IRR for amended PDIC charter signed
The Philippine Deposit Insurance Corp. (PDIC), the Bangko Sentral ng Pilipinas (BSP) and the Department of Finance (DOF) signed the implementing rules and regulations (IRR) for the amended charter of the state-owned deposit insurer.
During a virtual ceremony, PDIC President and Chief Operating Officer Roberto B. Tan, BSP Governor Felipe M. Medalla, and Finance Secretary Benjamin E. Diokno signed the IRR for Republic Act 11840, or the amended PDIC Charter.
The IRR will take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation.
Among the salient provisions of the amended PDIC Charter is the authority of the state deposit insurer to adjust the maximum deposit insurance coverage (MDIC) without the need for legislation.
Under the new Charter, the PDIC board shall review the MDIC, which is currently at P500,000 per depositor, per bank, every three years and adjust it "as may be warranted.”
Moreover, the PDIC is now mandated to provide insurance cover to Islamic bank products or arrangements classified as deposits by the BSP.
Because of the peculiar characteristics of Islamic banking, the amended PDIC Charter likewise authorizes the establishment of separate deposit insurance funds, or insurance arrangements or structures or takaful to cover these types of deposit products.
The PDIC can now also sell closed bank assets to financial institution strategic transfer corporations (FISTCs) that was specifically created under the Financial Institutions Strategic Transfer (FIST) Act.
FISTCs can purchase the non-performing assets of financial institutions including loans and real and other properties acquired (ROPA), both of which comprise the biggest chunks of assets held by the PDIC as the statutory liquidator of closed banks.
Under the law, the PDIC is now an attached agency to the BSP for policy and program coordination.
Following the signing of the IRR, Tan expressed optimism that the amended PDIC Charter would redound to better protection for the depositing public.
“Now equipped with the amended Charter and its IRR, the PDIC is more confident in its enhanced capability to protect depositors under any economic conditions,” Tan said.
“As such, the depositing public can continue feeling secure about entrusting their hard-earned money with banks,” he added.