Deposit claims of 15 closed banks to reach P14B - PDIC

Deposit claims from the group of 15 banks, including the so-called Legacy Group are estimated to reach P14 billion and deposit insurance authorities said they were hiring an external auditing firm to speed up the settlement of the claims.

Philippine Insurance Deposit Corp. president Jose C. Nograles said the deposit claims are well-covered but external assistance would be required to facilitate the examination and settlement of the claims.

These banks include the 13 rural banks under the Legacy Group with alleged involvement in fraudulent activities, as well as two other unrelated rural banks identified as the Community Rural Bank of San Joaquin in Iloilo and the Rural Bank of Nueva Caceres in Naga City.

All 15 banks were put under receivership by the BSP in December and the PDIC was directed to facilitate the settlement of the claims by depositors beginning with the examination of accounts.

Without external assistance, Nograles said it could take the PDIC until August to September to settle all the claims whereas hiring an external auditor could cut down the processing time to several weeks.

Nograles said the deposit claims that the PDIC needed to process consisted of over 133,000 individual deposit accounts from the 15 banks that were shut down in December 2008 alone.

 “According to the auditing firms we have talked to, it would take them two to three weeks to finish examining these accounts,” Nograles said. “By ourselves, it would take us until September.”

According to Nograles, about 62 percent of the deposit accounts involved in the closure of the 15 rural banks were accounts with P100,000 and below. The rest, he said, were over P250,000.

Nograles said that about P7 billion of the estimated P14-billion claims that the PDIC expects to pay would be offset by its regular collections from deposit insurance premiums paid by banks.

“In broad strokes, this means we will be about P7 billion less when we pay down these claims,” he said.