Bulacan bank closure triggers withdrawal from other cooperative banks
By Carmela Reyes-Estrope
Inquirer Central Luzon
3:08 pm | Friday, June 7th, 2013
CITY OF MALOLOS, Bulacan-—The recent shutdown of a cooperative bank here
has triggered a sudden withdrawals of money from other cooperative
facilities, a Bulacan official reported.
Board Member Michael Fermin, chair of the provincial board's committee
on cooperatives, said the May 23 foreclosure of the Cooperative Rural
Bank of Bulacan (CRBB) due to insolvency may have panicked some
depositors of other multipurpose cooperative banks.
There are 8,000 cooperatives in the province offering some form of
banking services.
"We have heard of incidents of huge withdrawals by depositors in other
cooperative banks," Fermin said, adding that this has compelled the
committee to set a meeting with officers and representatives of these
cooperatives to evaluate their condition and to set up measures that
would prevent a bank run.
The committee also plans to provide the cooperatives with a detailed
background on CRBB because "they should know how CRBB has collapsed," he
said.
He said an understanding of CRBB's financial operations may help the
cooperatives fix their own operations.
According to Fermin, CRBB invested in real estate mortgaged by Bulacan
clients, which turned out to be less valuable than earlier appraised.
However, some cooperative banks told the Inquirer that they had not
experienced the problems that have drawn the attention of the provincial
board.
Gregoria Simbulan, president of the Bulacan Chamber of Commerce and
Industry (BCCI), said the CRBB foreclosure reveals the apparent
vulnerabilities of cooperative banking.
"The BCCI calls on the Bangko Sentral ng Pilipinas to review its
regulatory framework over cooperative banks and other smaller banks,"
she said.
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