MANILA - Voting 257-0, the House of Representatives on Monday approved on final reading House Bill 7446 or the proposed law promoting transparent governance and instituting anti-corruption mechanisms in the operation of banks and other financial institutions.

The bill seeks to amend Republic Act 1405 or the "Secrecy of Bank Deposits Law" to empower the Bangko Sentral ng Pilipinas to investigate bank deposits.

According to the House committee fact sheet on HB 7446, the measure wants to lift the barriers in the effective investigation and prosecution of corrupt or illegal financial actions of stockholders, owners, directors, trustees, officers or employees of entities supervised and regulated by the BSP.

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It also aims to combat tax evasion, money laundering and other financial crimes, address the unintended consequences of bank secrecy laws, and comply with international standards on transparency in financial transactions.

The fact sheet says the bill defines the term "Deposits" as money or its equivalent received by a bank in the usual course of business and for which it is obliged to give credit to a commercial, checking, savings, time or thrift account evidenced by a passbook, certificate of deposit or other evidence of deposit, and other obligations of a bank which forms part of its deposit liabilities under applicable BSP rules and regulations..

The bill empowers the BSP to inquire into or examine deposits in the course of its investigation of closed banks, or when, in the determination of the Monetary Board, there is reasonable ground to believe that fraud, serious irregularity, or unlawful activity has been committed by a stockholder, owner, director, trustee, officer, or employee of BSP-supervised institutions, the representative, agent, related party or conspirators.

It limits the use of the results of bank examinations exclusively to the BSP, Securities and Exchange Commission, Philippine Deposit Insurance Corporation, Anti-Money Laundering Council, Department of Justice, and the courts.

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It likewise provides a safe harbor clause exempting banks or financial institutions, their directors, officers, or employees from any action, claim, demand, or liability, for acts done in compliance with an order of inquiry or examination of deposits from the BSP.

Under the proposed law, officials or employees of the BSP and banking institutions are prohibited from disclosing any information concerning deposits to any person other than those authorized under the law.

It also forbids the use of the Bank Secrecy Law for purposes of persecution or harassment, or as an instrument to hamper competition in trade and commerce.

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Any person or entity found guilty of violating the proposed law face imprisonment of not less than two years but not more 10 years, or a fine of not less than P50,000 or more than P2 million or both, at the discretion of the court.

The House will transmit the bill to the Senate for action.

FROM THE ARCHIVE

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