Updates on Legacy rural banks

James Ryan Jonas

Those looking for recent updates regarding the bank holiday declared by rural banks under the Legacy Financial Group need not look further. Below we’ve compiled news articles published on Philippine newspapers and official statements from the Bangko Sentral ng Pilipinas (BSP) regarding the issue.

For more updates, drop by the forum threads Update on the bank run of Legacy rural banks and Discussion of Legacy Group.

BSP takes over thirteen Legacy rural banks

The following banks have been placed under the receivership of the Philippine Deposit Insurance Corporation (PDIC) by the BSP after they were found to have insufficient assets to cover liabilities, were illiquid and were performing “unsafe and unsound banking practices.”

  1. Rural Bank of Paranaque, Inc.
  2. Rural Bank of San Jose (Batangas), Inc.
  3. Pilipino Rural Bank, Inc.
  4. Rural Bank of Bais (Negros Oriental), Inc.
  5. Bank of East Asia [Bangko Rural de Bisayas (Minglanilla, Cebu)], Inc.
  6. First Interstate Bank (Rural Bank of Kananga, Leyte), Inc.
  7. Philippine Countryside Rural Bank (Cebu), Inc.
  8. Dynamic Bank [Rural Bank of Calatagan (Batangas)], Inc.
  9. San Pablo City Development Bank
  10. Nation Bank (Bacolod City)
  11. Rural Bank of DARBCI (General Santos)
  12. Bicol Development Bank (Legaspi City)
  13. Rural Bank of Carmen (Cebu)

The PDIC would now take over the assets of these banks in order to pay off depositors and creditors. Under the law, PDIC will pay the maximum deposit insurance coverage of P250,000.

The BSP has previously wanted to close the banks after findings showed the rural banks were capital-deficient. The latter, however, was able to secure a temporary restraining order from a regional trial court which was later affirmed by the Court of Appeals. In early December, the Supreme Court overturned the lower court’s decisions which eventually allowed the BSP to take over the banks.

Source: Business World

PDIC to start processing claims of RBOP depositors

Depositors of the Rural Bank of Paranaque (RBoP) with savings account of P100,000 or less can now file their claims with the PDIC.

Claim forms are already being distributed at the premises of RBoP branches. To get claim forms, depositors need to present their original savings passbook. In order to have their claim processed, the form must be submitted together with the  depositor’s passbook and two valid IDs to PDIC representatives on the appointment/payout date indicated on the claim form.

Distribution of claim forms for depositors with more than P100,000 balances will be announced after examination of the bank’s records is completed.

Source: PDIC

Senate to investigate Legacy banks’ bankruptcy in January

The Philippine Senate is set to launch an investigation in January next year to probe the issue of Legacy banks which earlier declared bank holiday or were shut down by the Bangko Sentral for questionable practices.

Source: Inquirer.net

For more updates and to join the discussion with other Legacy depositors, visit the following forum threads:

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.