May the PDIC make good its word soon

The depositors of the closed rural banks in Cebu and elsewhere – the Legacy Group and the Rural Bank of Subangdaku (RBS) – that are under receivership have long been left hanging with regard to their hard-earned deposits.

Smattering news items filtering now and then were neither encouraging nor consoling, as the Central Bank, or the Philippine Deposit Insurance Corporation (PDIC) as its receiver of the affected rural banks (RB), had been muted with info updates, especially as regards RBS.

The Legacy Group bankruptcy, including that of the Countryside Rural Banks in Liloan and Consolacion as branches, has generated discussions as regards their big investors – usually double-your-money pyramid stakers – obviously beyond the PDIC-covered deposit of P250T per depositor. But as to the smalltime depositors within the PDIC-guaranteed range, there now appears positive action by PDIC to start paying the P100T or less savings deposit.

Meantime, both chambers of Congress have probed the Legacy Group fiasco “in aid of legislation”, as usual. Should Congress have to earn “pogi” points on that lame pretext, let it be no bar for PDIC to pay the depositors their legal due now.

Likewise, while the Department of Justice (DOJ) is still indecisively forming a panel of investigators into the Legacy Group’s wide-ranging investment schemes, that is, on what charges to file, if any, against Legacy top man Celso delos Angeles and cohorts, again, the CB, SEC, and PDIC have to act without further inaction and delay on remedial steps incident to their functions to protect the public.

Incidentally, in the on-going hearings in both chambers of Congress, as usual, the solons appear to be at loggerheads as regards their position. In fact, like the CB, or the DOJ, or the SEC, it appears that almost everybody is at sea or in quandary whether or not Legacy boss Delos Angeles and company have violated any law on their “double-your-money” scheme come-on, for one, to the Legacy depositors and/or investors.

As typified by Congressman Luis Villafuerte’s uncertainty, did the Legacy Group commit any criminal offense against their clients in the various transactions that banked on promised excessive and extraordinary return of investments (ROI)? Or, if no specific legal fiat has been transgressed, could Legacy claim the general provision of obligation and contracts arising from mutual agreement of the parties?

The emerging suggestion to increase the compulsory PDIC coverage to a maximum of P500T per depositor, appears to be irrelevant at the moment. Definitely though, it’s a food for thought henceforth as increased protection of banking clients.

What is of moment or immediacy of action is for PDIC to make good its word sans delay. Everyday’s delay is a gnawing erosion of the people’s trust and confidence in the banking system; and, where there’s no trust and confidence, the entire banking system becomes dangerously vulnerable.

Hence, not only depositors of the Legacy Group RBs numbering 10 units nationwide, but also those of the RBS of Mandaue comprising 7 branches have to be bailed out fast. They are virtual powder kegs to detonate should the authorities continue to go slow like a snail.

At least, with PDIC making its promise to start paying soon, the depositors concerned may still enjoy the spirit of love this St. Valentine’s day.

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