AMA Rural Bank gets TRO on closure order by PDIC

MANILA, Philippines — AMA Rural Bank of businessman Amable Aguiluz has obtained a temporary restraining order (TRO) preventing the Bangko Sentral ng Pilipinas (BSP) and state-run Philippine Deposit Insurance Corp. (PDIC) from further implementing a closure order issued early this month.

The Court of Appeals (CA) issued the TRO last Nov. 26 after major shareholders of the shuttered rural bank questioned the issuance of Resolution 1705D by the  Monetary Board on Nov. 7 prohibiting AMA Rural Bank from doing business in the country.

In a statement, PDIC president Roberto Tan said the state-run deposit insurer is now constrained to stop its liquidation operations in the closed rural bank for a period of 60 days.

 “We assure our depositing public that the PDIC’s paramount commitment is to expedite the validation of bank records to be able to immediately pay the insured depositors of AMA Bank,” Tan said.

Tan said the agency is now pursuing legal remedies. “We have in fact resorted to alternative procedures to do just that when the TRO was issued. We appeal to the depositors for their understanding,” he said.

Tan said PDIC would advise depositors, creditors and borrowers of AMA Bank of any further developments through announcements made at PDIC’s website and through local media networks such as Facebook.

It would be recalled PDIC took over the assets and affairs of the closed bank last Nov. 8.

However, accountable directors, officers and employees refused to account for, surrender and turn over records under their accountabilities, custody and possession, despite demand.

The PDIC earlier said that the refusal to account for, surrender and turn over records would delay the payment of the claims of AMA Rural Bank’s depositors for insured deposit.

The PDIC has since adopted alternative procedures, although with great difficulty.

Faced with another setback, the TRO prevents the PDIC from further continuing the inventory-taking of bank records during the 60 days of its effectivity.

The management of AMA Rural Bank earlier questioned the closure order, claiming 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.

AMA Rural Bank is ranked 15th largest rural bank in terms of assets with P2.83 billion and fifth in terms of capital with P1.04 billion.

The Mandaluyong-based bank with 13 branches has 8,434 deposits accounts with deposit liabilities amounting to P1.4 billion. Of the total amount, about 92.06 percent or P1.3 billion are insured deposits.