All member banks are reminded to strictly comply with Section X801.7 of the Bangko Sentral ng Pilipinas (BSP) Manual of Regulations for Banks regarding the acceptance of second-endorsed checks, relative to checks issued by PDIC as payment of deposit insurance, to wit:

“Banks shall adopt stricter policy guidelines in the acceptance of second-endorsed checks to ensure that they are not being used as instruments for money laundering or other illegal activities. For this purpose, banks shall limit the acceptance of second-endorsed checks from properly identified clients and only after establishing that the nature of the business of said clients justifies, or at least, makes practical the deposit of second-endorsed checks. In case of isolated transactions involving deposits of second-endorsed business, the identity of the first endorser should be established and the record of the identification shall also be kept for five (5) years. It is also understood that banks shall at all times follow the Know-Your-Customer (KYC) rules whenever they handle or transact second-endorsed checks.”

Any loss or liability arising from failure to adopt reasonable measures and stricter policies regarding the acceptance of second-endorsed PDIC checks for encashment or deposit shall be borne solely by the member bank concerned.

For questions/concerns on checks issued by PDIC, kindly coordinate with:

The Vice President
Treasury Group
Philippine Deposit Insurance Corp.
8th Floor, SSS Building
Ayala Ave. cor. V. Rufino Street
Makati City
Tel. No. 8414856

June 29, 2010