G.R. No.

191424

August 7, 2013

ALFEO D. VIVAS, ON HIS BEHALF AND ON BEHALF OF THE SHAREHOLDERS OF EUROCREDIT

COMMUNITY BANK, PETITIONER,
vs.
THE MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS AND THE PHILIPPINE
DEPOSIT INSURANCE CORPORATION, RESPONDENTS.

FACTS:
The Monetary Board placed the Eurocredit Community Bank under Prompt Corrective Action
framework on account of the findings of serious findings and supervisory concerns. Vivas moved for the
reconsideration of such action. ECBI also unjustly refused to allow the BSP examiners from inspecting its
books and records. The MB issued Resolution No. 276 placing ECBI under receivership, because of its
inability to pay its liabilities, insufficient realizable assets and violation of cease and desist order of the MB
for acts constituting unsound banking practices. Vivas argued that the MB committed grave abuse of
discretion for placing ECBI under receivership without prior notice and hearing, pursuant to RA 7353, Sec.
11.

ISSUE:
Whether or not the MB committed grave abuse of discretion in placing ECBI under receivership
without notice and hearing.

RULING:
No, the MB did not gravely abuse its discretion. The ECBI was given every chance to be heard and
improve its financial standing. Moreover, the MB has the power to forbid a bank from doing business and
place it under receivership without prior notice and hearing, when the circumstances warrant it. Under RA
7653, the MB was given with more power of closure and placement of a bank in receivership for
insolvency or if the continuance in the business would result in the loss of depositors or creditors. The
close now, hear later doctrine was justified on practical and legal considerations to preclude unwarranted
dissipation of the banks assets and as valid exercise of police power to protect creditors, depositors,
stockholders and the general public.