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Communicating with Depositors ELIZABETH E. OLLER Vice President, Claims Group Philippine Deposit Insurance Corporation.

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Presentation on theme: "Communicating with Depositors ELIZABETH E. OLLER Vice President, Claims Group Philippine Deposit Insurance Corporation."— Presentation transcript:

1 Communicating with Depositors ELIZABETH E. OLLER Vice President, Claims Group Philippine Deposit Insurance Corporation

2 2 Outline of Presentation IPDIC at a Glance IIOverview of PDIC as Deposit Insurer IIICompliance to Core Principle No. 17 Reimbursing Depositor IVCommunication Strategy for Reimbursing Depositor VHandling Queries, Requests, Complaints VICommunicating with the General Public

3 3 PDIC at a Glance A government instrumentality attached to the Department of Finance Created on 22 June 1963 by virtue of Republic Act 3591 One of the oldest deposit insurers in the world

4 4 PDIC at a Glance 1. Depositor Protection Public Policy Objectives To promote and safeguard the interests of the depositing public by way of providing permanent and continuing insurance coverage on all insured deposits. 2. Financial Stability To strengthen the mandatory deposit insurance coverage system to generate, preserve, and maintain faith and confidence in the country’s banking system, and protect it from illegal schemes and machinations. (Section 1, Republic Act 3591, as amended)

5 5 PDIC at a Glance PDIC Mandates (Section 1, Republic Act 3591, as amended) As DEPOSIT INSURER The Corporation provides deposit insurance of up to P500,000, the maximum insurance coverage. Member-banks are assessed annually at a flat rate of 1/5 of 1% of their total deposit liabilities. The assessments are collected from member-banks semi-annually and form part of PDIC’s Deposit Insurance Fund.

6 6 PDIC at a Glance PDIC Mandates (Section 1, Republic Act 3591, as amended) Examination of banks, grants of financial assistance and conducts of bank investigation to contribute in the promotion of public confidence and financial stability in the economy As Co-REGULATOR As RECEIVER/ LIQUIDATOR of Closed Banks Implementation of closure orders of the Monetary Board and preservation and administration and disposal of assets of closed banks for the benefit of its depositors and creditors

7 7 Overview of PDIC As Deposit Insurer (Sections 14 and 16, Republic Act 3591, as amended) To settle insurance claims of depositors in accordance with provision of the PDIC Charter Settlement of Claims “xxx as soon as possible xxx” or within 6 months (180 days) from date of filing except if the validity of the claim requires resolution of issues by another office/agency 2 years after bank takeover Filing of Claims Filing of Claims Enforcement of Claims 2 years after the 2-year period of filing of claims

8 8 (Sections 14 and 16, Republic Act 3591, as amended) To settle insurance claims of depositors in accordance with provision of the PDIC Charter Accountability of PDIC Failure to settle the claim within 6 months from the date of filing due to abuse of discretion, gross negligence, bad faith, or malice may subject the directors, officers or employees to imprisonment from 6 months to 1 year Notification Requirement Letter notices to all depositors and Publication of bank closure & prescriptive date of filing 3 consecutive weeks in a newspaper of general circulation &/or community newspaper Overview of PDIC As Deposit Insurer

9 9 Corporate Target to Reimburse Depositors 1Start of PayoutBaseline target of 30 days 2Completion ofTarget range based on payment Size of closed bank Number and complexity of deposit accounts Overview of PDIC As Deposit Insurer

10 10 Corporate Target for 2013 For accounts with balances of ≤ P15,000 - Waived Filing of Claims (benefits at least 76% of total depositors) Banks with ≤ 20 branches 18 days Banks with > 20 branches 28 days For accounts with balances of > P15,000 -Filing of Claims Banks with ≤ 20 branches 30 days Banks with > 20 branches 60 days Overview of PDIC As Deposit Insurer

11 The Philippine Banking System 11

12 12 Overview of PDIC As Deposit Insurer 1970 to 2013 (October) YearBanks INSURED DEPOSIT PAID (Amount in Millions) AccountsAmount (P)Amount (US$) 1970 – , – ,004,4833, – ,2578, – ,43130, – ,62216, (Jan. to Oct.) 1551,0571,89044 Total649 2,299,05560,7091, : 10k 1978: 15k 1984: 40k 1992: 100k 2004: 250k 2009: 500k Bank Closures

13 13 Corporate Milestones on Claims Management 2009:Maximum Insurance Coverage increased from P250,000 to P500, : ISO Certification 9001:2008 awarded for the Quality Management System on Claims Settlement Operations : Automatic payment of small depositors (with balances of P5,000 and below) : Adoption of alternative payment schemes for deposit insurance claims (Postal Money Order, Cash Card and Cash Over the Counter) 2011 : Passed the ISO 9001: st surveillance audit : Increased the coverage of deposits for automatic payment from P5,000 to P10,000

14 14 Corporate Milestones on Claims Management 2012:Passed the ISO 9001:2008 2nd surveillance audit :Increased the coverage of deposits for automatic from P10,000 to P15,000 :Adoption of a New Claims System :Pilot Test Project Management as an approach to Claims Settlement Operations :Measure degree of compliance with 18 Core Principles 2013:Renewed and passed ISO Certification 9001:2008 :Conduct of Self-assessment of Compliance to 18 CPs And External Validation :Stronger Public Assistance :Adoption of the Project Management Approach

15 15 Results of Project Management Approach

16 16 Continual Improvement of PDIC Quality Management System for Claims Operations Depositors, Banks, Other Stakeholder Public Awareness/Communications Strategy PDIC Roadmap to 2016

17 17 Compliance to Core Principle No. 17 Reimbursing Depositors Core Principle & CriteriaPDIC Programs 1.Prompt Access to Deposit Insurance Mandate Corporate Target - 6 months - Less than 30 days 2.Clear Time Frame for Reimbursing Depositor Communication Strategies Public announcements -newspaper, TV, radio Publication of Notice to Depositors On-site closed bank’s information and assistance Conduct of Depositors’ Forum Posters and advisories at bank premises and public places

18 18 Compliance to Core Principle No. 17 Reimbursing Depositors Core Principle & CriteriaPDIC Programs 3. FundingFund Sources - Permanent Insurance Fund - Access to other sources of funds Borrowing Issuance of bonds, debenture & other obligations

19 19 Compliance to Core Principle No. 17 Reimbursing Depositors Core Principle & CriteriaPDIC Programs 4.Modes of Claims Payment Scheme -Direct Settlement Release by PDIC Claims Payment Agent over the counter in cash or cheque -Transfer Deposits Depositor/claimant goes to transferee bank to collect payment -Postal Money Order (PMO) Philippine Postal Corporation’s PMO used to service depositors with account balances of P15,000 and below

20 20 Compliance to Core Principle No. 17 Reimbursing Depositors Core Principle & CriteriaPDIC Programs 4.Modes of Claims Payment Alternative Payment Scheme -Cash Card for accounts with balances of P5,000 to P100,000 The depositors using the cash card used as a mode of payment of deposit insurance may be able to withdraw from more than 800 LBP ATMs nationwide and in ATMs of member banks of major bank networks -Cash Over The Counter for insurance claims payments up to MDIC of P500,000

21 21 Compliance to Core Principle No. 17 Reimbursing Depositors Core Principle & CriteriaPDIC Programs 5.Information Technology IT Infrastructure -Web-enabled application -Centralized database installed in the Home Office -Accessible to system users in Home Office and field offices around the Philippines -Integrated modules for Masterlist of Deposit Liabilities, Examination/Register generation and Claims Settlement Operations

22 22 Compliance to Core Principle No. 17 Reimbursing Depositors Core Principle & CriteriaPDIC Programs 6. Contingency PlanCritical Resources -Participated in Financial Crisis Simulation Exercise with other safety net player in Alternative Methods of Claims Payout -Different modes of claims payment -Advance/Interim Insurance Payout -Emergency Payment Facility -Support departments/ mechanism in placed -Manpower Outsourcing -Outsourcing of Selected Functions to Auditing Firm -Equipment rental/lease

23 23 Compliance to Core Principle No. 17 Reimbursing Depositors Core Principle & CriteriaPDIC Programs 7.Mechanism for Anticipatory Information Access to deposit data prior to bank closure -Bank Secrecy Law but with Special Exam Power (Section 8 of Charter) -Threatened or impending closure of a bank -Unsafe & unsound banking practice -Infrastructure for bank performance monitoring Offsite Bank Ratio Model -Regulatory Issuance on Banks’ Records Keeping -Financial Modeling Project (Stress Testing & Bank Failure Prediction Model)

24 24 8.Communication Strategy for Reimbursing Depositors

25 Issuance of 3 Press Statements Information Bank Closure o Name of Bank o Monetary Board Resolution number and date o Bank Owners o Head Office location and Number of banking units o Number of Bank Accounts o Coverage and Total insured deposits o Assurance from PDIC that all valid claims shall be paid up to a maximum of PHP500,000 (USD12,255) o Schedule and venue of Depositors-Borrowers Forums o Deadline for small depositors to update mailing address o Date the PDIC will start mailing of payments to small depositors o Target date to start Claims Settlement Operations o PDIC contact details Mailing of payment for small depositors (balances of PHP15,000 and below) o Number of accounts covered o Payment scheme information o PDIC contact details Payout o Schedule of claims settlement operations o Deposit insurance claims procedure o Requirements o Information on filing claims o PDIC contact details Press Statements 25

26 26 Press Statements

27 Frontline depositor assistance 27 First Phase: Takeover Distribution of control numbers Depositors / borrowers forum Courtesy call with local government units Information dissemination

28 First Phase: Takeover Entertain queries Pacify irate depositors/clients 28 FRONTLINE DEPOSITOR ASSISTANCE Inform depositors of basic requirements in filing claim, schedule of depositors’ forum and claim settlement Distribute forms

29 First Phase: Takeover Assist depositors in filling up forms 29 FRONTLINE DEPOSITOR ASSISTANCE Receive duly accomplished Mailing Address Update Form for depositors not required to file deposit insurance claims Client Monitoring of depositor/borrower concerns

30 First Phase: Takeover Courtesy call / attend LGU meetings 30 COURTESY CALL WITH LOCAL GOVERNMENT UNITS Coordinate with local leaders and civic organizations

31 First Phase: Takeover Post notices 31 INFORMATION DISSEMINATION Press releases to local media, place paid advertisements if necessary Call / text depositors PAD personnel visit barangays when necessary

32 First Phase: Takeover 32 DEPOSITORS / BORROWERS FORUM TOPICS DISCUSSED Role of PDIC as Receiver / Insurer / Liquidator Application of the maximum deposit insurance coverage Settlement of Loan obligations Audio-visual presentation Steps/procedures in filing a claim Who are required to file, when, where Mode of PDIC payment How to fill-up Claim Form

33 First Phase: Takeover That PDIC will pay valid deposit insurance claims That PDIC is doing its best to process claims expeditiously That PDIC ensures that the right amount of deposit is paid to the right depositor 33 DEPOSITORS / BORROWERS FORUM CORE MESSAGE Q & A

34 First Phase: Takeover Control numbers are preferably distributed in venues other than bank premises 34 DISTRIBUTION OF CONTROL NUMBERS

35 Distribute queuing numbers 35 Assist the elderly and persons with disabilities DEPOSITOR ASSISTANCE Second Phase: Claims Settlement

36 36 Inform claimants of the procedures adopted during payout When necessary, assist claimants in filling up forms and check completeness of basic requirements DEPOSITOR ASSISTANCE Second Phase: Claims Settlement

37 Home Office Complementary Activities 37 PUBLIC ASSISTANCE DEPARTMENT Responds to Queries, Requests, Complaints Client Feedback Survey

38 38 Call Center with Toll Free Number Home Office Complementary Activities

39 39 PAD Helpdesk s / letters Home Office Complementary Activities

40 40 Client Feedback Survey Home Office Complementary Activities

41 41 Queries, Requests, Complaints January to October 2013

42 42 Client Feedback Survey October 2012 to October 2013 (Average) OFFICES/FACILITIES 1 – Cleanliness 2 – Accessibility 3 – Complementary Services 4 – Ventilation and Lighting SYSTEMS/PROCEDURES 5- Clarity (Filing of Claims) 6- Clarity (Complying w/ Requirements) 7 – Promptness of Service 8 – Hassle-free processing of docs PERSONNEL 9 – Courtesy 10- Competence 11- Efficiency 12-Proper and Pleasing Appearance 13- Ability to Communicate 14 – Overall Quality of Service

43 43 Communicating with the General Public An Ongoing Concern To build public confidence in deposit insurance system

44 44 PDIC Public Awareness Program (PAP) PDIC Public Awareness Program Objectives : To raise the level of public awareness on PDIC and the deposit insurance system; and To sustain the level of satisfaction of depositors serviced during claims settlement operations

45 45 The website [www.pdic.gov.ph] provides information about PDIC and its programs. Public Awareness Program CORPORATE WEBSITE

46 46 Public Awareness Program CORPORATE WEBSITE The website [www.pdic.gov.ph] provides information on the waited average interest rate (WAIR) on time deposits of all commercial banks, promoting safe banking practices..

47 47 Be a Wise Saver (BAWS Campaign) FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC Public Awareness Program Local Government Employee Students

48 48 Public Awareness Program FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC TOOLSFLYERS and POSTERS INFO DISSEMINATION METHODOLOGIES  PDIC – organized Be a Wise Saver Roadshows – symposium / lecture type – speakers from PDIC & partners  FSF / Central Bank Financial Literacy Roadshows for students & working professionals  Paid newspaper advertisement

49 49 Public Awareness Program FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC KEY MESSAGES  PDIC mandate, importance of saving  The Seven Habits & Wise Saver 1. Know your bank 2. Know your bank products 3. Know your bank’s services and fees 4. Keep your bank records safe and updated 5. Transact only inside the bank with authorized personnel 6. Be informed about PDIC deposit insurance 7. Be prudent

50 50 PDIC Basic Secondary Education Module Development Project (in cooperation with the Department of Education and Culture) FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC Financial literary project for public high school students Teachers’ Guide in the subjects Values Education and Economics was launched in 2005 Distributed to 5,500 public schools, benefited 6.3 M high school students annually Public Awareness Program Expanded to cover private high schools in 2007, and was translated to English. Discussions ongoing for update of the Teachers’ Guide to incorporate capital markets concept Project won the 1 st Gawad Pampublikong Korporasyon Award by the Office of Government Corporate Counsel

51 51 PDIC-Commission on Higher Education (CHED)- Philippine Council of Deans and Educators in Business (PCDEB) Tripartite Linkage FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC Financial literacy project for university students PDIC established a Memorandum of Understanding with the CHED and PCDEB for the inclusion of financial literacy, savings consciousness, responsible banking and deposit insurance in the basic Finance subject of the Business Administration course. Public Awareness Program Benefited 500,000 college students enrolled in business courses

52 52 Financial Literacy Guidebook FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC The guidebook aims to educate the vulnerable sectors of society to handle their hard-earned savings. The handbook will cater to overseas Filipino workers (OFWs) and their families and beneficiaries, retirees, senior citizens & the academe Public Awareness Program Launched on June 20, 2013 during the IADI Exco Meeting and International Conference Initial distribution through partnership with Social Security System (SSS) and Government Service Insurance System (GSIS)

53 53 Financial Sector Forum and multilateral committees Supervision of Financial Conglomerates Committee Supervision Methodology and Regulatory Policy Coordination Committee Reporting, Information Exchange and Dissemination Committee Consumer Protection and Education Committee Financial Stability Coordinating Council Memorandum of Agreement on Information Exchange with the Bangko Sentral ng Pilipinas (BSP) Financial Exposition roadshows of the BSP PARTNERSHIP WITH FINANCIAL REGULATORS Public Awareness Program

54 54 Bankers associations’ meetings /dialogues / briefings Compliance Officers’ Training course on BSP/PDIC Regulatory Issuances Compendium of Regulatory Issuances and Bulletins COORDINATING WITH BANKERS Public Awareness Program

55 55 PDIC Regulatory Issuance requires banks to prominently display PDIC official signs on maximum deposit insurance coverage and PDIC membership, prominently and continuously COORDINATING WITH BANKERS Decals & stickers Prominently and continuously posted at entrances of authorized banking units The PDIC Official Sign Prominently and continuously posted / displayed at the ATM site or shown electronically / digitally on ATM screen Standee / desktop Prominently and continuously displayed at teller’s counter/s or window/s Public Awareness Program

56 End of Presentation Thank You for Listening 56


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