Less than a month from effectivity, the law increasing maximum deposit insurance cover (MDIC) from P100,000 to P250,000 will be applied for the first time as state deposit insurer Philippine Deposit Insurance Corporation (PDIC) took over today First Savings Bank, Inc., a small thrift bank.

The Monetary Board, in its Resolution No. 1265, ordered the bank's closure and placed it under PDIC receivership due to (1) its inability to pay liabilities as they become due in the ordinary course of business, (2) insufficient realizable assets to cover liabilities, (3) inability to continue in business without involving probable losses to its depositors or creditors, and (4) declaration of bank holiday. PDIC is mandatory receiver of closed banks.

Established in 1965, First Savings Bank with head office in E. Rodriguez, Quezon City, has three branches located in Cubao, C.M. Recto and Tanay, Rizal. As of June 30, 2004, the Bank has 10,609 deposit accounts amounting to an estimated deposit liabilities of P193.93 million. Based on the bank's latest report, almost all accounts are fully insured at the new MDIC of P250,000.

PDIC is currently conducting an inventory of assets and records of the bank. It has also started assessing and examining the bank's deposit records in preparation for the servicing of claims of insured deposits. The start of claims servicing will largely depend on status of the bank's deposit records keeping. The PDIC committed to fast track the examination of deposit records. If these are in order, PDIC will initiate payment of claims within seven (7) working days from bank closure.

First Savings Bank depositors should prepare documents supporting insurance claims for presentation as may be requested by PDIC. Information on deposit claims is available at www.pdic.gov.ph or thru the Depositors Assistance Bureau at 841-4050.