Bank error, bank loss: Supreme Court rules banks can't reclaim funds due to own negligence

The Supreme Court of the Philippines has ruled that a bank cannot legally compel a depositor to return funds withdrawn from an account due to the bank's own gross negligence. In a February 12, 2026 decision, the high court's Third Division dismissed a petition filed by BDO Unibank Inc. following an unfortunate incident involving its Lucena City branch.

The case was brought about by a misplaced check withdrawal totaling P151,200, with the funds wrongly made available in the depositor's account following a three-day clearing period instead of the mandated seven-day period for regional checks. Upon discovering the error, BDO demanded the depositor's return of the withdrawn amount, but the court found no evidence of fraud or deceit on the woman's part, as she had acted in good faith.

The court emphasized that BDO's gross negligence in handling the check was the direct cause of the financial loss and dismissed the solutio indebiti principle, which would have otherwise required the bank's repayment of the funds.