No adverse effect from Bank closures – Bangko Sentral
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Sun, 10 Nov 2019 16:10:32 +0000
The closing of two local lenders late last week will have no negative impact on the banking system, the central bank assured.
“The closures of AMA Rural Bank of Mandaluyong Inc. and Maximum Savings Bank Inc. are not expected to adversely affect the Philippine banking system considering their relatively small size,” the Bangko Sentral ng Pilipinas (BSP) said in a statement over the weekend.
It explained the total assets of the two banking entities are equivalent to only 0.02 percent and 0.002 percent, respectively, of the total assets of the banking system as of June 30, 2019.
“The overall Philippine banking system remains sound and stable with ample liquidity and high level of capitalization as BSP continues to promote good governance among its supervised institutions to ensure the soundness of the banking system and to protect the interest of the banking public,” the BSP added.
The banks were ordered closed and placed under Philippine Deposit Insurance Corp. (PDIC) receivership by the Monetary Board on November 7.
Maximum Savings Bank and AMA Rural Bank of Mandaluyong were the 10th and 11th lender to be placed under PDIC receivership this year.
As receiver, the PDIC took over the banks and their assets, records and affairs on Friday.
Thrift bank Maximum Savings Bank has a network of three branches with its main branch located in Batangas City and the other branches located in Sabang and Calapan City, both in Oriental Mindoro.
Meanwhile, AMA Rural Bank of Mandaluyong — the banking arm of AMA Group of Companies — is the 15th largest rural bank in the country with total assets of P2.82 billion as of the first half of the year.
According to PDIC, it has a network of 13 branches with its main branch located in Mandaluyong City and the other branches in Pasig City; Baguio City; San Fernando City, La Union; Tuguegarao City, Cagayan; Baliuag, Bulacan; San Fernando, Pampanga; Bacoor, Cavite; Cainta and Morong in Rizal; Calamba City and San Pablo City in Laguna; and Palo, Leyte.
AMA Rural Bank of Mandaluyong has 8,434 deposit accounts with total deposit liabilities of P1.4 billion as of June 30, 2019. Of the total, 92.06 percent or P1.3 billion are insured deposits.
The state-run deposit insurer said upon placement of the banks under liquidation, the powers, functions and duties of their directors, officers and stockholders are terminated.
Depositors of closed banks under PDIC receivership are entitled to be paid up to the maximum insurance coverage of P500,000.
Depositors with valid accounts of P100,000 and below do not need to file deposit insurance claims, except when they have outstanding obligations with the closed bank or acted as co-makers of obligations.
The Monetary Board closed 12 banks in 2018 and seven banks in 2017.