PDIC starts paying small EIB depositors

MANILA, Philippines—The Philippine Deposit Insurance Corp. (PDIC) said it would start paying Tuesday small deposits placed in Export & Industry Bank, which the central bank ordered closed last month.

In a statement, PDIC said depositors with accounts of P10,000 and below could expect to receive deposit insurance payments starting Tuesday through postal money orders. Mailing of payments for small deposits is expected to be completed by June 1, it added.

“The initial batch of deposit insurance payments is for holders of accounts who have no outstanding loans with EIB and who have updated their addresses with the bank in the past year. These account holders were not required to file deposit insurance claims,” PDIC said.

There are 29,314 bank accounts in EIB with deposits of P10,000 or below, said PDIC, citing results of its evaluation of the records of the closed bank.

Under PDIC rules, clients of closed banks with accounts of P10,000 or less, as long as they do not have unpaid loans, will be automatically paid by the state insurer.

Those with deposits worth more than P10,000 must file insurance claims.

Under the law, deposits of P500,000 or less are covered by deposit insurance. Any amount in excess of P500,000 may or may not be returned depending on the amount to be raised by PDIC from the sale of the remaining assets of the closed bank.

Clients of the closed EIB with deposits worth at least 10,000 may expect to have their deposit insurance claims serviced starting June 19.

“The exact schedules (of payments) per branch and the venues will be announced through notices to be posted in the bank premises and other public places, and through the PDIC website (www.pdic.gov.ph), newspapers and radios,” PDIC said.

PDIC was shut down by the Monetary Board of the Bangko Sentral ng Pilipinas last month amid reports of insolvency.

The Monetary Board said the bank had to be closed “on account of its inability to meet its obligations as they become due, insufficient realizable assets to meet its liabilities and its inability to continue business without involving probable losses to its depositors or creditors.”

The central bank said the decision to close EIB came after the bank issued a notice stating its intention to go on a bank holiday.

EIB has 50 branches that carried P14 billion in deposits.

The bank was headed by its president Jaime Gonzales and chairman Juan Victor Tanjuatco.

According to a disclosure it made earlier, EIB posted a net loss of more than P700 million in the first three quarters of 2011.