stated in Section 1
of this Act, the bank shall send a final notice to the depositor informing him of the
impending deposit of his account to the National Treasury.

SEC. 7. implementing Rules and Regulations — Within three (3) months from the
effectivity of this Act, the Bangko Sentral ng Pilipinas, in consultation with the
Department of Finance and the Bureau of Treasury shall issue the rules and
regulations implementing the same

SEC. 8. Separability Clause — If for any reason, any provision of this Act or any part
thereof shall be held unconstitutional or invalid, the other parts or provisions of this
Act, which are not affected thereby, shalll remain in force and effect.

SEC. 9. Repealing Clause — All laws, decrees, orders, rules and regulations
including Presidential Decree No. 679, or parts thereof, and the Manual of
Regulations for Banks which are inconsistent with any of the provisions of this Act
are hereby repealed, amended or modified accordingly.

SEC. 10. Effectivity Clause - This Act shall take effect fifteen (15) days after its
complete publication in at least two newspapers of general circulation.

Approved,