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Regulations which are inconsistent with the provisions of this Act are hereby repealed.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