BANKS ‘NET-OUT’ SCHEME NO LONGER VALID – PDIC

DEBTS of depositors will no longer be deducted from their total deposits in the computation of a closed bank’s insured deposits, the Philippine Deposit Insurance Corp. ( PDIC) announced on Tuesday.

“Pursuant to Republic Act 10846 further amending Republic Act (RA) 3591, which became effective on 11 June 2016, the obligations of a depositor are no longer netted out from his/her total deposits in the closed bank for purposes of computing insured deposit,” it said in a statement.

RA 10846 amended the charter of the state-run deposit insurer to make it easier to liquidate closed banks.

“By reason thereof, PDIC Regulatory Issuance ( RI) 201104 on Rules on Net Out of Obligations to Determine Insured Deposits, and all related issuances and bulletins, have been rendered of no force and effect, and of no further application,” PDIC said.

According to the old rule, for purposes of computing insured deposits, all obligations of a depositor with the closed bank, as of bank closure, shall be deducted from the depositor’s total deposits with the bank.

This “net out” scheme is solely for the purpose of determining the net deposit covered by PDIC’s deposit insurance and does not constitute payment for any of the obligations of the depositor.

The PDIC said that effective immediately, all banks are directed to discontinue the posting of RI 2011-04 within their premises.