PDIC rejects P204M in Legacy insurance claims

State-run Philippine Deposit Insurance Corp. (PDIC) has denied P204 million worth of claims from people duped by so-called agents of 12 affiliated banks of the Legacy Group. Most of the applicants — 3,500 claimants covering P125 million — had likely been deceived into giving their hard-earned cash to unscrupulous agents outside official banking channels, the PDIC said in a statement on Monday. The government-owned deposit insurer said it had turned down 4,175 claims from depositors of the Legacy banks as of end-January. The PDIC called on depositors to always transact business inside bank premises and with authorized bank personnel, or risk nonpayment of deposit insurance in case their banks fail. "This came on the heels of recent complaints received against unauthorized activities of certain individuals, purportedly bank employees, directly soliciting bank deposits from the public outside bank premises," it said. "If a transaction is made outside bank premises, the depositor has no way of ascertaining if the funds actually flowed into the bank and if the transaction was recorded," it added. The PDIC said it pays deposit insurance only to valid depositors. The central bank issued a circular in 2008 prohibiting transactions outside bank premises without prior regulatory approval. The PDIC said investigation by the Senate and the House of Representatives had unearthed a scheme where depositors of the Legacy banks transacted with so-called agents of the bank. But an examination of the books revealed that some funds coursed through the agents had been diverted and a number of the transactions not recorded in their books. "The PDIC had no recourse but to deny such claims in accordance with [the] law," the deposit insurer said. The 12 Legacy banks alone had deposits of around P14 billion in about 135,000 accounts. In comparison, the 17 banks closed in 2007 had combined deposits of only P1.6 billion in over 68,000 accounts. Criminal and civil cases against Legacy officials are still pending in courts. — GMANews.TV