A Senate probe panel was asked to look into last week’s unauthorized transactions and withdrawals in Bank of Philippine Islands (BPI) accounts—initially blamed on computer glitch—and craft remedial legislation, if needed, to allay concerns of depositors this could afflict other banks.
Senate President Aquilino L. Pimentel III on Tuesday filed Resolution 403 pressing for the inquiry on the alleged internal data-processing error at BPI that, he notes, “caused unauthorized credit and debit transactions from bank accounts of its client”.
The Pimentel Resolution directs the Committee on Banks, Financial Institutions and Currencies and other appropriate Senate Committees, to conduct an investigation into the June 7 BPI snafu, in aid of legislation.
“Considering that the banking system has become an indispensable institution…that plays a vital role in the economic life of every civilized society, a probe by the Senate should be held to look into the safeguards against injury to the banking public attributable to the negligence of banks which need to be studied and enacted into legislation,” Pimentel said.
The Senate leader noted that banks handle daily transactions involving billions of pesos, adding that “by the nature of their work, the highest degree of responsibility, care and trustworthiness are expected of banks”.
He added these banks are required to treat accounts and deposits of their clients with “meticulous care”.
Noting jurisprudence has consistently emphasized the banking system is impressed with public interest, he asserts that trust and confidence of the public in the banking industry is of “paramount interest”.
Pimentel recalls that the BPI was the first bank established in the country and is now one of the leading providers of banking and financial services with a net income of P6.3 billion, reporting total deposits of P1.44 trillion in the first quarter of 2017.
But the Senate leader lamented that BPI’s image, as one of the leaders of the banking industry, was “tainted” on the evening of June 6 when irate clients complained in various social media, reporting unauthorized withdrawals from their BPI accounts, some even citing negative balances. Pimentel said the frenzy among BPI clients intensified when BPI suspended electronic transactions the following day, June 7, preventing clients from checking on their accounts online.
He further recalled that on the same day, BPI issued an advisory admitting the bank encountered “internal data-processing error” resulting in some clients seeing their bank accounts debited twice or credited twice for a past transaction.
According to BPI President Cezar Consing, the error was traced to a system that twice processed files or transactions dated April 27 to May 2. Consing, who also sits as BPI CEO, denied that hackers caused the incident, assuring it was “only an internal issue” they would resolve on the same day and that “no BPI client will lose money”.
Pimentel, however, said this was not the first time that BPI clients complained of unauthorized withdrawals, recalling incidents of automated teller machines (ATMs) card skimming “involving BPI ATMs in various parts of Metro Manila and Bacolod” in 2015.
The Senate President added that a number of BPI account holders “find the public statements of the bank concerning this particular issue of incorrect balances unsatisfactory, lacking in details and shrouded in mysterious technical terms” adding the concerned depositors are looking forward to a public hearting on the matter.