The Currency Board has ordered Metro-Cebu Public Savings Bank to cease operations and go into liquidation, the fifth bank to be closed so far this year.
Earlier this year, the MB sent similar orders to four others – all rural banks – which operated in Leyte, Ilocos Sur, Laguna and Pangasinan.
This came as the Bangko Sentral ng Pilipinas (BSP) was preparing to roll out the Rural Banking Strengthening Program (RBSP) to improve the operations, capacity and competitiveness of rural banks.
At the same time, the state-owned Philippine Deposit Insurance Corp. (PDIC) has warned the public about a deposit insurance payment scam.
Separately, in an advisory, the PDIC said payments for bank deposit insurance claims were processed at no cost and only for qualified customers of closed banks.
The PDIC has sounded the alarm over a scheme whereby fraudsters inform potential victims that they have a pending claim, which they would receive if they made a deposit into a certain bank account.
This deposit insurance scam is perpetrated using forged documents, which bear the PDIC logo and forged signatures of senior government officials.
In particular, the intended victims receive a fake letter of assurance document, claiming that the PDIC is obligated to release the funds to the recipient.
However, these funds will only be released after the victim pays for “compulsory insurance” through a certain deposit account in a Philippine bank.
“The public is strongly advised to ignore calls, messages or emails from individuals with ‘too good to be true’ promises or suspicious transactions; and to refuse requests for personal information from those claiming to be employees of the PDIC or other government institutions without first verifying their identity with the organizations they claim to represent,” he added.
Additionally, PDIC said it “will not be liable for any financial implications resulting from the scam and other dealings with unauthorized persons.”
In 2021, the highest decision-making body of BSP ordered the closure of 13 rural banks.
By warrant, PDIC assumes receivership of banks ordered closed, including the Metro-Cebu Public Savings Bank, which had two branches – one in Lapu-lapu City and another in Talisay City.
Also according to the law, any bank put into liquidation cannot be rehabilitated nor reopened and authorized to resume its banking activities.
“The PDIC took over the Bank and all of its branches, assets, records and affairs on April 1, 2022,” the state corporation said in a bulletin.
In 2020, during the initial impact of the COVID-19 pandemic, MBs issued liquidation orders on only five rural banks. Before that, there were 11 banks in 2019, 12 in 2018, 6 in 2017 and 22 in 2016.
Last week, the MB gave the green light to the BSP to roll out the RBSP, which will run for three years and aims to promote a safe, sound and resilient financial system.
“We believe that the RBSP is necessary to strengthen the resilience of rural banks in the face of changing challenges in the banking system and to strengthen their role in promoting inclusive growth,” said BSP Governor Benjamin Diokno. , during a press briefing.
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