Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILLNO._3162

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, therefore, 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.

As the agency 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
that if they failed to comply with the required minimum maintaining balance, their
limited financial resources would, instead of earning interest, be considerably


lessened due to the penalties imposed by the banks. It must be pointed out that the
moneys deposited by the people with very limited resources, no matter how meagre
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 in a large scale, 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 charge
or maintenance fees on savings and current/demand deposit accounts that failed to
comply with the required minimum maintain balance and providing penalties for
violation thereof.

In view of the foregoing, the passage of this bill js €arn

epresentative
District Caloocan City

Page 02


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bi No, 8162

Introduced by Representative EDGAR R. ERICE

AN ACT
PROHIBITING BANKS FROM IMPOSING SERVICE CHARGE 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 Falling to
Comply with the Required Minimum Maintaining Balance. - It shall be unlawful for
any bank, whether government-owned/controlled or private, local or foreign, to
impose service charge or any other fees on savings or current accounts which are
not complying with the required minimum maintaining balance 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 nor 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 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 of the bank 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,