APRIL 19, 2014

NR # 3441

Lawmakers seek inquiry into the plight of depositors in closed banks

Did you know that more than 300 banks have been ordered closed by the Monetary Board (MB) during the past 16 years and what happened to their depositors! "his is why #our lawmakers through $% &6' are asking the (ommittee on Banks and )inancial *ntermediaries to conduct an in+uiry in aid o# legislation on the plight o# depositors o# closed banks, $% &6' also aims to guide the #ormulation and cra#ting o# necessary re#orm legislation that would provide ample protection and remedies to the depositing public, $% &6' was #iled by %eps, %onald (osalan (-one District Benguet) .rthur %, De#ensor /r, (3rd District *loilo) /esulito Manalo (.012-. 3arty4list) and %omero 5Miro6 7uimbo (8nd District Marikina (ity), "he authors revealed that ma9ority o# the closed banks are rural banks thri#t banks savings banks and small commercial banks with deposit comprising #unds o# retirees cooperatives small4scale businesses and mutual #und associations among other depositors, (urrently the ma:imum deposit insurance coverage o# the 3hilippine Deposit *nsurance (orporation (3D*() o# 3;00 000 per account does not cover the entire amount o# deposits in the closed banks the authors noted, "he resolution states that the depositors o# these closed banks su##ered substantial and irreparable economic damage as they could not recover their deposits in e:cess o# the ma:imum deposit insurance coverage, <"he most adversely a##ected in this spate o# bank closures are our constituents who entrusted their hard4earned money to the banks only to lose the same without any #ault on their part = the authors lamented, "hey cited that in the recent closure o# the >:port and *ndustry Bank (>*B) ? a commercial bank with thousands o# depositors consisting o# retirees small entrepreneurs and cooperatives among others ? the depositors bonded together to seek measures to recover their deposits but has been hampered by inade+uate legal remedies and protection despite the #act that a representative o# the 3D*( sits in the Board o# Directors o# >*B, @ne o# the points raised by the authors is Aection 30 o# %,., B6;3 or the 0ew (entral Bank .ct the depositors who have actual substantial material direct and immediate legal interest in the continued operations o# banks are deprived o# 9udicial

recourse because only the ma9ority stockholders o# the bank have legal standing to +uestion the orders and resolutions o# the Monetary Board, Aection 30 o# %,., B6;3 provides that orders and resolutions o# the MB as regards conservatorship receivership and li+uidation o# troubled banks are immediately #inal and e:ecutoryC and the right to 9udicially challenge the same is solely vested with the ma9ority stockholders o# the bank, $istorically the authors recalled that under Aection 8' o# %,., 86; or the original law that created the Bangko Sentral ng Pilipinas the right to 9udicially challenge the orders and resolutions o# the MB as regards conservatorship receivership and li+uidation o# troubled banks thereo# was not e:clusively vested in the ma9ority o# its stockholders and the onus (or responsibility) o# 9usti#ying the closure o# banks lies with the MB$, <*t is now imperative that we introduce re#orms in our banki'ng statutes to give ample protection to the depositing public = the authors concluded, (30) dpt