RECENEO
09 AUG 2016

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SEVENTEENTH CONGRESS
First Regular Session |

2758 —

FR ATION UNIT

HOUSE BILL NO.

Introduced by Representative EDGAR R. ERICE

EXPLANATORY NOTE

Section 2 of the General Banking Law of 2000 decrees that the State
recognizes the vital role of banks in providing an environment conducive to the
sustained development of the national economy and the fiduciary nature of banking
that requires high standards of integrity and performance. In furtherance thereof, the
State shall promote and maintain a stable and efficient banking and financial system
that is globally competitive, dynamic and responsive to the demands of a developing
economy.

To aid the banks in the fulfilment of its envisioned mandate, all sectors of
society were informed of the vital role of savings in economic development and, in
relation thereto, they were encouraged to save in banks to generate financial
resources and accelerate capital formation. It should be emphasized that the State in
effect also recognizes the vital role of the public in the pooling of financial resources
for the purpose of forming capital resources, which, in turn, will be used for economic
development through local, national and multinational investments.

‘As the agency of the government granted with the sole power to supervise the
operations and activities of banks, the Bangko Sentral ng Pilipinas issued the
Manual of Regulations for Banks. Section 263 of the said Manual provides that
banks are authorized to impose and collect service and maintenance fees on
savings and demand deposit accounts, whether active or dormant, that fall below the
required minimum monthly average daily balance subject to several conditions.
Pursuant to the above-stated authority, majority of the banks, therefore, made sure
that the imposition of such fees is clearly provided in the terms and conditions of
deposit furnished to their clients to be able to validly cause the deduction and
collection of the same.

At this juncture, it cannot be overemphasized that the regulation authorizing
banks to impose and collect service and maintenance fees on savings and demand
deposit accounts that fall below the required minimum maintaining balance is
antithetical to the State’s policy of encouraging the public to save in banks to enable
the latter to generate capital resources. Contrary to the original objective of
encouraging the public to deposit their money in banks, those who have very limited
resources would inevitably have second thoughts in depositing their money knowing

HOUSENF REPRESENTATIVES


that if they failed to comply with the required minimum maintaining balance, their
limited financial resources would, instead of earning interests, be considerably
lessened due to the severe and exorbitant penalties imposed by the banks. It must
be pointed out that the moneys deposited by the people with very limited resources,
no matter how meager they are in the eyes of the banks, still serve their purpose of
contributing to the capital resources of the country and, thus, not entirely worthless.
These depositors, therefore, do not deserve to be penalized for having substantially
lesser money to deposit lest they would be tempted to completely pull out their
money from the banks. If this would happen on a large scale basis, its adverse effect
‘on the business of the banks and on the State's policy of generating capital
resources for the development of national economy cannot simply be overlooked.

This bill, therefore, seeks to prohibit the banks from imposing service charges
or maintenance fees on savings and current/demand deposit accounts that failed to
comply with the required minimum maintaining balance and providing penalties for
violation thereof.

In view of the foregoing, the passage of this bill is earnestly sought.

Representative
2” District, Caloocan City


Republic of the Philippines
House of Representatives

Qzxzon Gity

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILLNo. 2758

Introduced by Representative EDGAR R. ERICE

AN ACT
PROHIBITING BANKS FROM IMPOSING SERVICE CHARGES OR ANY OTHER
FEES ON SAVINGS OR CURRENT ACCOUNTS FOR FAILING TO COMPLY
WITH THE BANK’S REQUIRED MINIMUM MAINTAINING BALANCE AND
PROVIDING PENALTIES FOR VIOLATION THEREOF

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

SECTION 1. Prohibition Against Imposition of Fees or Charges for Failing to
Comply with the Required Minimum Maintaining Balance. - \t shall be unlawful for
any bank, whether government-owned/controlled or private, local or foreign, to
impose service charges or any other fees on savings or current accounts which are
not complying with the required minimum maintaining balances set by the bank
policies.

SEC. 2. Penalty. — Any violation of this Act shall be punished by imprisonment
of not less than six (6) months and one (1) day not more than six (6) years or a fine
of not less than One Million Pesos nor more than Five Million Pesos or both such
imprisonment and fine at the discretion of the court. If the offender is a juridical
person, the president, vice-president or the general manager of said banking
institution shall be held liable for the penalties herein provided. If the offender is an
alien, he shall, in addition to the aforementioned penalties, be immediately deported
after the service of his sentence here in the Philippines.

The license to operate banks found by a competent court to have violated this
Act shall be immediately cancelled and shall be perpetually disqualified from
applying for the same license to operate.


SEC. 3. Implementing Rules and Regulations. - The Bangko Sentral ng
Pilipinas (BSP) in coordination with the Department of Finance (DOF) shall, within
ninety (90) days from the approval of this Act, issue the necessary rules and
regulations for the effective implementation of this Act.

SEC. 4. Repealing Clause. — All laws, decrees, executive disorders, rules and
regulations inconsistent with this Act are hereby repealed and modified accordingly.

SEC. 5. Effectivity. - This Act shall take effect after fifteen (15) days following
the completion of its publication in the Official Gazette or in at least two (2) national
newspapers of general circulation.

Approved,

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