State-run Philippine Deposit Insurance Corp. (PDIC) has announced that the payment of deposit insurance to more than 8,000 depositors of the shuttered AMA Rural Bank of Mandaluyong Inc. will have to wait longer as the Court of Appeals (CA) issued a writ of preliminary injunction preventing them from further pursuing deposit insurance and liquidation operations in the closed AMA bank.
This development came a day before the 60-day temporary restraining order (TRO) issued by the CA on November 25 last year was about to expire.
In statement on Friday, the PDIC immediately expressed “grave concern” on the latest development, saying the court order “further delayed the processing and payment of deposit insurance claims for valid deposits in the bank.”
“This injunction, including the refusal of AMA Bank officers and employees to account for and turn over the assets and records of the bank, and the previous issuance by the [CA] of a TRO against [the] PDIC to implement the closure of AMA Bank, all contributed to the delay in the payment of insured deposits,” it said.
The injunction will be in effect pending the CA’s decision on the case.
In spite of the injunction order, the PDIC stood firm that AMA Bank remains closed and under liquidation by the state insurer, which is also the sole authority to manage and administer closed banks under the law. PDIC has also since assured the depositors that it is committed to pay the insured deposits maintained in the AMA Bank despite the recent challenges.
Depositors, as well as clients of AMA Bank were also advised to communicate only with PDIC.
In 2019, 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 by the Monetary Board of the Bangko Sentral ng Pilipinas.
Before end-2019, the state deposit insurer conducted payout operations for 10 out of 11 closed banks. Of the 11 closed banks, it is only in AMA Bank where the PDIC was unable to conduct payout operations due to the TRO.
As of June 2019, AMA Bank reported total deposit liabilities of 1.4 billion for 8,434 deposit accounts.
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.
PDIC also 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 our stiffer sanctions and penalties against those who engage in unsafe, and unsound banking practices.
1 comment
As a depositor, how long shall i wait to get back the hard-earned money that i worked for many years? We are the victims here. Where is justice for us? What does the government do to help us get back our money and trust to the banking system?