RFBT 8714 Banking Laws PDF

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CPA REVIEW SCHOOL OF THE PHILIPPINESREGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONSCOVERAGE: Banking LawsDirection: Read and select the best answer for the following questions. What is the government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the deposits of all banks wh...

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CPA REVIEW SCHOOL OF THE PHILIPPINES REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS COVERAGE: Banking Laws Direction: Read and select the best answer for the following questions. 1.

What is the government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the deposits of all banks which are entitled to the benefits of insurance and considered as an an attached agency of the Department of Finance? a. Development Bank of the Philippines (DBP) b. Landbank of the Philippines (LBP) c. Philippine Deposit Insurance Corporation (PDIC) d. Bangko Sentral ng Pilipinas (BSP)

2.

Under the amendment to PDIC Charter, may PDIC pay the insured deposits of a depositor without netting out depositor’s loan obligation with the closed bank? a. No because it will violate of the right to due process of the bank. b. No because it will violate the principles of legal compensation. c. Yes but only using the closed bank’s records alone. d. Yes even based on evidence of deposits and not on the closed bank’s records alone.

3.

May PDIC proceed directly to liquidation of a closed bank even without undergoing 90 -day receivership period? a. No because it is violative of right to property of the owners of the bank. b. No because it is violative of right to procedural due process of the owners of the bank. c. Yes because it would enhance the recovery rate for creditors of closed bank. d. Yes because it would result to further dissipation of assets of a closed bank.

4.

Which of the following deposits is not insured by PDIC? a. Savings Deposit b. Special Savings c. Negotiable Order of Withdrawal d. Certificate of Time Deposits e. Telegraphic notes or Telegram notes

5.

Which of the following is insured by PDIC? a. Demand or Checking account b. Investment in bonds issued by government c. Investment in stocks of a private corporation d. Trust account e. Money market placement

6.

Which of the following is insured by PDIC? a. Savings deposit b. Demand draft c. Telegraphic notes d. Telegram notes

7.

Which of the following deposits is not insured by PDIC? a. Savings Deposit in Metrobank Manila Branch b. Certificate of Time Deposit in Philippine National Bank Makati Branch c. Bank Deposit in Japan Bank Tokyo Branch d. Special Savings in Bank of Philippine Islands Taguig Branch

8.

Which of the following deposits is insured by PDIC? a. Deposit accounts that are funded b. Deposit accounts that are fictitious or fraudulent c. Deposit accounts constituting or emanating from unsafe or unsound business practices d. Deposit accounts that are determined to be proceeds from an unlawful activity as defined in AMLA

9.

What is the possible maximum deposit insurance coverage if a depositor has several valid single accounts in a closed bank? a. P1,000,000 b. P500,000 c. P750,000 d. P1,500,000

10. What is the possible maximum deposit insurance coverage if a depositor has several valid single accounts and valid joint accounts in a closed bank? a. P1,000,000 b. P500,000 c. P750,000 d. P1,500,000 11. Angel Locsin has the following four deposit accounts in a closed bank (BDO): Angel Locsin, Savings Deposit BDO-Lipa City branch Kim Domingo For the Account of Angel Locsin , Time Deposit BDO-Manila City branch Andrea Torres In Trust For Angel Locsin, Savings Deposit – BDO-Taguig City branch Angel Locsin’s Business (Sole Proprietorship) – Checking Account – BDO-Pasay City branch What is the maximum deposit insurance coverage by PDIC in so far as Angel Locsin is concerned? a. P1,000,000 b. P1,200,000

P200,000 100,000 300,000 600,000

c. d.

P500,000 P800,000

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12. Ellen Adarna has the following deposit accounts in a closed bank (BDO): Ellen Adarna and John Lloyd Cruz Savings Deposit BDO-Lipa City branch Ellen Adarna and Tom Cruz Time Deposit BDO-Manila City branch Ellen Adarna and Mark Cruz Checking Account – BDO-Pasay City branch What is the maximum deposit insurance coverage by PDIC in so far as Ellen Adarna is concerned? a. P1,000,000 b. P1,200,000 c. P500,000 d. P800,000

P600,000 800,000 900,000

13. Kim Domingo has the following deposit accounts in a closed bank (BDO): Kim Domingo’s Modeling Business (Sole Proprietorship) Checking Account – BDO-Pasay City branch Kim Domingo Savings Deposit – BDO-Taguig City branch Kim Domingo and John Santos Time Deposit BDO-Manila City branch Kim Domingo and Rey Langit Savings Deposit BDO-Lipa City branch What is the maximum deposit insurance coverage by PDIC in so far as Kim Domingo is concerned? a. P1,000,000 b. P1,200,000 c. P500,000 d. P800,000 14. Colleen Garcia has the following deposit accounts in a closed bank (BDO): Colleen Garcia’s Business (Sole Proprietorship) Checking Account – BDO-Pasay City branch Colleen Garcia Savings Deposit BDO-Taguig City branch Colleen Garcia and Billy Crawford Time Deposit BDO-Manila City branch Colleen Garcia and John Pedro and Rex Juan and James Reid Savings Deposit BDO-Lipa City branch What is the maximum deposit insurance coverage by PDIC in so far as Colleen Garcia is concerned? a. P1,000,000 b. P1,200,000 c. P500,000 d. P575,000

P300,000 400,000 600,000 800,000

P200,000 100,000 300,000 600,000

15. Ana is a partner of ABC Partnership. She is also a stockholder of Ana Corporation Ana has the following deposit accounts in a closed bank (BDO): Ana’s Business (Sole Proprietorship) Checking Account – BDO-Pasig City branch P350,000 Ana Savings Deposit BDO-Taguig City branch 400,000 Ana and Bea and Carla and Dana Time Deposit BDO-Manila City branch 600,000 Ana and ABC Partnership Checking Account – BDO-Pasay City branch 500,000 Ana and Ana Corporation Checking Account – BDO-Makati City branch 200,000 Ana’s loan payable to BDO – Quezon City Branch (100,000) What is the maximum deposit insurance coverage by PDIC in so far as Ana is concerned? a. P525,000 b. P625,000 c. P800,000 d. P1,000,000 16. A maintained the following deposits at BPI Bank: P600,000 – savings deposit in the name of A and/or B P200,000 – time deposit in the name ABC Partnership P300,000 – current account in the name of A How much can A personally recover from PDIC if BPI Bank was liquidated by BSP? a. P900,000 b. P600,000 c. P550,000 d. P300,000 17. In case of joint account between a juridical person and a natural person, who shall be entitled to the maximum insured deposit of P500,000 in such joint account? a. Juridical person b. Natural person c. Both juridical person and natural person equally d. Neither juridical person nor natural person 18. What is bank? a. b. c. d.

the prescriptive period for depositors to file their deposit insurance claims to PDIC from date of takeover by PDIC of a closed Within 2 years from PDIC’s takeover of the closed bank Within 1 years from PDIC’s takeover of the closed bank Within 3 years from PDIC’s takeover of the closed bank Within 4 years from PDIC’s takeover of the closed bank

19. As a general rule, what is the threshold amount of the bank deposit to be required to file deposit insurance claims to PDIC? a. Balance of more than P100,000 b. Balance of more than P10,000 c. Balance of more than P100 d. Balance of more than P1,000

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20. The following are the depositors who are required to file deposit insurance claims to PDIC in order to recover their claims from a closed bank, except a. Depositors with valid deposit accounts with balances of more than Php100,000. b. Depositors who have outstanding obligations with the closed bank regardless of amount of deposits. c. Depositors with account balances of less than Php100,000 who have no updated addresses in the bank records or who have not updated their addresses through the Mailing Address Update Form (MAUF) issued by the PDIC. d. Depositors who maintain their accounts under the name of business entities, regardless of type of account and account balance. e. Depositors with accounts not eligible for early payment, regardless of type of account and account balance per advice of PDIC. f. Depositors with account balances of less than Php100,000 who have updated addresses in the bank records or who have updated their addresses through the Mailing Address Update Form (MAUF) issued by the PDIC. 21. What is the mode of payment by PDIC of claims of depositors from a closed bank? a. By cash b. By making available to each depositor a transferred deposit in another insured bank in an amount equal to insured deposit of such depositor c. By checks, promissory note or bill of exchange d. Either A or B 22. What is the maximum period for payment by PDIC to depositors of their claims from a closed bank in order not to make PDIC’s officer liable for failure to pay due to grave abuse of discretion, gross negligence, bad faith or malice? a. Within 2 years from the date of filing of deposit insurance claim to PDIC b. Within 1 year from the date of filing of deposit insurance claim to PDIC c. Within 6 months from the date of filing of deposit insurance claim to PDIC d. Within 3 months from the date of filing of deposit insurance claim to PDIC 23. What is the effect of payment by PDIC of insured deposits to depositors? a. PDIC may recover from the assets of the closed in so far as the payment made by PDIC is beneficial to depositors. b. PDIC shall be legally subrogated to all rights of depositor against the closed bank to the extent of such payment. c. PDIC may not recover from the assets of the closed bank if the payment is without the knowledge or against the will of the closed bank. d. PDIC may only recover from the assets of the closed bank if the payment is with the consent of the closed bank. 24. Under Republic Act No. 1405, what is the nature of bank deposit and investment in government bonds? a. As a general rule, they are absolutely confidential in natur e. b. As a general rule, they are generally subject to any type of inspection. c. They are exempted from any type of inquiry. d. None of the above. 25. Under Republic Act No. 1405, the following instruments are considered absolutely confidential in nature, except a. Savings deposit b. Time deposit c. Current account or Demand account d. Investment in government bonds e. Money market placement or Telegraphic Notes or Telegram notes

26. They refer to money or funds placed with a bank that can be withdrawn on the depositor’s order or demand. a. Deposits b. Trust funds c. Money market placements d. Deposit substitutes 27. Under Republic Act No. 1405 a.k.a. Philippine Peso Deposit Secrecy Law, the bank deposits and investment in government bonds may be inquired into in the following exceptional instances, except a. Upon written permission or consent in writing by the depositor. b. In cases of impeachment of the President, Vice President, members of the Supreme Court, members of the Constitutional Commission (Commission on Elections, Civil Service Commission and Commission on Audit) and the Ombudsman for culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes or betrayal of public trust. (Art. XI, Sec. 2, 1987 Philippine Constitution) c. Upon order of a competent court in cases of bribery or dereliction of duty of public officials. d. In cases where the money deposited or invested is the subject matter of the litigation. e. In cases of tax evasion cases filed by BIR Commissioner against a taxpayer. 28. Which of the following inquiries will be considered a violation of Philippine Peso deposit secrecy law? a. Periodic inquiry or special examination of bank deposits by BSP to ensure compliance with the Anti-Money Laundering Law. b. Inquiry of bank deposits by BIR Commissioner in relation to an application for compromise of taxable liability or determination of a decedent’s gross estate under National Internal Revenue Code. c. Inquiry of bank deposits by PDIC when there is finding of unsafe or unsound banking practices. d. Inquiry of bank deposits by DOJ Secretary for the purpose of persecution of the members of the opposing political party. 29. Which of the following disclosures will be considered a violation of Philippine peso deposit secrecy law? a. Reporting of unclaimed balances of a bank deposit to the Treasurer of the Philippines or Bureau of Treasury by authorized bank officials. b. Using of insider information about the bank deposits by bank employees in order to determine the credit rating or credit standing of their depositors for purposes of offering credit cards. c. Turn-over by authorized bank officials to the BIR Commissioner of the amount in bank accounts as may be sufficient to satisfy the writ of garnishment issued to collect delinquent taxes. d. Disclosure by a bank officer or employee upon order of a competent court in connection with a deposit in a closed bank that was used in the perpetration of anomalies.

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30. A government employee, purchased DBP Bonds with a total value of P100,000 and receives annual interest income from his investment. Under Bank Secrecy Law, the investment of the government employee may be inquired into even without need of a court order by the a. Public prosecutor handling estafa case against the government employee b. BIR officer auditing the VAT of the government employee c. Credit investigator of a lending institution where the government employee applied for the loan d. None of the foregoing 31. Which act is covered by Domestic Bank Deposit Secrecy Law a.k.a. R.A. No. 1405? a. Disclosing the amount of deposit of a judgment debtor to the court sheriff who is executing a garnishment order against him. b. Disclosing the name of the drawer of a check to the payee. c. Disclosing the amount of deposit of a taxpayer to a duly authorized BIR examiner who is examining his income tax liability. d. Disclosing the amount of deposit exceeding P500,000 in one banking day to Anti-Money Laundering Council. 32. The following are the exceptional cases when the BIR Commissioner may inspect bank deposits, except a. When there is application of compromise liability by a taxpayer on the ground of financial incapacity b. To determine the gross estate for computation of estate tax’s liability c. When a request for tax information of specific18 taxpayers made by a foreign tax authority pursuant to a tax treaty under The Exchange of Information on Tax Matters Act of 2009 d. To determine the taxable income of politicians 33.

What is the penalty provided by law for violation of RA 1405 a.k.a. Philippine Peso deposit secrecy law? a. Imprisonment of not more than five years or fine of not more than P20,000 or both imprisonment and fine. b. Imprisonment of not more than ten years or fine of not more than P200,000 or both imprisonment and fine. c. Imprisonment of not more than twenty years or fine of not more than P2,000,000 or both imprisonment and fine. d. Imprisonment of not more than one year or fine of not more than P2,000 or both imprisonment and fine.

34. Under Foreign Currency Deposit Act of the Philippines or R.A. 6426, what is the only exception for the absolutely confidential nature of Foreign Currency Bank Deposits? a. Upon written permission or consent in writing by the depositor. b. In cases of impeachment of the President, Vice President, members of the Supreme Court, members of the Constitutional Commission (Commission on Elections, Civil Service Commission and Commission on Audit) and the Ombudsman for culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes or betrayal of public trust. (Art. XI, Sec. 2, 1987 Philippine Constitution) c. Upon order of a competent court in cases of bribery or dereliction of duty of public officials. d. In cases where the money deposited or invested is the subject matter of the litigation. 35. Which is false about Foreign Currency Deposit Act also known as R.A. No. 6426? a. The foreign currency deposits maintained abroad by Filipino citizens are not covered by the provisions of this act. b. Depositary banks which have been qualified by the Monetary Board to function under expanded foreign currency deposit system are exempt in maintain the fifteen percent (15%) foreign currency cover for their liabilities in the form of foreign currency deposit with BSP. c. Foreign currency deposits are of absolutely confidential nature, except upon the written permission of the depositor. d. Foreign currency deposits are subject to attachment, garnishment, or any other order or process of the court. 36. A non-resident alien was convicted beyond reasonable doubt of raping a minor. Such non-resident alien does not have any property in the Philippines except a foreign currency deposit with a domestic bank. May the court issue a writ of garnishment of the foreign currency deposit of that convicted non-resident alien? a. No because Foreign Currency Deposit Act of the Philippines provides that foreign currency deposits are exempted from attachment or garnishment. b. Yes but only if the non-resident alien will give his permission or consent in writing. c. Yes because if that foreign currency deposit will be exempted from garnishment, injustice would result especially to a citizen aggrieved by a foreign guest. d. No because foreign currency deposits are absolutely confidential in nature and making an exception to the confidentially of foreign currency deposits will discourage foreign investments. 37. What is the penalty provided by R.A. No. 6426 for violation of confidentiality of foreign currency deposit act of the Philippines? a. Imprisonment of not less than 1 year nor more than 5 years or fine not less than P5,000 but not more than P25,000 or both imprisonment and fine. b. Imprisonment of not less than 2 years nor more than 10 years or fine not less than P10,000 but not more than P50,000 or both imprisonment and fine. c. Imprisonment of not less than 3 years nor more than 15 years or fine not less than P20,000 but not more than P100,000 or both imprisonment and fine. d. Imprisonment of not less than 4 year nor more than 20 years or fine not less than P50,000 but not more than P500,000 or both imprisonment and fine. 38. Which type of bank deposit of impeachable officer may be examined by impeachment court without consent of the impeachable officer? a. Philippine Peso Bank Deposit b. Foreign Currency Bank Deposit c. Both A and B d. Neither A nor B 39. As a general rule, which type of bank deposit may not be subject to attachment, execution or garnishment? a. Philippine Peso Bank Deposit b. Foreign Currency Bank Deposit c. Both A and B d. Neither A nor B

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40. They include credits or deposits of money, bullion, security or other evidence of indebtedness of any kind, and interest thereon with banks in favor of any person known to be dead or who has not made further deposits or withdrawal during the preceding ten (10) years or more. a. Dormant accounts b. Unclaimed balances c. Dead accounts d. Closed deposits 41. Which of the following credits may is not covered by Unclaimed Balances Law? a. Credits of money b. Deposits of money c. Security of indebtedness d. Bond indenture or other evidence of indebtedness of any kind e. Telegraphic note or Telegram note f. Patent or copyright or trademark 42. Which of the following institutions is not covered by Act No. 3936 also known as unclaimed balances law? a. Banks b. Trust companies c. Mutual building and loan association d. Nonstock savings and loans association 43. Which government agency has the authority to reactivate an unclaimed balance account? a. Bureau of Internal Revenue b. Bureau of Customs c. Bureau of Treasury d. Bureau of Unclaimed Balance 44. What petition may be filed by the Office of Solicitor General in behalf of the Republic of the Philippines in orde...