PDIC: Clients of closed banks pay loans with us

People, companies, and associations needing to settle money owed to banks that have been closed should settle their obligations with government-owned Philippine Deposits Insurance Corp., not with the owners and officers of those troubled financial institutions, PDIC said Monday. PDIC, in cooperation with Bangko Sentral ng Pilipinas, usually stands as liquidator of closed banks. Its president, Jose Nograles, said in a statement that reports have reached him that former owners and officers of some banks that have been closed for some time are approaching borrowers and trying to collect loan payments. "Borrowers are advised not to make such payments," Nograles said. “Loan payments made directly to former owners or officers of the closed banks or any persons other than authorized PDIC Representatives are not considered valid payments. Hence, these loans will be considered unpaid and still outstanding," Nograles said. He advised borrowers deal only “with the PDIC deputy liquidator..." or else “their payments will not be honored as loan settlement," and warned that, “We will also not release the collateral." No longer authorized Officers, employees, agents, and representatives of closed banks are no longer authorized to transact business or enter into any contract in behalf of their respective bank once the PDIC has taken over troubled banks, according to the PDIC chief. He encouraged also borrowers to report former owners and officers of closed banks collecting and demanding loan payments. This year, PDIC has taken over the operations of eight banks and placed them under receivership. These banks are the Rural Bank of Manjuyod (Negros Oriental) Inc., GMA Rural Bank of Cavite Inc., Rural Bank of Bingawan (Iloilo) Inc., Rural Bank of Mapandan (Pangasinan) Inc., Rural Bank of Norzagaray (Bulacan) Inc., Rural Bank of Zapote (Las Piñas City) Inc., Ibalon Rural Bank (Tabaco, Albay) Inc., and Rural Bank of Baler (Aurora) Inc. Latest Bangko Sentral data showed the number of banks operating in the Philippines was 764 as of end-September last year from 797 as of end-September 2009. The number of banks declined because of mergers and consolidations, and weaker players exiting the banking system, the central bank said. — VS, GMA News