3. Diligence Required of Banks

Highest Degree of Diligence

The fiduciary nature of banking requires high standards of integrity and performance. (Sec. 2)¹

Fiduciary relationship

The bank’s obligation to observe high standards of integrity and performance is deemed written into every deposit agreement between a bank and its depositor. (Philippine Banking Corporation v. Court of Appeals and Leonilo Marcos, G.R. No. 127469, 15 January 2004)²

Banking is vested with public interest

As a business affected with public interest and because of the nature of its functions, the bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. (Simex International v. COURT OF APPEALS and TRADERS ROYAL BANK, G.R. No. 88013, 19 March 1990)³

Banks are expected to exercise the highest degree of diligence in the selection and supervision of their employees. By the very nature of their work, the degree of responsibility, care and trustworthiness expected of their employees and officials is far greater than those of ordinary clerks and employees. (Philippine Commercial International Bank v. Court of Appeals and Ford Philippines, Inc. and Citibank, G.R. No. 121413, 29 January 2001)⁴

Banking business is impressed with public interest, of paramount importance thereto is the trust and confidence of the public in general, the highest degree of diligence is expected, and high standards of integrity and performance are even required of it. (Bank of the Philippine Islands v. Internationale, G.R. No. 149454, 28 May 2004)⁵