P3-B lost because of bank failures


A total of 84,873 depositors lost some P3 billion in savings as a result of the collapse of nine banks from January 1 to June 15 this year, a lawmaker reported on Sunday.

Rep. Arnel Ty of the LPGMA party-list, a member of the House committee on banks and financial intermediaries, also said that at least 40 former officers of failed banks are facing criminal charges filed this year by the state-run Philippine Deposit Insurance Corp.

The charges range from economic sabotage and syndicated estafa to violations of banking laws.

“We welcome the forceful legal actions taken by regulators against erring bank officers. We are hopeful these will help deter the embezzlement of deposits solicited from the public, and also serve to discourage the conduct of unsafe and sound banking practices,” Ty said.

Among those facing charges for banking law violations are the former chairman, two former presidents and three other former senior officers of the closed Export and Industry Bank (EIB).

EIB’s closure on April 26, 2012 distressed more than 50,000 depositors who lost a combined P15.9 billion in deposits.

Meanwhile, the former president and five borrowers of the closed LBC Development Bank are facing a P229.5-million syndicated estafa case.

More than 320,000 depositors lost a total of P6 billion when LBC Bank was shut down on September 9, 2011.

Ty is author of House Resolution 1749 which seeks an inquiry into the banking industry’s condition in a bid to come up with remedial legislation meant to protect depositors, build up public confidence in banks, promote savings, and support responsible credit.

The nine lenders shut from January 1 to June 15 this year were Capitol City Rural Bank (Cavite) Inc., Rural Bank of Gainza (Camarines Sur) Inc., Rural Bank of Majayjay (Laguna) Inc., Rural Bank of Buenavista (Agusan del Norte) Inc., La Consolacion Rural Bank (Laguna) Inc., Rural Bank of Kinogitan (Misamis Oriental) Inc., Cooperative Rural Bank of Bulacan, Rural Bank of Naval (Leyte) Inc., and Rural Bank of Borongan (Eastern Samar) Inc.

In 2012, more than 120,000 depositors lost some P19.5 billion as a result of the collapse of 24 banks.

Under the General Banking Law of 2000, unsafe banking activities include the excessive reliance on large, high-cost or volatile deposits or borrowing, including the offering of interest rates on said funds that are 50 percent higher than current industry rates.

The weighted average interest rate offered by all commercial banks peso time deposits (for a term of 360 days) stood at 1.80 percent per annum as of April, according to the Bangko Sentral ng Pilipinas.


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