PDIC rejects 3,203 Legacy deposit claims

MANILA - State-owned Philippine Deposit Insurance Corporation (PDIC) said Tuesday that it has outrightly denied 3,023 claims from Legacy rural bank clients.

In a statement, the deposit insurer said these were claims for deposit accounts that are not reflected in the masterlist of deposits. PDIC's list of deposit account holders were based on existing accounts at the time of the insurer's takeover, which was immediately after the 12 Legacy rural banks declared bank holidays.

Based on senate investigations and cases filed by regulators at the Department of Justice, depositors were enticed with higher-yielding financial products or through aggressive marketing promotions that offer non-cash incentives for deposits. The Legacy Group acquired public funds and moved them around through a web of companies engaged not just in rural banking, but also in pre-need, credit cards, motor vehicle sales, realty, among others.

The Bangko Sentral ng Pilipinas has referred to these as "unsafe and unsound banking practices."

“If these accounts are not legitimate deposits maintained in the Legacy banks, PDIC has no legal obligation to pay these deposit insurance claims,” PDIC president Jose Nograles said.

So far, the claims against non-existent Legacy bank accounts compose just about 2.8 percent of the 107,648 deposit claims filed as of June 5, 2009.

PDIC said they encountered claims against non-exisiting accounts in all the 12 Legacy-affiliated banks. The Laguna-based San Pablo City Development Bank had the highest number rejected claims at 1,441.

PDIC has also filed several syndicated estafa cases against Legacy owner Celso de los Angeles and other officials at the Department of Justice.



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