{
  "id": 5597707,
  "title": "The business of banking",
  "url": "https://urgent.news/2026/09/04/the-business-of-banking",
  "topic": "business",
  "section": "Business",
  "published": "2026-09-04T16:00:00.000Z",
  "source": {
    "name": "Philippine Star Business",
    "slug": "philippine-star-business",
    "url": "https://www.philstar.com/business/2026/09/05/2554054/business-banking"
  },
  "original_language": "en",
  "account": "The Supreme Court has emphasized the responsibility banks have to handle clients' funds with the utmost care and to carefully select and supervise their employees. Recently, the High Tribunal reminded banks of this duty again in the case of BDO Unibank vs. Barcellano. In this case, Barcellano deposited a Land Bank check for P151,200 to her savings account at BDO's Lucena City branch. A BDO teller incorrectly marked the check as local instead of regional, causing it to be cleared within three days instead of the usual seven for regional checks. Barcellano then withdrew P76,000 from her BDO account, which was later returned to the bank upon receiving a stop payment order. The teller later discovered the mistake, but BDO did not ask Barcellano to return the money. BDO filed an estafa complaint against Barcellano, but the Regional Trial Court acquitted her, stating there was no evidence of fraud, deceit, or abuse of confidence on her part. BDO appealed to the Court of Appeals, arguing that the erroneous crediting of the check was a payment by mistake resulting in a constructive trust. However, the CA upheld the lower court's ruling, saying BDO's act of validating the check as local caused the loss, and the principle of solution indebiti or payment by mistake did not apply as the undue payment was due to BDO's gross negligence. BDO then asked the Supreme Court to overturn the CA's decision, claiming there was no evidence of gross negligence, Barcellano's refusal to return the amount was unjust enrichment, and there was a constructive trust. However, the SC affirmed the CA's ruling, stating there was no unjust enrichment or constructive trust to compel the return of the amount to BDO. The SC emphasized that BDO's business involves public interest and that banks must exercise extraordinary diligence. BDO's multiple errors, including crediting the check without clearing it with the drawee bank and not detecting the erroneous clearing until receiving a stop payment order, clearly demonstrated gross negligence. The SC held that BDO's failure to observe basic safeguards against invalid checks led to the loss of money and that paying the drawer an amount from the check before clearing it with the drawee bank is contrary to normal banking practice. The proximate cause of BDO's loss was its own negligence, and thus, there was no duty on Barcellano to return the amount she erroneously withdrew.",
  "summary": "The Supreme Court reminded banks of their duty to exercise the highest degree of diligence in handling their clients’ funds and in selecting and supervising employees, owing to the fiduciary nature of the banking business.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}