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Bank of Cebu closes

First Posted 05:43:00 09/02/2006

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OVER 8,000 depositors were left out in the cold yesterday when the Bank of Cebu was suddenly shut down following a declaration of bankruptcy.

The closure affected its main branch in downtown Cebu City and six branches in Metro Cebu.

A crowd of anxious depositors milled outside the main branch in Osmeña Boulevard and Manalili Streets, unable to enter the doors to withdraw their money. They were assured that money claims could be filed up to P250,000 per individual but it was not clear how long the process would take.

Some women depositors were crying.

?Beinte tawon na nako ka tuig nga tinigom (I?ve been saving for 20 years),? said one retired female teacher whose deposit reached more than P400,000.

Some shouted in anger at security personnel who prevented them from entering.

?Klaroha ni ninyo. Inyo ba ming bayran?? (Tell us straight. Are you going to pay us?)? said one man with a savings account of P50,000.

The crowd calmed down when a representative of the Philippine Deposit Insurance Corp. (PDIC) Benefico Magday told the crowd they would all be paid.

?Huwag kayong maaabala, mababayaran kayong lahat ng PDIC (Do not worry. All of you will be paid by PDIC), ? he said.

A team of 80 from the PDIC arrived Thursday night to begin an inventory of the bank?s assets and take over all transactions.

The Monetary Board of the Bangko Sentral ng Pilipinas issued Resolution No. 1090 declaring the Bank of Cebu ?insolvent? and having insufficient capital to continue operations.

The takeover shocked even bank staffers, who said they had no forewarning of the shutdown. About 100 employees worried whether they still had secure jobs.

?We were shocked. When we arrived, the PDIC personnel were already there waiting for us,? said a female employee of the Bank of Cebu MEPZ branch in Lapu-Lapu City.

The Bank of Cebu started operations in 1961. Its chairman of the board is Rodolfo Sabater.

Branches exist in Carcar town, Tabunok in Talisay City, Mandaue City, two in Lapu-Lapu City including the MEPZ branch and Consolacion town.

With the closure, the bank is now under receivership of the PDIC, said Francis Hortelano, supervising information specialist of the depositors assistance bureau of PDIC from Manila.

The bank management has not yet issued an official statement.

It has 90 days to submit a rehabilitation plan to the BSP. If that fails, the bank will be permanently closed, and its employees terminated. For now, the employees are still asked to report for duty.

?What we are trying to do now is to examine the deposit records, come up with the master list of deposits as soon as we can, and then start the payment of insured deposits to all depositors as soon as we can,? said Hortelano.

Depositors were assured they could file money claims to recover their deposits for amounts insured at a maximum of P250,000 per individual, but it wasn?t clear how long the process would take.

Almost 98 percent or 7,703 depositors fall under this category. A total of 167 depositors who comprise the remaining two percent, have deposits over P250,000.

?By next week, we are encouraging the depositors to call us or visit us. They can be paid in the bank where they have deposited their money,? said Hortelano.

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