STATE-RUN Philippine Deposit Insurance Corp. (PDIC) has paid a total of P1.18 billion in deposit insurance, or 92.25 percent of the total amount of deposit insurance claims of depositors from banks ordered closed in 2019 by the Bangko Sentral ng Pilipinas’s Monetary Board.
PDIC on Thursday said in a statement that total deposit insurance it paid covered 51,278 valid deposit accounts from January to December 2019.
PDIC took over 11 banks ordered closed in 2019.
These are Bagong Bangko Rural ng Malabang Inc.; (Lanao del Sur); Rural Bank of Mabitac Inc. (Laguna); The Palawan Bank Inc. (Palawan Development Bank); Valiant Bank Inc. (A Rural Bank); Rural Bank of Basey Inc. (Samar); Rural Bank of Guihulngan Inc. (Negros Oriental); East Coast Rural Bank of Hagonoy Inc.; Rural Bank of Larena Inc. (Siquijor); Rural Bank of Lemery Inc.; AMA Rural Bank of Mandaluyong Inc.; and Maximum Savings Bank Inc.
Before the year-end, the state deposit insurer conducted payout operations for 10 out of 11 closed banks. The estimated insured deposits in these 10 closed banks amounted to P1.27 billion involving 76,650 accounts.
Of the 11 closed banks, it is only in AMA Rural Bank of Mandaluyong, Inc. where the PDIC was unable to conduct payout operations due to the 60-day temporary restraining order (TRO).
The Court of Appeals issued the TRO on November 25, 2019, in favor of the bank’s majority stakeholders. Thus, PDIC was constrained from continuing its deposit insurance and liquidation operations in the said closed bank.
In December, PDIC asked CA to lift and dissolve the TRO.
As of June 2019, AMA Rural Bank reported total deposit liabilities of P1.4 billion for 8,434 deposit accounts.
Prior to the issuance of the TRO, PDIC was unable to immediately pay the claims of depositors of AMA Rural Bank for insured deposits due to the delay caused by the refusal of the bank’s directors, accountable officers and employees to turn over bank records to PDIC. The TRO has further delayed payouts to depositors.
PDIC, an attached agency of the Department of Finance, is mandated under the law to insure the deposits of all banks which are entitled to the benefits of insurance.
The PDIC now has the authority to help depositors have quicker access to their insured deposits should their bank close, resolve problem banks while these are still open, hasten the liquidation process for closed banks, and mete out stiffer sanctions and penalties against those who engage in unsafe, and unsound, banking practices.