BSP gives depositors more teeth against unfair banking practices

The Bangko Sentral ng Pilipinas has given depositors more teeth against unfair treatment from banks by issuing more stringent rules governing dormant accounts and domestic remittances.

"A monthly dormancy fee, not exceeding P30.00 can only be imposed if there is no deposit or withdrawal from the account for five years; if the deposit is below the minimum monthly average daily balance; and if the depository bank of NSSLA (non-stock savings and loans association) has complied with the notification requirements," the central bank said in an emailed statement.

Under the new rules approved by the BSP's policy-setting Monetary Board, banks are now required to notify owners of dormant accounts three times on the potential of the account to become dormant and before charging a dormancy fee, as well as the escheat of an account based on the Unclaimed Balances Act.

Escheat refers to the title transfer of financial assets such as bank deposits and unclaimed securities in accounts that have been dormant for a very long period of time to a state authority, according to Investopedia. "Institutions with such dormant accounts are required to make efforts – such as sending reminders and issuing notices in publications – to locate the owners of these assets before transferring title to the state under escheat."

"To comply with the notification requirements, a depositor must be notified through postal mail, courier delivery, email, telephone or other means at least 60 days before the deposit becomes dormant; and at least 60 days prior to the charging of dormancy fees," the central bank said.

Depositors must also be notified at least 60 days before a bank can start the process of transferring the unclaimed dormant deposits to the National Treasurer.

On retail banking and domestic remittances, the Monetary Board now requires that banks post the fees on retail deposit, remittance, and loan products or services on their official website and in conspicuous places in all branches.

Clients must be notified of any amendments to the terms and conditions of retail bank products or services. Banks must also send out additional individual notices to clients if the amendments will result in additional fees or charges.

"Clients are granted the opportunity to manifest objection to amendments to fees' terms and conditions and the right to exit the contract without penalty," the central bank said.

The Monetary Board also ordered banks to charge fees for domestic fund transfers only on the part of the sender, not on the recipient. This order voids the current practice of making both the sender and recipient of money transfers pay for the transaction.

"This enables determination of the exact amount to be received by the beneficiary and allows consumers to decide on the most cost-efficient means for remitting money," the BSP said.

The enhanced rules will take effect six months after publication in a newspaper of general circulation. — Jon Viktor Cabuenas/VDS, GMA News