Copyright 2000 BusinessWorld Publishing Corporation
BusinessWorld
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June 13, 2000, Tuesday
HEADLINE: PDIC readies liquidation of rural
bank
BYLINE: Leilani M. Gallardo
The Philippine Deposit Insurance Corp. (PDIC) is set to liquidate the assets of
closed Rural Bank of San Miguel (RBSM) after the bank's owners failed to come up
with a rehabilitation plan within the 90-receivership period.
The Bulacan-based rural bank was placed under PDIC receivership last Jan. 21
after declaring a bank holiday on Jan. 5. RBSM, owned by businessman Hilario
Soriano, then blamed bad publicity created by the year 2000 or "Y2K"
computer bug and the Bangko Sentral's failure to grant an emergency loan for its
liquidity problems.
In a recent interview, PDIC president Norberto C. Nazareno said PDIC management
has already recommended RBSM's liquidation to its board since its 90-day
receivership period has already lapsed and no party has expressed interest to
rehabilitate the troubled bank.
"Under the law, receivership is only 90 days. On the 91st day, it is the
discretion of PDIC whether we can liquidate it and refer it to our board, but it
is our board who will liquidate it. It is being recommended by management,"
Mr. Nazareno told BusinessWorld.
"It doesn't have any rehabilitation plan. There's no proposal for
rehabilitation from the owners or from anybody," the PDIC chief added.
During the liquidation process, the PDIC will start disposing the bank's assets
so it can start paying liabilities.
Mr. Nazareno said PDIC's examination of the rural bank's records showed the
number of insured deposits significantly increased compared with its initial
assessment when it first took over.
"As we paid the depositors, they come with their certificate of time
deposit but we see that is not recorded in the bank's records," Mr.
Nazareno said.
From the initial assessment of P479 million, RBSM's insured deposits had
ballooned to P580 million, he said. The PDIC earlier said anomalous accounts,
splitting of deposits and the conversion of manager's checks into split accounts
have hampered its audit and consolidation of the records leading to the delay in
the servicing of insured deposits.
RBSM's Mr. Soriano earlier tried to stop the PDIC from continuing its
receivership activities but failed.