BANK SECRECY LAW

NOTES:-  RA 1405 declares all deposits absolutely confidential, with the exceptions of: written consent

of the depositor; in cases of impeachment; upon order of a competent court in cases of bribery

or dereliction of duty of public officials; or in cases where the money deposited or invested is

the subject matter of the litigation.

REPUBLIC ACT NO.1405

AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO, DEPOSITS WITH ANY BANKING

INSTITUTION AND PROVIDING PENALTY THEREFOR

SECTION 1. It is hereby declared to be the policy of the Government to give

encouragement to the people to deposit their money in banking institutions and to

discourage private hoarding so that the same may be properly utilized by banks in

authorized loans to assist in the economic development of the country.

SECTION 2. All deposits of whatever nature with banks or banking institutions in the

Philippines including investments in bonds issued by the Government of the

Philippines, its political subdivisions and its instrumentalities, are hereby considered as

of an absolutely confidential nature and may not be examined, inquired or looked

into by any person, government official, bureau or office, except upon written

permission of the depositor, or in cases of impeachment, or upon order of a

competent court in cases of bribery or dereliction of duty of public officials, or in

cases where the money deposited or invested is the subject matter of the litigation.

SECTION 3. It shall be unlawful for any official or employee of a banking institution to

disclose to any person other than those mentioned in Section two hereof any

information concerning said deposits.

SECTION 4. All Acts or parts of Acts, Special Charters, Executive Orders, Rules and

Regulations which are inconsistent with the provisions of this Act are hereby repealed.

SECTION 5. Any violation of this law will subject offender upon conviction, to an

imprisonment of not more than five years or a fine of not more than twenty thousand

pesos or both, in the discretion of the court.

SECTION 6. This Act shall take effect upon its approval.

 

REPUBLIC ACT NO. 6426 

AN ACT INSTITUTING A FOREIGN CURRENCY DEPOSIT SYSTEM IN THE

PHILIPPINES, AND FOR OTHER PURPOSES. 

Section 1. Title. This Act shall be known the "Foreign Currency Deposit Act of the Philippines."

Sec. 2.  Authority to deposit foreign currencies. Any person, natural or juridical, may in accordance

with the provisions of this Act, deposit with such Philippine banks in good standing, as may, upon

application, be designated by the Central Bank for the purpose, foreign currencies which are acceptable

as part of the international reserve, except those which are required by the Central Bank to be

surrendered in accordance with the provisions of Republic Act Numbered Two hundred sixty-five. chanrobles virtualaw library 

Sec. 3.  Authority of banks to accept foreign currency deposits. The banks designated by the Central

Bank under Sec. two hereof shall have the authority:

1) To accept deposits and to accept foreign currencies in trust:

Provided , That numbered accounts for recording and servicing of said deposits shall be allowed; cralaw 

2) To issue certificates to evidence such deposits; cralaw 

3) To discount said certificates; cralaw 

4) To accept said deposits as collateral for loans subject to such rules and regulations as may be

promulgated by the Central Bank from time to time; and

5) To pay interest in foreign currency on such deposits. chanroblesvirtuallawlibrary 

Sec. 4. Foreign currency cover requirements. Except as the Monetary Board, by a unanimous vote of

all incumbent members, may otherwise prescribe or allow, the depository banks shall maintain at all

times a one hundred percent foreign currency cover for their deposit liabilities, of which cover at least

fifteen seventy-one. Thereafter, such sum as may be necessary for the same purpose shall be included

in the annual General Appropriations Act. chanrobles virtualaw library 

Sec. 5. This Act shall take effect upon its approval. 

"Sec. 6. Tax Exemptions. All foreign currency deposits made under this Act, as amended by

Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential

Decree No. 1034, including interest and all other income or earnings of such deposits, are hereby

exempted from any and all taxes whatsoever irrespective of whether or not these deposits are made by

residents or non-residents so long as the deposits are eligible or allowed under aforementioned laws

and, in the case of non-residents, irrespective of whether or not they are engaged in trade or business in

the Philippines."

"Sec. 8. Secrecy of Foreign Currency Deposits All foreign currency deposits authorized under this Act,

as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under

Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential

nature and, except upon the written permission of the depositors, in no instance shall such foreign

currency deposits be examined, inquired or looked into by any person, government official, bureau or

office whether judicial or administrative or private: Provided, however, that said foreign currency

deposits shall be exempt from attachment, garnishment, or any other order or process of any court,

legislative body, government agency or any administrative body whatsoever."