Solons seek ample protection for bank depositors
Marikina Rep. Romero Quimbo. INQUIRER.net FILE PHOTO
MANILA, Philippines–Four lawmakers wanted the House of Representatives to investigate the impact on depositors of the closure of over 300 banks in the country over the past 16 years.
According House Resolution 869, over 300 banks were ordered closed by the Monetary Board in the past 16 years.
The resolution seeks the help of the Committee on Banks and Financial Intermediaries to conduct an inquiry in aid of legislation on the effect of these closures on depositors and to ensure that the depositing public has ample protection.
The authors of the resolution are Marikina city Representative Romero Quimbo, Benguet Rep. Ronald Cosalan, Iloilo Rep. Arthur Defensor Jr., and ANGKLA party-list Rep. Jesulito Manalo.
Depositors of a closed bank would not be able to recover deposits that go over the banks’ maximum insurance coverage.
“The most adversely affected in this spate of bank closures are our constituents who entrusted their hard-earned money to the banks only to lose the same without any fault on their part,” the authors said.
The bulk of the closed banks are rural banks, thrift banks, savings banks and small commercial banks containing the funds of retirees, cooperatives, small-scale businesses, and mutual fund associations, the authors said.
The lawmakers cited the case of the Export and Industry Bank, which was ordered closed by the Monetary Board in 2012 due to its liabilities that could not be covered by its assets.
They said depositors of the bank fought together in seeking the return of their deposits, but their fight was hampered by “inadequate legal remedies and protection.”
Under Section 30 of the New Central Bank Act or Republic Act 7653, depositors have no “judicial recourse” as only the majority stockholders of the bank have “legal standing” to question the decisions of the Monetary Board.
The authors said under the original law or Republic Act 265 which was later amended by RA 7653, the right to challenge the Board’s decision does not lie solely on the majority stockholders.
“It is now imperative that we introduce reforms in our banking statutes to give ample protection to the depositing public,” they said.
The authors filed the resolution as the Bangko Sentral ng Pilipinas expects more mergers in the rural banking sector with industry players taking advantage of regulatory incentives.
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