BSP sleeping on anomalies involving rural banks

Is the Supervision and Examination Sector (SES) of the Bangko Sentral ng Pilipinas (BSP) sleeping on the job or is it so emasculated it just lets rural banks make their own self-examination and tell BSP they’re ok?

On Sept. 15, 2011, a certain party complained to the SES that a rural bank in his town made a series of debit transactions on his account without authority, including four described in the debit memo as “No transaction involved.” He mentioned weak internal control and possible illiquidity as probable causes for the nine-day delay in effecting their requested to another bank. The rural bank concerned has not taken any action on his demand for reimbursement.

The reply he got,  dated Oct. 6, 2011, simply said that they (the SES) had forwarded his letter to the president of the bank concerned, together with a request to send to the complainant, copy furnished to them, “its comments and/or action taken thereon.”

Is this why several rural banks have failed?  Is this why some rural banks became victims of smart operators? This is a growing menace to unsuspecting rural bank depositors, most of whom are market vendors.

Was  the recent resignation of Jose Nograles as president of the Philippine Deposit Insurance Corporation, which have paid off billions of pesos in insured deposits of failed banks, a consequence of the inefficiency of the BSP?

If the SES cannot perform as it should, I suggest that its functions be transferred, if this is legally feasible, to the Commission on Audit, which has become more credible under the Aquino administration.

—AMADO F. CABAERO,

amacabsenior1

@yahoo.com