THE SENATE late on Monday unanimously approved on third and final reading a bill on the revised charter of the Philippine Deposit Insurance Corp. (PDIC) that would increase coverage and the eligibility of institutions.

With 23 affirmative votes, Senate Bill 2365 or an act amending sections 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 18, 22, 24, 26, and 28 of Republic Act 3591 or the PDIC charter was passed on third and final reading.

The bill makes PDIC an attached agency of the Bangko Sentral ng Pilipinas (BSP) rather than the Department of Finance.

Under the third reading copy of the bill, the board of directors will now have the authority to establish separate insurance funds and insurance arrangements or structures, taking into consideration Islamic banks.

The board may also raise the maximum amount of deposit insurance coverage to an amount indexed to inflation or in consideration of other economic indicators. They will review this every three years and increase as needed.

As specified in the definition of terms, certain products or arrangements of Islamic banks will now be deemed as deposits by the BSP.

The assessment of member banks will be determined by the board of directors provided that it will not exceed one-fifth of 1% per annum. The board will also establish a risk-based assessment system and impose a commensurate risk-based adjusted rate per annum per bank to ensure the sustainability of the corporation while rationalizing the financial burden on lenders.

The assessment of each insured bank will be determined by multiplying the adjusted annual assessment rate with the assessment base, but in no case should the assessment be less than P5,000 in words and figures.

Based on the bill, the board may establish a risk-based assessment system and rate that does not exceed two-fifths of 1% per annum multiplied by the assessment base. The semi-annual assessment for each insured bank was to be calculated from one-half of the assessment rate multiplied by the assessment base, noting still the P5,000 limit.

The assessment base will be the amount of the liability of the bank for deposits based on the total sum insured of the bank. In case there is an increase in maximum insured deposit, the PDIC board will have the authority to adjust the assessment rate for banks.

PDIC must also examine records and account books, and require information and reports from depository institutions if there are findings of fraud or unsafe banking related to deposit-taking.

Meanwhile, bank liquidation involving the purchase of all assets and assumption of all liabilities of a bank to a third party will be exempt from the Bulk Sales law or Republic Act 3952. — A.N.O. Tan