Bill prohibit banks from imposing service charge on accounts below maintaining balance

January 19, 2014 12:54 pm 

MANILA, Jan. 19 –A lawmaker has filed a measure prohibiting any bank, whether government-owned/controlled or private, local or foreign, to impose service charge or any other fees on savings or current accounts which do not comply with the required minimum maintaining balance set by the bank policies.

Rep. Edgar Erice (2nd District, Caloocan City) said House Bill 3162 seeks to protect depositors who have very limited resources from being penalized for having substantially lesser money to deposit.

“It cannot be overemphasized that the regulation authorizing banks to impose and collect service and maintenance fees on savings and demand deposit accounts that fall below the required minimum maintaining balance is antithetical to the State’s policy of encouraging the public to save in banks to enable them to generate capital resources,” Erice said.

Section 263 of the Manual of Regulations for Banks issued by the Bangko Sentral ng Pilipinas (BSP) provides that banks are authorized to impose and collect service and maintenance fees on savings and demand deposit accounts, whether active or dormant, that fall below the required minimum monthly average daily balance subject to several conditions.

Erice said pursuant to the provision stated in the Manual, majority of the banks, made sure that the imposition of such fees is clearly provided in the terms and conditions of deposit furnished to their clients to be able to validly cause the deduction and collection of the same.

“Contrary to the original objective of encouraging the public to deposit their money in banks, those who have very limited resources would inevitably have second thoughts in depositing their money knowing that if they failed to comply with the required minimum maintaining balance, their limited financial resources would, instead of earning interest, be considerably lessened due to the penalties imposed by the banks,” Erice stressed.

Erice pointed out that the moneys deposited by the people with very limited resources, no matter how meager they are in the eyes of the banks, still serve their purpose of contributing to the capital resources of the country and not entirely worthless.

“These depositors do not deserve to be penalized for having substantially lesser money to deposit lest they would be tempted to completely pull out their money from the banks. If this would happen in a large scale, its adverse effect on the business of the banks and on the State ‘s policy of generating capital resources for the development of national economy cannot simply be overlooked,” Erice said.

Under the measure, a penalty of P5,000,000 and six years imprisonment or both shall be imposed on banks that violate the provision of this Act.

Likewise, the bank’s license to operate shall be cancelled and shall be perpetually disqualified from applying for the same.

The BSP in coordination with the Department of Finance (DOF) is directed to implement the rules and regulations of this Act.(PNA)

PDS/HOUSE OF REPRESENTATIVES-PR/PJN

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