Another bank goes belly up, this time it's the Export & Industry Bank. More than 50,000 of its depositors all over the Philippines were caught by surprise by the sudden bank holiday. The bank owes its clients about Php800Billion and it only has about Php200Billion in assets. Its clients suddenly rushed to the various branches of the said bank in the hopes of being able to withdraw some cash for their basic needs but they were all greeted by closed offices. Notices of a bank holiday posted in front of the banks welcomed the poor clients and to their dismay, no bank employees went out to explain what had happened.
Now that really sucks! Every time clients or prospective patrons go to an establishment the employees are so eager to greet and serve you. It could be a bank, an appliance center, a car dealer, etc. a potential customer is always welcomed with open arms and you are at all times assured of their best quality products or services. The employees or sales representatives are so warm and friendly that you are convinced in no time to buy or avail of their services.
But when problems start to bug their products or if something goes wrong with them like what happened to the Export & Industry Bank, the owners simply leave you out to dry. The hard earned money that you have entrusted them suddenly can't be withdrawn. Most of the clients complained about the banks previous assurances that it is in good financial status a few days ago and some of these clients had just opened new accounts and now it's closed. Oh crap, there goes your cash!
A few of their depositors couldn't stop themselves from crying, most of them said all their savings were in that bank. Another said he there to withdraw money for a medical emergency but was shocked to find that the bank have closed for good. Now that is really devastating news, what if it was a life and death situation and the patient dies due to lack of funds to buy medicines?
It's always the same things that happen in our country, rich businessmen putting up banks to assure clients that their savings will be in good hands and when the people hand over their money, a couple of years later the bank goes kaput! Could it be that the bank owners are doing this on purpose? Putting up banks to collect money from clients and then investing that money into their other businesses then they let those banks go insolvent? Remember, it's the Philippine Deposit Insurance Commission (PDIC) that pays the clients of these banks and then sell the banks assets.
The PDIC said it will pay the bank clients who have not more than Php500,000 immediately but it's the folks that have more than Php500K that's in trouble. They would have to wait for all of the banks assets to be liquidated and then they would have to share that among themselves or something like that. It's always the poor folks that get screwed by the rich......
Now that really sucks! Every time clients or prospective patrons go to an establishment the employees are so eager to greet and serve you. It could be a bank, an appliance center, a car dealer, etc. a potential customer is always welcomed with open arms and you are at all times assured of their best quality products or services. The employees or sales representatives are so warm and friendly that you are convinced in no time to buy or avail of their services.
But when problems start to bug their products or if something goes wrong with them like what happened to the Export & Industry Bank, the owners simply leave you out to dry. The hard earned money that you have entrusted them suddenly can't be withdrawn. Most of the clients complained about the banks previous assurances that it is in good financial status a few days ago and some of these clients had just opened new accounts and now it's closed. Oh crap, there goes your cash!
A few of their depositors couldn't stop themselves from crying, most of them said all their savings were in that bank. Another said he there to withdraw money for a medical emergency but was shocked to find that the bank have closed for good. Now that is really devastating news, what if it was a life and death situation and the patient dies due to lack of funds to buy medicines?
It's always the same things that happen in our country, rich businessmen putting up banks to assure clients that their savings will be in good hands and when the people hand over their money, a couple of years later the bank goes kaput! Could it be that the bank owners are doing this on purpose? Putting up banks to collect money from clients and then investing that money into their other businesses then they let those banks go insolvent? Remember, it's the Philippine Deposit Insurance Commission (PDIC) that pays the clients of these banks and then sell the banks assets.
The PDIC said it will pay the bank clients who have not more than Php500,000 immediately but it's the folks that have more than Php500K that's in trouble. They would have to wait for all of the banks assets to be liquidated and then they would have to share that among themselves or something like that. It's always the poor folks that get screwed by the rich......
Congress should enact stricter banking laws to avoid this kind of problem. as a foreigner and reading this, i would think twice before investing in the Philippines. Thus, alarm bells are ringing in my head. don't you agree?
ReplyDeleteYes, I agree but the problem is not on enacting or making stricter laws. The Philippines is already full of strict laws. The problem lies on enforcing them on the rich and powerful people.
ReplyDeleteThe Political Leaders in the Philippines need Political Will and of course, lesser Greed.... Thanks for your comment. :)