Recent bank closure impact negligible

The series of bank failures in recent months do not worry the monetary authorities.

“The closure of AMA Rural Bank of Mandaluyong Inc. and Maximum Savings Bank Inc. are not expected to adversely affect the Philippine banking system considering their relatively small size,” the Bangko Sentral ng Pilipinas (BSP) said.

“As of 30 June 2019, their total assets are equivalent to only 0.02 percent and 0.002 percent, respectively, of the total assets of the banking system,” the central bank added.

According to the BSP, the banking system remains “sound and stable” and equipped with ample liquidity and high level of capitalization.

“(The) BSP continues to promote good governance among its supervised institutions to ensure the soundness of the banking system and to protect the interest of the banking public,” it said.

Earlier, the central bank ordered the closure of the two lenders and placed them on Friday under the receivership of the Philippine Deposit Insurance Corp. (PDIC).

This made the two lenders the 10th and 11th lender to be shut down this year by the central bank.

“The (PDIC) has been designated as receiver with a directive to proceed with the takeover and liquidation of the aforementioned (banks),” BSP Deputy Governor Chuchi Fonacier said.

The PDIC took over the lenders’ assets, records and affairs on 8 November 2019.

AMA Rural Bank of Mandaluyong Inc. is a 13-unit rural bank with branches located in Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, Baguio, Cagayan and Leyte. Record show the bank has 8,434 deposit accounts reaching P1.4 billion, the bulk of which were insured deposits.

Thrift Bank Maximum Savings Bank Inc. on the other hand, was headquartered in Poblacion, Batangas and has 24 branches located in Alabang, Taguig, and Oriental Mindoro.

According to the PDIC, depositors with valid accounts of P100,000 and below are eligible for early payment and need not file for deposit insurance claims, except if they have outstanding obligations with the closed bank or acted as co-makers of obligations.