Subject: Regulations on the Temporary Holding of Funds Subject of Disputed Transactions and Coordinated Verification Process

Circular No. 1215, signed by BSP Governor Eli Remolona Jr. on May 30, establishes regulations that financial institutions must adhere to when temporarily freezing funds, specifically those involved in disputes or coordinated verification processes.

The Bangko Sentral ng Pilipinas (BSP) grants banks the authority to freeze funds when necessary.

A bank freeze temporarily restricts access to an account, preventing withdrawals, transfers, or other transactions. This can happen for several reasons, such as suspicious activity, legal action, unpaid debts, or regulatory requirements.

When an account is frozen, the bank may notify the account holder, depending on the reason for the freeze. To resolve it, the account holder typically needs to provide necessary documentation, settle outstanding obligations, or comply with legal directives.