MANILA, Philippines — Nowadays, many people are asking questions about the so-called bank fees being imposed on dormant savings and/or demand deposit accounts.

One may ask: What are dormant accounts? Under the regulations promulgated by the Bangko Sentral ng Pilipinas (BSP), dormant or inactive accounts are: (1) current or checking accounts showing no activity (deposit or withdrawal) for a period of one (1) year; and (2) savings account showing no activity (deposit or withdrawals) for a period of two (2) years.

As a general rule, banks do not impose fees on dormant accounts. Under BSP regulations, bank fees are imposed on dormant accounts only in one situation – when the balances of the dormant accounts (be it savings or current accounts), fall below the required minimum Average Daily Balance (ADB) subject to the following conditions:

“A) The imposition of such charges or fees is clearly stated among the terms and conditions of the deposit;

“B) The rate or amount of such charges or fees is properly disclosed among the terms and conditions of the deposit;

“C) The deposit account balances have fallen below the required minimum monthly ADB for dormant accounts and for at least two (2) consecutive months for active accounts;

“D) The required minimum monthly ADB of deposits are properly disclosed among the terms and conditions of the deposit;

“E) In the case of charges and fees for dormant accounts or dormancy fee, the period of dormancy as prescribed under BSP regulations shall be properly disclosed among the terms and conditions of the deposit, and that the depositors shall be informed by registered mail with return card on his last known address at least sixty (60) days prior to the imposition of dormancy fee.”

F) To comply with the Due Notice Requirement in case of amendments to the terms and conditions for the imposition of service charges or fees as follows: “Any change in the terms and conditions for the imposition of service charges and/or maintenance fees, e.g., increase in the amount of such charges and fees or increase in the required minimum monthly ADB of deposits, shall take effect only after due notice to the depositor: Provided, That information by regular mail, Statement of Account messages, electronic mail, courier delivery and/or other alternative modes of communication on the depositor’s last known address at least sixty (60) days prior to implementation shall be considered sufficient notice: Provided, Further, that failure of the depositor to manifest or register his objection to the new service charges and maintenance fees or any change in their terms and conditions in writing within thirty (30) days from receipt of written notice of amendment shall be deemed to constitute acceptance of such changes, for purposes of this subsection.

“Banks shall likewise post said information on their respective websites, Automated Teller Machine (ATM) on-screen messages, and in conspicuous places within the bank premises and other places near the bank’s own ATM at least sixty (60) days prior to implementation.”

(Hence, the urgency that depositors read carefully the terms and conditions printed in the passbooks. Considering too, that banks impose different minimum deposits to be maintained.)

In the event that some banks commit an “erroneous interpretation and application” (to use the words of BSP) of the foregoing rules on dormant account, the BSP directs the banks “to reverse or credit back the amount of such charges to the respective deposit accounts that meet the required monthly ADB, within three (3) months from the date of this Memorandum. Depositors whose accounts were erroneously charged with these fees since the effectivity of Circular No. 485 (June 23, 2005) but whose deposit accounts have since been closed shall likewise be given appropriate notices sent to their last known mailing address. Notices on the proper interpretation of the regulations on the imposition of service charges and maintenance fees on deposit accounts shall likewise be posted in conspicuous place within the premises of all banks.” (BSP Memorandum No. M-2011-030 dated June 3, 2011)

Depositors of dormant accounts should therefore examine regularly their savings account bankbooks and Statement of Accounts of their Checking Accounts and verify if there are dormancy fees levied on their accounts. If there are, the depositors should check that the conditions A to F listed in this article have been complied with. Otherwise the fees being charged are unauthorized.

Finally, we, bank depositors have to be reminded of the so-called Unclaimed Balances Law (Act 3936, as amended) which mandates banks, building and loan associations and trust corporation to report under oath to the Treasurer of the Philippines all their deposit balances which remain unclaimed for ten (10) years or more.

The latest report on the dormant fees being imposed by banks is that there are two (2) pending bills in the House of Representatives which propose the abolition of fees and charges for deposit accounts that are dormant.

Have a joyful day!