Amendments to the Regulations Governing Fees on Retail Bank Products/Services and Dormant Deposit Accounts

EIANOKO SENTNIL NG PILIPINAS OFFICE OF THE GOVERNOR . Circular No.-929- Series of 2016 subject: Amendments to the Regulations Governing Fees on Retail Bank Products/Services and Dormant Deposit Accounts ' pursuant to Monetary Board Resolution No. 1748 dated 29 September 2016, the provisions of the Manual of Regulations for Banks (MoRB) and the Manual of Regulations for Non-Bank Financial lnstitutions (MORNBFI) are hereby amended as follows: Section 1. The provisions under Section X263 of the MORB on the imposition of service and maintenance fees on deposit accounts are hereby amended as follows: .,Sec. X263 Fees on retail bank products/services. Pursuant to the consumer protection principle of fair treatment, a bank's board of directors shall adopt a policy on the imposition of any fee on its retail products/services. The policy shall cite the basis for the imposition of fees and rationalize the fee structure/amount' 9 X263.1 Fees on dePosit occounts a. Mointenonce Fee. Banks may impose maintenance fees on a deposit account, whether active or dormant, subject to the following conditions: (1) The required minimum monthly average daily balance (ADB), as we|] as the imposition and the rate/amount of maintenance fee, are properly disclosed among the terms and conditions of the deposiq (2) The deposit account balance has fallen below the required minimum monthly ADB for at least two (2) consecutive months; and (3) Banks must ensure that clients are notified of any change intherequiredminimummonth|yADBandamountof dormancy fee at least sixty (60) days prior to implementation. b. Dormoncy Fee.. Banks may only impose dormancy fee on a dormant deposit account five (5) years after the last activity therein, Provided that:

(1) The balance falls below the minimum monthly ADB, if any; (2) The monthly dormancy fee shall not exceed thirty pesos (P30.00); and (3) The bank complied with the two (2) notice requirement underltemnumbers"T'b'(2)and7'b'(4/"'AppendixLLZ' prior to the charging of dormancy fees' g x263.2 Fees on domestic remittance transactions' In case of are charged domestic remittance transactions, all fees to the transaction to upfront from the sender/remitter's end, with appropriate disclosure This the sender/ remitter of the components of the fees being charged' does not preclude the bank and/or other participants to the domestic remittance remittance transaction from charging service fees. Domestic transaction , for this purpose, is a transfer of funds between a or sender/remitter and a beneficiary who are both within the Philippines, between two accounts within the Philippines"' post s x263.3 Additionot Disclosure Requirements. Banks shall fees/charges in readable font size at the following places: a. Automated Teller Machine (ATM) transaction fees at the ATM's on-screen messages; and b. Fees and charges on all retail bank products/services such as deposit, remittance and loan, on the bank,s officia| website and at a conspicuous place within the premises of all banking units. 9 X263.4. Amendments to Terms ond conditions of Retoil Bank Products qnd Seruices. Clients should be notified at least sixty (60) days prior to implementation of any amendments to the terms and conditions of retail bank products and services by public notice. Public notice may take the form of posting in public places, such as the bank's official all banking websites and/or at a conspicuous place within the premises of units. changes in depoiit interest rate, however, may be immediately effected after the Public notice' Complementary individual notices to a client shall be sent if the on the amendments pertain to or will result to fees to be paid or charged account of the client.

clients who do not agree with the new/revised terms and conditions have the right to exit the contract without penalty: Provided' That such right is exercised within thirty (30) days from receipt of individual notice or thirty (30) days from issuance of public notice'" g X263.5. tndividual Notifications. lndividual notifications shall be number sent to the client's last known postal address/ email address/ contact mail, text either through postal or registered mail, courier delivery, electronic messages, telephone calls or other alternative modes of communication, as may be elected bY the client. g X263.6 Non-Woiver by Controctual Provisions. The provisions of provisions in the subsec.X253.4 shall apply, notwithstanding any contrary terms and conditions." section 2. ltems 3, 6 and 7, Appendix LL2 of the MoRB on the internal control procedures for dormant accounts is hereby amended to read as follows: "xxx 3. toint custodY xxx xxx f. Dormant deposit ledgers/EDP print-outs and corresponding xxx signature cards including on-line posting of dormant accounts; xxx 6. Confrrmotion of accounts xxx xxx b. Deposit account balances particularly new deposit accounts, dormant accounts and closed accounts,'xxx xxx 7. lnternol control procedures for dormont occounts a. Definition of dormant accounts (1) Current or checking accounts showing no deposit or withdrawal for a period of one (1) Year. (2) Savings account showing no deposit or withdrawal for a period of two (2)Years. b. tnternol control meosures (1) As a matter of policy, banks shall exert all efforts to prevent deposit accounts from becoming dormant' (2) When an account is about to become dormant, the depositor shall (60) days prior to be notified of its potential dormancy at least sixty the commencement of the dormancy period' The notification shall contain the following information:

(a) The effect of dormancy to transfer the account from active to dormant status, and advice on how to reactivate the accounU and (b) Reminder that the dormant account will be included in the list of unclaimed balances to be submitted to the Treasurer of the Philippines (Treasurer) for escheat in accordance with the Unclaimed Balances Act, if said account has no activity for ten (10) years' (3) The bank shall adopt appropriate internal control measures to ensure that alltransactions affecting dormant deposit accounts are legitimate. (4) When an account is about to be subject to dormancy fee, the depositor shall be notified at least sixty (60) days prior to such imposition. (5) For unclaimed dormant deposit accounts considered for escheat, the depositor of such account shall be notified at least sixty (60) days prior to the filing by the bank of the sworn statement to the Treasurer pursuant to the Unclaimed Balances Act' (6) Banks shall permanently retain records of escheated deposits, together with proof of all the relevant notices. For the purpose of this item, records of escheat shall refer to the sworn statement of the bank to the Treasurer regarding the unclaimed balances, and the court order declaring that said unclaimed balances have been escheated to the Government of the Republic of the Philippines and commanding the bank to forthwith deposit the same with the Treasurer. Relevant notices to be retained shall include copies of the notices referred to in items (2), (4)and (5) of ltem "7.b." (7) Individual notifications shall be sent to the client's last known postal address/ email address/ contact number either through postal or registered mail, courier delivery, electronic mail, text messages, telephone calls or other alternative modes of communication, as may be elected by the clieht' (8) The provisions of ltems "2, 4, 5 ond 6 of ltem "7.b" shall apply, notwithstanding any contrary provisions in the terms and conditions." section 3. section 42095 of the MoRNBFI on the dormant savings deposits held by non-stock savings and loans associations (NSSLAs) is hereby amended to read as follows: ,,Sec. 42095 Dormant Savings Deposits. Savings deposit shall be classified as dormant if no deposit or withdrawal has been made for the last two (2)

years. A monthiy dormancy fee, not exceeding thirty pesos (P30.00), may only be imposed five years after the last activity, provided the NSSLA notified its member of the dormancy and the possible imposition of a dormancy fee at least sixty (50) days prior to the: (1) dormancY of the accounU and (2) imPosition of the fee. lndividual notifications shall be sent to the client's last known postal address/ email address/ contact number either through postal or registered mail, courier delivery, electronic mail, text messages, telephone calls or other alternative modes of communication, as may be elected by the client" Section 4. Effectivity - The following provisions shall be included as footnote to section X263 of the MoRB, ltem 7, Appendix LL2 of the MoRB and section 4209s of the MoRNBFI, as follows: "Sec. X253 Fees on retail bank products/serviceFNl xxx FNz Appendix 112 xxx 7. Internal control procedures for dormant accounts xxx FNl xxx Sec. 42095 Dormant Savings Deposits. Effective 1g0 days from publication date of the Circular in a newspaper of FN1 general circulation. FNz The requirement for additional notification prior to escheat under ltem "7.b.(5)" and permanent record retention of escheated accounts under ltem "7.b.(6)"shall be effective fifteen (15) days from publication in a newspaper of general circulation. All other provisions shali be effective 180 days from publication of the Circular in a newspaper of general circulation." FORTHE MONETARY BOARD: I AMAN/. Ytffil/_ r R' I,;llll'"co' 24 o.tou er 2oL6