JAN.

19, 2014

NR # 3351

Bill prohibit banks from imposing service charge on accounts below maintaining balance
A lawmaker has filed a measure prohibiting any bank, whether governmentowned/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 !nd "istrict, #aloocan #ity$ said %ouse &ill '()! seeks to protect depositors who have very limited resources from being penali*ed for having substantially lesser money to deposit. +,t cannot be overemphasi*ed that the regulation authori*ing 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 -tate.s policy of encouraging the public to save in banks to enable them to generate capital resources,/ Erice said. -ection !)' of the 0anual of Regulations for &anks issued by the Bangko Sentral ng Pilipinas &-1$ provides that banks are authori*ed 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 sub2ect to several conditions. Erice said pursuant to the provision stated in the 0anual, ma2ority 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. +#ontrary to the original ob2ective 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. +3hese depositors do not deserve to be penali*ed for having substantially lesser money to deposit lest they would be tempted to completely pull out their money from the

banks. ,f this would happen in a large scale, its adverse effect on the business of the banks and on the -tate 4s policy of generating capital resources for the development of national economy cannot simply be overlooked,/ Erice said. 5nder the measure, a penalty of 16,777,777 and si8 years imprisonment or both shall be imposed on banks that violate the provision of this Act. 9ikewise, the bank.s license to operate shall be cancelled and shall be perpetually disqualified from applying for the same. 3he &-1 in coordination with the "epartment of :inance ";:$ is directed to implement the rules and regulations of this Act. '7$ lvc