The state deposit insurer is putting up 118 automated teller machines (ATM) for sale next month as it liquidates assets seized from banks that were ordered closed by regulators.
The Philippine Deposit Insurance Corp. (PDIC) said the ATMs are worth at least a combined P20.9 million, and would be sold on an “as-is, where-is” basis.
“Under the ‘as-is, where-is’ basis bidding, prospective buyers are enjoined to physically inspect the ATMs, and examine and verify their condition, before submitting their bids,” the PDIC said.
The auction will be held on Dec. 3 at the PDIC’s office in Makati.
The PDIC said it would only receive sealed bids from direct buyers at the bidding venue. No extension will be given for the submission of bids.
“Bidders are advised to come at least one hour prior to the opening of bids to register and submit the requirements,” the PDIC said.
All bids must be accompanied by a bond or deposit equivalent to at least 10 percent of the submitted bid in the form of Cash or Manager’s or Cashier’s Check issued by a universal or commercial bank, the insurer said.
The winning bidder will be required to pay the balance of the bid price not later than Dec. 12, 2013.
The regular conduct of public biddings of closed banks’ assets is in line with the PDIC’s strategic direction of expeditious disposal of non-financial assets as outlined in PDIC’s medium-term Roadmap to 2016.
This is also in support of PDIC’s mandate as liquidator of banks closed by the Monetary Board. The BSP’s policymaking board has ordered the closure of 17 rural banks since the start of the year.
The PDIC converts the closed banks’ assets into cash either through public biddings or negotiated sale to maximize recovery and facilitate distribution of assets to benefit the closed banks’ uninsured depositors and creditors.
All deposits in closed banks are insured by the PDIC up to P500,000. Any amount in excess of this ceiling will have to be paid out using the proceeds of the sale of the assets of the closed bank.
Banks are closed down by the Monetary Board for various reasons. Some banks are closed due to the refusal of their management to implement certain reforms. Others are shuttered if they are unable to service withdrawals by their depositors due to a shortage in liquidity.
To prevent the closure of banks, particularly in the rural banking sector where most institutions are family-owned, the BSP and the PDIC in 2012 introduced the Strengthening Program for Rural Banks (SPRB)-Plus.
SPRB-Plus enhanced incentive scheme offers a variety of financial and regulatory relief and perks to improve the prospects for success of new banking partnerships. Under the program, financial assistance may be granted by the PDIC to augment capital shortfalls and attract new investors.
The BSP also offers the more liberal approval of new branches for commercial, thrift and rural bank that step forward as “white knights” for weaker banks. In the original SPRB, only strong rural banks were allowed to act as white knights of other rural banks and with a more limited incentive package.