COFFEE time with friends Bong Gustilo and Melvin de Leon the other day saw us lamenting the sudden closure of Valiant Bank on the pretext that a certain Wilky had absconded with depositors’ money.
The Bangko Sentral ng Pilipinas had named Valiant as the fourth lender to shut down this year. It has its main office in Iloilo City and eight branches elsewhere within Western Visayas
While it’s true that the state-run Philippine Deposit Insurance Corp. (PDIC) as receiver is obliged to indemnify depositors, the amount refundable is limited to P500,000. Hence, richer depositors could die of heart attack.
Public confidence in the high-tech banking system has ironically diminished. A few months ago, two big banks reaped public outrage due to “glitch” and “scheming”.
That of Banco de Oro was one of failure to safeguard certain ATM units from thieves who had installed “scheming devices” thereat, allowing them to duplicate depositors’ ATM cards.
Murphy’s Law – “Whatever can go wrong will go wrong” – would further erode public distrust in the banking system. Such distrust is exacerbated by the banks’ inability to appease offended clients.
I once cited the case of a retired Department of Environment and Natural Resources (DENR) employee. I recalled that on August 9, 2015, Bernardita Lerio tried to withdraw cash at the Landbank ATM (Plaza Libertad branch, Iloilo City). Instead of dispensing cash, however, the machine “ate” her card. That day being a Sunday, there was no personnel except the security guard who asked her to come back “tomorrow na lang.”
She did come back and got back her card but was unable to withdraw because her presumed balance of P26,000 had diminished to only P63.73. Obviously, an unknown “magician” had withdrawn her money. Suspecting “inside job,” she sought the help of the bank manager. To this day, however, she is still supplicating to regain her money.
No wonder then that despite massive advertising and promotion, Philippine banks fail to maximize the number of their depositors. According to the Bangko Sentral ng Pilipinas, only 10 million Filipinos, or roughly 10 percent of our population, maintain bank accounts.
One does not have to be a glitch victim to realize the risk of “growing” money in a regular savings account that does not earn attractive interest but, on the contrary, melts down due to “penalty” whenever it falls below the required minimum deposit.
Interest on regular savings account is unattractive at a measly 0.75 to 1 percent per annum. As if this were not bad enough, this meager interest is slapped a withholding tax. Therefore, “savers” don’t really save but lose money – more so because of periodic rise in prices of prime commodities.
Moreover, savings account clients who fail to deposit or withdraw in two straight years are on the losing end. They are slapped a “dormancy fee” of P30 or more per month.
Little do ordinary depositors realize that they lend their hard-earned money to the bank, which in turn lends it to big businessmen for much higher interest.
On the other hand, when the same clients apply for loan, banks tend to turn them down due to lack of collateral, short of saying, “We don’t trust you.”
So, can we still trust the banking system now that it has failed to protect depositors? It is no longer possible to count in one’s fingers the banks that have folded up, leaving their depositors at the delayed mercy of the PDIC.
Closure, however, does not always mean disaster for the bank itself, as in the case of one whose sister company – the “hari ng padala” – has prospered by leaps and bounds. (hvego31@gmail.com/PN)
