RULES IN ORDER TO DETERMINE THE INSURED DEPOSIT PAYABLE BY PDIC UPON CLOSURE OF AN INSURED BANK

SECTION 1.   Determining Beneficial Ownership of Deposit Accounts

1.1.      In
determining the insured deposit payable by PDIC to a depositor of a
closed insured bank, PDIC shall deem that the deposits are maintained
and/or actually owned by the accountees/names shown in the deposit account records of the bank, except in the cases provided under Sections 1.2 and 1.3 hereof.

1.2       In
case the outstanding deposit accounts are shown in the deposit account
records of the insured bank to be established and/or opened from
transfers or breakups of previous deposit accounts, PDIC shall recognize
the actual or beneficial ownership of the transferee/s / outstanding accountee/s, who is/are qualified relative/s of the transferor.

For
this purpose, the term “qualified relative/s” shall mean relative/s
within the third degree of consanguinity or affinity of the transferor.

1.3       Where the transferee/new deposit accountee
is not a qualified relative, PDIC shall not presume beneficial
ownership in his favor unless the deposit account records of the insured
bank disclose the certified details of the transfer or relationship
establishing the validity and/or effectivity
of the transfer of the deposits/funds from the transferor to the
transferee or establishing the right and capacity of the transferee or
new deposit accountee, such as Board
Resolution, order of competent government body/agency, contract or
similar document as required/provided by applicable laws.

SECTION 2.   Deposit Accounts in the Name of Corporation, Partnership, Association or Unincorporated Entity

2.1       For
deposit accounts and deposit transfers made in favor of individuals or
entities, either singly or jointly with individual/s from an account in
the name of a corporation, partnership, association or unincorporated
entity, certified details or information establishing the right and
capacity as well as the relationship of the corporation, partnership,
association or unincorporated entity with the individual/s, and/or the
validity or effectivity of the deposit
transfer shall be shown in the deposit account records of the bank, such
as Board Resolution, order of competent government body/agency,
contract or similar document as required/provided by applicable laws.

SECTION 3.   Documentation

3.1       If
the deposit account records of the closed insured bank do not show the
details/information mentioned under Sections 1.3 and 2.1, and the
deposit transfers will result in increased deposit insurance coverage,
the outstanding deposit shall be deemed as being maintained for the
benefit of the transferor although in the name of the transferee,
subject to consolidation with other deposits of the transferor.

3.2       In
addition to the document/s stated above, PDIC may require additional
documents from the depositor to ascertain the details of the deposit
transfer or his relationship with the transferor or his right and
capacity over the deposit.

3.3       Deposit
account records of the insured bank pertains to account ledgers,
signature cards, certificates of deposits, passbooks, corporate
resolutions, orders of competent government body/agency, contracts or
similar instruments, copies of which must be in the custody or
possession of the bank upon takeover by PDIC.

SECTION 4.   Duty of the Bank

4.1       In
order for the deposits to be covered by insurance and to cause
compliance with the rules herein provided, the insured bank shall within
thirty (30) days upon from date of effectivity of this Regulatory Issuance:

(a)        Print
these rules as part of the Terms and Conditions in the passbook,
certificate of time deposit and other deposit instrument which shall be
in the form and substance as in Annex “A” hereof.

(b)        Issue
a bank circular setting forth internal guidelines ensuring its
employees’ compliance with these rules and for its staff to duly inform
all depositors on the provisions herein, and

(c)        Send a letter to all depositors to their last recorded address.

4.2       The
insured bank shall maintain in good faith and in the regular course of
the business a complete and accurate record of every deposit
transaction.  Non-compliance or violation of any
provision of this Regulatory Issuance shall be subjected to the
corresponding penalties and fines imposed herein.

SECTION 5.   Penalties/Sanctions

Non-compliance
with or violation of this Issuance shall subject the bank, its
directors, officers and employees to the penalties provided for under
Sections 16 (f) and (g) of Republic Act 3591, as amended.

SECTION 6.   Separability Clause

If
any provision of this Issuance or the application thereof to any person
and/or banking institution is declared invalid for whatever reason, the
other provisions hereof shall not be affected thereby.

SECTION 7.   Effectivity

This
Issuance shall take effect fifteen (15) days after publication in the
Official Gazette or in any newspaper of general circulation.

Adopted: 02 May 2002

(SGD.) NORBERTO C. NAZARENO
President and Chief Executive Officer

ANNEX “A”

These provisions shall form part of the Terms and Conditions of Deposit, i.e. passbook, CTD or similar instrument.

•           DEPOSIT INSURANCE

1.         Deposits
are insured by the Philippine Deposit Insurance Corporation (PDIC) up
to a maximum amount of One Hundred Thousand Pesos (P100,000.00) per depositor.

2.         PDIC
shall presume that the names/s appearing on the deposit instrument
is/are the actual/beneficial owner/s of the deposit, except as provided
herein.

3.         In
case of transfers or break-up of deposits, PDIC shall recognize
actual/beneficial ownership of transferees who are qualified relatives
of the transferor.  Qualified relatives are transferees within the third degree of consanguinity or affinity of the transferor.

4.         In
case of (a) deposits in the name of, or transfers or break-up of
deposits in favor of, entities, either singly or jointly with
individuals, and (b) transfers or break-up of deposits in favor of
non-qualified relatives, whenever such transfers/break up will result in
increased deposit insurance coverage, PDIC shall recognize beneficial
ownership of the entity or transferee provided that the deposit account
records show the following:

(i)         Details or information establishing the right and capacity or the relationship of the entity with the individual/s, or

(ii)        details or information establishing the validity or effectivity of the deposit transfer, or

(iii)       copy
of Board Resolution, order of competent government body/agency,
contract or similar documents as required/provided by applicable laws.

In
the absence of any of the foregoing, PDIC shall deem the outstanding
deposit as maintained for the benefit of the transferor although in the
name of the transferee, subject to consolidation with the other deposits
of the transferor.

5.         PDIC
may require additional documents from the depositor to ascertain the
details of the deposit transfer or the right and capacity of the
transferee or his relationship to the transferor.