The Bangko Sentral ng Pilipinas’ policy-making Monetary Board has placed LBC Development Bank under the receivership of the Philippine Deposit Insurance Corporation due to liquidity problems.
BSP Governor Amando Tetangco Jr. said the Board decided to put the thrift bank under PDIC receivership in line with Section 30 of Republic Act No. 7653, otherwise known as the New Central Bank Act.
The law allows the MB to place a bank under PDIC receivership if it “is unable to pay its liabilities as they become due in the ordinary course of business”, “has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities.”
The MB can also make the move when the bank “cannot continue in business without involving probable losses to its depositors or creditors; and “has willfully violated a cease and desist order under Section 37 that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution.”
PDIC said it took over LBC Development Bank on September 9, 2011, the same day MB Resolution No. 1354 came out.
Thus, PDIC has started the gathering, verifying and validating of all records of the bank to administer and preserve its assets for all its creditors.
“PDIC assured depositors of LBC Development Bank that all valid accounts and deposit insurance claims will be paid as soon as possible. It also said that updates will be issued as soon as examination and validation of accounts are completed,” it said.
The 20-unit thrift bank’s head office is located at 809 J. P. Rizal Street, Poblacion, Makati City while its branches are located nationwide.
PDIC said the bank has estimated total deposit liabilities of P6.09 billion as of last June and this “accounts for one tenth of one percent” of the country’s banking system.
The bank has 321,516 accounts and 99.4 percent of which are fully-covered by deposit insurance. It has insured deposits amounting to P3.73 billion.
PDIC allows for the automatic payment of accounts with balances of P10,000 and below if holders of these have complete addresses with the bank and without outstanding bank loans.
Payments will be made through postal money orders, which can also be encashed in branches of Land Bank of the Philippines nationwide.
PDIC said it will conduct a series of Depositors Forums in areas where the bank has branches and schedules of these “will be announced as soon as possible in the bank premises and in the PDIC website, www.pdic.gov.ph.”
“We assure depositors that PDIC will pay deposit insurance for all valid accounts and claims,” the PDIC said.*PNA