LBC Bank placed under PDIC receivership

DAVAO CITY -- Kristieliza Gaite, a mother of two, got a shock of her life when she could no longer withdraw from her savings account with LBC Development Bank through its ATM machine on Anda street here on Saturday.

The machine told her it could no longer process her transaction.

When she checked with the office of LBC Bank-Anda branch, she was told they can no longer accept any transactions from depositors.

"I was shocked kasi naka-withdraw pa ako at around 3:30 p.m. nung Friday (I was shocked because I was able to withdraw money from same branch around 3:30 p.m. on Friday)," she said.

She said that the money she has with the bank is intended for the delivery of her third child anytime this month.

The Monetary Board of Bangko Sentral ng Pilipinas on Friday placed LBC Development Bank, a unit of the LBC Group, under receivership of the Philippine Deposit Insurance Corp. (PDIC).

"As receiver, PDIC took over the bank on September 9, 2011. PDIC shall gather, verify and validate all bank records and administer and preserve its assets for the benefit of all creditors," PDIC's Corporate Affairs Group said in a statement issued over the weekend.

PDIC said it took over the assets and liabilities of the thrift bank after the Monetary Board determined that the bank is plagued by liquidity problems.

"All valid accounts and deposit insurance claims will be paid as soon as possible," PDIC said in a statement, adding that updates will be issued as soon as examination and validation of accounts are completed.

As it placed the thrift bank under receivership, PDIC will conduct a series of depositors forums in areas where branches of the bank are located.

LBC Development Bank, with head office on JP Rizal St. in Makati City, has 19 branches nationwide, one of which is located in Davao City.

The schedules of the depositors forums, PDIC said, will be announced as soon as possible in the bank premises and in the PDIC website.

During the depositors forums, PDIC representatives will explain the requirements and procedures in filing deposit insurance claims.

But owners of deposit accounts worth P10,000 or below need not apply for insurance claims. In their case, PDIC will simply mail notices to them and they can withdraw from designated redemption offices, like branches of Land Bank of the Philippines.

As of June 30, 2011, LBC Development Bank had estimated total deposit liabilities of P6.09 billion comprising one tenth of one percent of the total deposits in the Philippine banking system.

Citing bank records, PDIC said Insured deposits amount to P3.73 billion. Number of accounts totaled to 321,516, 99.4 percent of these accounts are fully covered by deposit insurance.

Under PDIC's charter, deposits worth P500,000 or below are covered by insurance. Deposits in excess of the amount may or may not be paid depending on the amount to be raised from the liquidation of a closed bank's assets. (Sun.Star Davao/Sunnex)

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