HIGH RETURN MEANS HIGH RISK...THANK YOU LBC BANK

Earning a degree that is much related with Business and Banking, I would definitely say that I am fully aware about the proper way of handling my own money, but now, I'm not quite sure about that! This morning I found myself  as one of the many anxious faces at LBC Bank Olongapo City Branch. If you have been reading the newspapers or been watching the news lately, you already have a clear idea what am I talking.

OK let me walk you through the mechanics of this thrift bank and of what just took place. LBC Development Bank is a unit of LBC Group which has 20 branches nationwide. It's head office is located at JP Rizal Street in Makati City. Juan Carlos Araneta is the chairman of this bank, while Marvin Ayende is the acting president. The bank was already ordered closed by the Bangko Sentral ng Pilipinas over the weekend. It was deemed insolvent because it could no longer sustain its operations and obligations to its depositors and debtors. PDIC or Philippine Deposit Insurance Corporation took over the assets and liabilities of LBC bank after the Monetary Board of the central bank determined that the institution was plagued by liquidity problems.

I only heard about the story last Monday, shocked but pretty optimistic I rushed to the bank immediately the next day. We were informed regarding the return of our deposited money, but were not fully satisfied or enlightened. We're also told that depositors, whose account balances are P10,000 and below and without outstanding loans, will no longer be required to file their claims. The bank will mail the checks directly to their registered address. Those who have balances above P10,000 and those with outstanding loans, need to file their claim. Another thing, under PDIC rules, deposits worth P500,000 or below are covered by insurance. Deposits in excess of the amount may or may not be paid depending on the amount to be raised from the liquidation of a closed bank’s assets, yaiks! So if we're sharing the same city and current situation I am right now, be sure to come tomorrow morning (9:00 am)  for the "Depositor's Forum" at Rizal Triangle Multi-Purpose Center (infront of the Police Station.)

Before I end tonight's post let me share some words of hope from the statement released by PDIC, “PDIC assures the public, particularly depositors of the LBC Development Bank, that the corporation will pay all valid accounts and deposit insurance claims as soon as possible.”