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DARAGA,
Albay—The Philippine Deposit Insurance Corp. (PDIC) has
placed under receivership G7 Bank Inc. on orders of the
Monetary Board of the Banko Sentral ng Pilipinas (BSP)
after it had been found suffering from insolvency.
Payout
to depositors up to P250,000 representing guaranteed
deposit insurance has been arranged, and Maria Leonida
Felix, PDIC’s corporate communication department head,
said rigorous examination of available bank records is
being conducted to ascertain the validity of claims.
The
speed of the payout, Felix said, would depend on the
availability of bank records upon takeover that actually
took effect on August 1.
PDIC is
the statutory receiver of closed banks all over the
country. Felix said the move surrounding G7 Bank is in
line with the state insurance agency’s commitment to
protect the interest of depositors by providing them
immediate access to their insured deposits.
G7 Bank,
which was originally the Rural Bank of Nabua, owned by
Filipino-Chinese banker Fidel Cu, has its head office in
Naga City. Its branches are in Polangui, Ligao City,
Albay; Nabua, Camarines Sur; Padian, Naga City; and
Pasig City in Metro Manila.
Cu, a
resident of Naga City, is well-known in the area as a
philanthropist and close friend of high-ranking
officials holding powerful positions in government, the
Church and the media.
He was
appointed by President Arroyo as director of the
Philippine Crop Insurance Corp. early this year after
serving as director representing the private sector in
the board of directors of Quedancor.
BSP and
PDIC records show the bank had total deposits of P3.4
billion as of June 30, 2008.
As G7
Bank’s receiver, Felix said, PDIC takes charge of the
assets and liabilities of the bank, which has been
prohibited from doing business.
“PDIC is
duty-bound to gather, preserve and administer such
assets and liabilities for the benefit of the depositors
and creditors of the bank, and to continue liquidation
whenever authorized by pertinent laws and to dispose of
the assets and wind up its affairs,” she said.
The BSP
closure order, she said, was based on Republic Act 7653,
or the New Central Bank Act, that provides grounds by
which the Monetary Board can forbid a bank from doing
business in the country and put it under PDIC
receivership.
G7 Bank
was closed as it was unable to pay liabilities that were
falling due. Also cited were insufficient realizable
assets—as determined by the BSP—to meet its liabilities
that the bank could no longer continue doing business
without causing probable losses to its clients, Felix
said.
BSP
records also show that G7 suffered heavy withdrawals in
late May amid rumors of liquidity problems and
bankruptcy.
Its
problems were aggravated when preferred depositors
failed to withdraw their time deposits amounting to
millions of pesos. At that time, the bank remained open
but allowed only limited withdrawals at P5,000 per
account.
The
amount was reduced to P1,000 per account in the middle
of June until the PDIC came over to place the bank under
receivership.
In
another statement, Cu said the G7 Bank management
received a notice of PDIC receivership on August 1.
“We are
saddened by the unexpected decision of the BSP’s
Monetary Board. A small but powerful and noisy group of
depositors aided by some persons who have personal
vendetta against me helped lock all efforts of G7 Bank
to resolve the problem,” Cu said in the statement.
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