Tuesday, October 17, 2006 Bank asks for review of laws
OFFICIALS of the recently closed Bank of Cebu are urging the House Committee on Banks to review the laws placing banks in receivership, saying existing laws have flaws that could completely damage the reputation of a bank, among others.
In a letter addressed to Rep. Jaime Lopez, chairman of the said committee, Bank of Cebu said existing laws, such as Republic Act (RA) 7653, RA 8791, RA 7906 and RA 3591 are either incomplete or lack teeth in their implementation.
“It is important that these matters be immediately addressed and the applicable laws repealed or amended to put more teeth to the laws concerned and improve or stabilize our banking system to protect the public for any (untoward) circumstances,” the bank wrote.
Bank of Cebu, one of the oldest private development bank in the country, was ordered placed in receivership by the Monetary Board (MB) leading to its closure. The action was based on the results released by the examining office of the Bangko Sentral ng Pilipinas (BSP) that revealed the Bank of Cebu is allegedly in a financial crisis.
Resolution
MB’s resolution to close the bank was passed on Aug. 31 and was executed by the Philippine Deposit Insurance Corp. (PDIC) on the same day, “causing havoc and the unwarranted displacement of the depositors and the employees of the bank.”
The Bank of Cebu has refuted the findings of the BSP examining office, claiming that its financial status is strong.
Mistake
It has filed a petition for certiorari before the Court of Appeals in Cebu in an attempt to correct the mistake made against the bank and its stakeholders.
According to the bank, no provision in the existing law imposes any sanction on the members of the MB, the officials of the BSP and the PDIC, in the event that they are found to have made erroneous or inaccurate findings.
There are also no provisions that will provide utmost protection to the depositors and to the employees of a bank that will be displaced as a result of an erroneous report, resolution and application of the law.
Provision
A provision that will restore the name, reputation and goodwill of a bank, as a result of an inaccurate report, resolution and application of the law by the officials, officers or staff of the subject institutions, is also absent.
“We respectfully request yourself and your committee to look into, parallel to the case subject of the petition for certiorari, but completely separate and independent of the issues presented, probable flaws or incompleteness in the applicable laws or in its implementation that should protect, or would affect, the rights of the stakeholders of a bank, in general; its depositors and employees in particular; and, the residents and the communities that the bank serves,” the letter also read. (JBN)
