House panel approves bill lifting bank secrecy
THE HOUSE Committee on Banks and Financial Intermediaries approved a bill calling for the partial lifting of the Bank Secrecy Law, which will include a provision to protect financial institutions from cases or suits in connection with deposit examinations.
House Committee on Banks and Financial Intermediaries Chairperson Junie E. Cua said in a phone interview with BusinessWorld on Sunday that the committee report was approved on Friday and is up for review by the Committee on Rules.
“The committee report was already approved…and we included the ‘safe harbor clause’,” Mr. Cua said.
If enacted, the bill will give the Bangko Sentral ng Pilipinas (BSP) authority to access bank accounts for investigative purposes. The safe harbor provision was requested by the banking industry to protect them from possible civil liability resulting from the BSP’s examination of their clients’ deposits.
“Only those accounts of people suspected of fraudulent activities will be examined,” Mr. Cua added.
He said the BSP examination is limited to bank officials, bank employees, and related parties where fraud is committed. The approval of the BSP Monetary Board will also be needed before an examination is conducted.
“This is limited to a few because we cannot afford to have a crippling effect to the public,” Mr. Cua said, adding this was one of the initial concerns about the proposal to amend the Bank Secrecy Law.
Both the World Bank and International Monetary Fund in past reports recommended that the Philippines lift its stringent Bank Secrecy law, which is more than half a century old. The law prohibits inquiry into deposits due to their confidential nature.
The BSP also recommended the “narrow” lifting of the law to prevent erring bank personnel from using it as a shield in doing anomalous activities within banking institutions. — G.M. Cortez