The Department of Justice (DOJ) resolved to file charges against the Branch Manager and Bookkeeper of the closed Rural Bank of Sta. Barbara (Pangasinan), Inc. (RBSBI) for violation of Republic Act No. 3591, as amended, also known as the PDIC Charter. The PDIC had earlier filed charges against Lydia Cruz and Sheila Geslani, former Manager and Bookkeeper of RBSBI-Calasiao Branch, respectively, for creating fictitious deposits and engaging in unsafe and unsound banking practices, in relation to the falsification of commercial documents.

RBSBI was ordered closed by the Monetary Board on November 16, 2007. The Bank’s Head Office was located in Poblacion Sur, Sta. Barbara, Pangasinan. It had six branches, namely: Urdaneta City, Mangaldan, Tayug, Sta. Maria, Asingan and Calasiao, all in Pangasinan.

Based on the PDIC’s complaint, the respondents falsified bank documents by creating fictitious deposits for the late Manuel Concepcion to allow the depositor to circumvent the maximum deposit insurance coverage, which was P250,000 at the time the bank was closed. The complaint further alleged that in implementing the said scheme, respondents made it appear that withdrawals were made against Concepcion’s Special Savings Deposit (SSD). At the same time, the accounts were opened in the names of several persons emanating from Concepcion’s accounts. These supposed depositors later denied ownership of said deposit accounts.

Cruz and Geslani denied the allegations and their involvement in the splitting of Concepcion’s account but admitted to having knowledge of the instruction made by Concepcion.

The PDIC continues to pursue legal actions against bank officers and personnel who engage in unsafe and unsound banking practices and endanger the hard-earned funds of depositors. Recently, the PDIC filed estafa charges with the DOJ against 88 depositors of the failed Legacy banks and the branch manager of a bank for defrauding the government by as much as P97.73 million by misrepresenting themselves as the owners of certain deposit accounts for the purpose of circumventing the deposit insurance law. The DOJ has ordered the respondents to submit their counter-affidavits to the estafa charges on or before February 15, 2013.

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The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing permanent and continuing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.