Philippine Daily Inquirer
11:53 pm | Thursday, November 29th, 2012
A person whose bank deposit amounts to P15,000 or below need no longer go through the process of filing for an insurance claim in the event of a bank closure, according to the Philippine Deposit Insurance Corp.
PDIC said it recently raised the ceiling for automatic payment of deposit insurance from P10,000 to P15,000.
Automatic payment ensures the release of deposit insurance without requiring depositors to provide documents pertaining to their accounts.
Under the automatic-payment scheme, PDIC will pay the insured amount by mailing a postal money order (PMO) to the concerned depositor.
“Depositors who have valid savings and demand deposit accounts with balances of P15,000 and below will now be eligible for outright payment without the filing of deposit insurance claims,” PDIC said.
This is the second time PDIC raised the ceiling for automatic payment of insurance claims. In March last year, PDIC raised the ceiling from P5,000 to P10,000.
By increasing the ceiling to P15,000, PDIC hopes to spare most small depositors the trouble of filing claims to recover their savings when their bank closes.
As a result, an estimated 75 percent of depositors are now covered, PDIC said.
PDIC officials decided to raise the ceiling after depositors demanded easier means to get their money bank in case of a bank closure.
Prompt payment of deposit insurance claims is one way to help keep the public’s confidence in the country’s banking sector, officials earlier said.
A significant number of rural banks have been ordered closed by the Bangko Sentral ng Pilipinas and placed under the receivership of PDIC over the past few years. Over 30 rural banks were shut down last year, and over 20 have been ordered closed so far this year.
Most banks were closed due to poor management and capital deficiency, regulators said.
But they stressed that the country’s banking sector as a whole is sound and stable.
And to further strengthen the banking sector, the BSP and PDIC have put up an incentives program to encourage healthy banks to acquire risk-prone rural banks.
Under the “Strengthening Program for Rural Banks Plus,” banks that will serve as white knights may avail themselves of loans from regulators. The financial assistance will be used to help beef up capitalization of the bank being acquired.
Moreover, white knights may also be given regulatory relief and may be allowed to put up branches even in areas where bank branching is restricted. Michelle V. Remo
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Tags: bank deposits , Business , deposit insurance claims , rural banks
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