Lawmaker Wants Banks to Pay Interest on All Accounts

**chua_riwap** · October 23rd, 2006 07:17 PM

Lawmaker Wants Banks to Pay Interest on All Accounts

REP. Joseph Santiago of Catanduanes wants the Bangko Sentral ng Pilipinas (BSP) to require all banks to pay interest on all savings accounts of depositors, regardless of their cash balances. Santiago also said that the BSP should prohibit banks from forcing depositors to keep a minimum monthly average daily balance in their accounts, whether in their passbooks or automated teller machine savings accounts.

He said banks impose excessive monthly penalty fees on depositors whose deposits fall below the requirement. Santiago pointed out that banks require a minimum deposit of P5,000 to P15,000 for savings accounts for them to pay interest. Accounts with balances falling below the minimum are automatically slapped P100 to P200 in monthly service charges.

Santiago pointed out that the Supreme Court has ruled that all deposits must be treated as loans granted to banks. Under this ruling, he said, the banks should pay interest at least on all savings accounts, whether the balance is P100 or P1,000.

In Gullas v. Philippine National Bank (62 Phil. 519), the Court, invoking Article 1890 of the Civil Code, ruled that “bank deposits, whether fixed, savings or current, are treated as loans because they earn interest.”

“The practice of the debtor [the bank] penalizing the creditor [the depositor] is highly anomalous,” he said. “Normally, it is the borrower that gets penalized by the creditor, not the other way around.”

A member of the Bicameral Oversight Committee on Comprehensive Tax Reform Program, Santiago also pointed out that the nonpayment of interest by banks on the deposits of a growing number of account holders has become a convenient tax loophole.

“Since banks do not pay interest on some deposits they take in, the government loses revenues from withholding taxes,” he said, adding, banks still get to use the money in deposits that are not earning any interest at all.

Under the law, all interest paid by banks to depositors are subject to 20-percent withholding taxes.

Santiago is the author of House Bill 4630, which seeks to prohibit banks from exacting unwanted service fees or penalty charges from depositors.

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Sana nga maipasa itong Bill na ito, para yung mga kababayan natin na maliit lang ang pera sa bangko, kahit papano, kumita.

Ako nga may time deposit sa BPI, pero ang liit pa rin ng interest, considering yung amount na ipinasok ko sa kanila. Pasalamat na lang ako, kasi yung pinaghirapan ko rito sa abroad, safe.

At sana naman, huwag matulad ang BPI sa ibang bangko na nagsara (alam ko BPI, matibay....para kang nakasandal sa pader....He-he! Tama ba ako?), kundi, patay ang mga pinaghirapan ko.

**mazdamazda** · October 23rd, 2006 07:28 PM

Well... it is just fair for the banks to require a MDB since they also have to take into consideration the overhead operating expense needed to maintain the said accounts.

Also - some banks have accounts that require no MDB and only earn interest if you hit a certain value (BPI Express). Heck - there are even kiddie accounts that you can open for just 500 bucks and it'll earn interest.

**niky** · October 23rd, 2006 07:51 PM

Don't all banks already assign interest to all accounts? I get something like (checks calculator) 0.01% interest on my account...

**oldblue** · October 23rd, 2006 08:48 PM

dapat pati checking account

**chua_riwap** · October 23rd, 2006 10:12 PM

Originally Posted by niky

Don't all banks already assign interest to all accounts? I get something like (checks calculator) 0.01% interest on my account...

Oo nga.....parang patago na lang yung pera. Halos katiting na lang ang interest.

**uls** · October 23rd, 2006 10:36 PM

tho the lawmaker's proposal would make him popular, the last thing a lawmaker should do is interfere with the banking system. Sa lahat ng papakialaman, wag yung banking system. That's the only thing that's run efficiently in our country.

Our bankers are good at what they do. That's one thing i admire in this freakin' God-forsaken land of ours. Our bankers are better than world class. They pulled our banks thru the worst and toughest times (Marcos & Cory era) and emerged stronger than ever.

Lawmakers, go find something else to boost your popularity. Hands off our banks!