The Philippine Deposit Insurance Corp. (PDIC) has issued the guidelines for its authority to conduct special bank examinations independent of the Bangko Sentral ng Pilipinas (BSP).

PDIC, under its new law, can examine banks to determine their overall financial condition and compliance with banking rules and regulations. Previously only the BSP’s Monetary Board can approve and authorize special examinations of banks.

Based on the PDIC Regulatory Issuance No. 2009-05, PDIC examiners will submit findings to the PDIC Board for “appropriate action” for example if there is evidence of unsafe and unsound banking practices. The same report will be forwarded to the BSP in case there is a need for a joint examination.

“However, PDIC findings with respect to violation and/or compliance with PDIC issuances, rules and regulations will be independently acted upon by the PDIC Board,” the deposit insurer said.

PDIC also has authority to examine banks deposit accounts. “PDIC may inquire into or examine deposit accounts and all information and documents related thereto, in case there is a finding by the PDIC or the BSP of unsafe or unsound banking practice,” the agency said.

PDIC is authorized to conduct both regular and special examinations of banks.

The latter is an examination conducted at any time in coordination with the BSP, by an affirmative vote of a majority of all the members of the PDIC Board without need of prior Monetary Board approval, if there is a threatened or impending bank closure as determined by the PDIC Board. In the meantime a regular examination would need Monetary Board approval.

In the event that there is a finding of unsafe and unsound banking practice, PDIC is authorized to examine deposits, as an exemption from Republic Act 1405 or the Bank Secrecy law. This will give PDIC timely access to bank records and help manage risks to the deposit insurance fund.