Rural bank depositors on tenterhooks

Strong was the temptation to say, "I told you so" when, at long last, the Rural Bank of Subangdaku Mandaue main office had just shorn of its deception to lie about its cash liquidity.

Its bank holiday admission is what literary fiction dubs as anti-climactic because for about a couple of weeks, its depositors had been tortured into the nervous edge of "waiting for their calls" inre their pending withdrawal slips. But the "calls" never came, unless the RBS management did the "calls" to favored clients.

Four family members have hard-earned deposits at nigh less than the PDIC-covered maximum each, so hopefully they can get back their deposits after some frayed nerves, but when?

You see, when the Legacy Group rural banks (RB) came down with a series of bank holidays in Cebu and elsewhere, RB depositors who are mostly smalltime - and risking their nest eggs with the RB's higher returns - became panicky.

But in the case of RBS Mandaue it is doubtful if it had been "hit" by a sustained bank run, if any at all, as to imperil its cash position. You see, not only did its management come up with a virtually demulcent announcement - as in soothing assurance - of financial stability, more so that RBS is touted to be actually stable being owned/managed by a known Cebu business taipan.

What moderate bank run, if any, had been obviated when RBS floated excuses against withdrawals, capped by their "wait for our calls" ploy that aggravated their clients' worries. But which did not come until the announcement of the bank holiday.

And so, many surmise that RBS coffers haven't been depleted by any bank run. Instead, how true is the perception that management had opted to stave off funds depletion by declaring a bank holiday? Obviously, this perception could be plausible by throwing instead the tremendous headache to the PDIC? Isn't that neat, if so?

With the proliferation of RBs, there's no doubt that credit facilities are at the doorsteps of farmers, fisherfolk, and "sari-sari" type of business. But how meticulous has the Central Bank passed upon their applications to operate as RBs? And, how regular and meticulous has the CB supervised their operations, the management, and fiscal stability?

Banking experts have questioned the "can afford" penchant of RBs to offer highly enticing interests. While commercial and other banks/credit facilities only offer very measly rates, the RBs "can afford" to offer irresistible returns. Again, smalltime and medium "extra cash" clients, including retired senior citizens who are forced to make do with earnings of their limited retirement savings, would take the risk with the RBs.

It behooves the CB to conduct regular and strict visitation on all RBs nationwide to monitor their operations, steady liquidity, and the credit-debit ratio of their business with a view to maintain secure cash liquidity all the time, and vetting into the fiscal integrity of the RBs stakeholders, particularly the controlling stockholders.

With RBs getting into the red to the detriment of their smalltime depositors, something drastic has to be done by the CB. Among such steps would be the prosecution of the RB operators/management who have made a fool out of their helpless depositors.

Meantime, considering a number of RBs under receivership nationwide, it's now the call of the PDIC to facilitate that affected depositors get back their deposits as early as possible. Finally, those RBs whose prime movers are guilty of malfeasance have to be hied to court, at least to deter others who are similarly-minded.

* * *

Email: [email protected]