Shuttered AMA Bank refuses to turn over records – PDIC
PDIC gives employees of AMA Bank of Mandaluyong 24 hours to turn over bank records or face the 'full force of law'

MANILA, Philippines –  The Philippine Deposit Insurance Corporation (PDIC) Friday, November 15, threatened to use “the full force of the law” against employees of the shuttered AMA Rural Bank of Mandaluyong for refusing to turnover bank records.

The PDIC needed the bank records to facilitate the payment of claims of insured deposits after the bank owned by businessman Amable Aguiluz was ordered close by the Bangko Sentral ng Pilipinas (BSP) last November 8. 

The PDIC said in a statement that the AMA Rural Bank employees declined to account for and turn over the records under individual accountabilities.

“Without these records, the PDIC will be unable to immediately pay the claims of deposits for insured deposits. Until the bank employees comply, the payment schedule of insured deposits shall further be delayed,” PDIC said.

The Monetary Board, the policy-making body of the BSP,  issued Resolution No. 1705.D prohibiting AMA Rural Bank from doing business in the Philippines pursuant to Section 30 of Republic Act 7653 or the New Central Bank Act.

Under the law, banks may be placed under receivership and liquidation proceedings if they have insufficient realizable assets, as determined by the BSP, to meet its liabilities.

The law also says that the PDIC would provide a maximum insurance coverage of P500,000 per depositor per bank.

The PDIC took over the AMA Rural Bank Friday last week.  “On the takeover date, bank employees were enjoined to account for and turnover records and other accountabilities to the PDIC, but refused.”

The PDIC reminded the bank that RA 3591 or the PDIC Charter states that refusal to turn over or destroying or tampering bank records by any director, officer, employee or agent of a bank are criminal acts and punishable by imprisonment.

“The PDIC will not hesitate to use the full force of the law to safeguard the interest of the depositing public,” it added.

PDIC gave the bank 24 hours from receipt of the written demand to report to the receiver.

Violation of this particular provision of the PDIC Charter is punishable with imprisonment of not less than six years up to 12 years or a fine of not more than P10 million, or both, at the discretion of the court.

Also shuttered by the MB that day was Maximum Savings Bank.

Earlier, the management of AMA Rural Bank questioned BSP’s closure order, stating the bank was liquid after shareholders infused an additional P405 million, as well, as the total deposit due from BSP and other banks amounting to P246 million.

In a statement on Sunday, November 10, AMA said that it would challenge the shutdown order from the Central Bank because it was “unreasonable.”

“AMA Bank assures our clients, employees, and stakeholders that we are fit to operate in every capacity. We challenge the closure as unreasonable,” it said.

“Guided by legal measures, we are exploring all possible courses of actions to resume our full operations and continue to serve you,” it added.

The Mandaluyong-based bank has 8,434 deposits accounts with deposit liabilities amounting to P1.4 billion. It is ranked 15th largest rural bank in terms of assets with P2.83 billion and fifth in terms of capital with P1.04 billion.

So far this year, the BSP has shut 11 problematic banks in a bid to weed the industry of weak players.

Other banks shuttered were: Rural Bank of Lemery, Rural Bank of Larena (Siquijor), East Coast Rural Bank of Hagonoy, Rural Bank of Guihulngan (Negros Oriental), Rural Bank of Basey (Samar), Valiant Bank, The Palawan Bank (Palawan Development Bank), Rural Bank of Mabitac (Laguna), and Bagong Bangko Rural ng Malabang (Lanao del Sur). –