PNB has reasons to be worried
Pre-Semester Non-Lecture Analysis 45
If I were PNB Baguio I would be afraid. I would be VERY afraid. They allowed a third party to withdraw ONE MILLION PESOS from an account of a depositor—BENECO—without even informing the depositor except after the fact. Their only basis is unilateral representation through certification issued by the very entity making the representation. A circular self-voucher which is considered anathema in all books of sound banking practice.
The Bangko Sentral ng Pilipinas, working closely with the Anti-Money Laundering Council, have imposed on all Philippine banks the strict policy standard called “Know Your Client” (KYC). I am aghast that PNB Baguio totally set aside this gold-standard banking rule just to bend over and accommodate an impostor bearing a letter printed on some official-looking government stationery. You’d think this kind of thing only happens in the movies.
But why would I be very afraid? Because only five years ago, in 2016, the BSP’s Monetary Board slapped on RCBC the biggest penalty ever in Philippine banking history, get this—ONE BILLION PESOS—for approving a hasty withdrawal from an account that a third party claimed to have the authority to withdraw from, when in fact the account held state funds diverted from the Bank of Bangladesh.
Of course, several heads rolled at RCBC, which had toiled for years to nurse the brand of the Yuchengco Group, only to suffer the biggest embarrassment in international banking because of the indiscretion of a handful of negligent managers. I don’t have the luxury of space in a Facebook post, but Google keeps all the molecular details of that blue-collar heist. The fine levied on RCBC deviated sharply from the BSP’s standard practice of only imposing a nominal fine of P30,000 per violation per day on banks found to have violated banking regulations.
The explanation is that this cavalier attitude of treating a deposit as merely an asset on paper, instead of a sacrosanct CONTRACT between two –and only two—parties erodes public confidence on the banking system, posing an existential threat to the very system of value exchange that underpins the very mechanisms that drive an economy.
Heavy words—not mine, by the way—but totally apropos given the implications on every depositor, like you and me.
Imagine if your bank tells you, “ma’am/sir may nag-withdraw po ng P1million sa account ninyo, e hindi po namin mahindian kasi ang dami po nilang pinakitang kung anu-anong documents.”
Seriously?
Now you understand why I said if I were PNB, I would be very afraid. The thing about corporate accounts is that it should never be affected by corporate intramurals. Boards of Directors of corporations all over Makati—in fact, all over the world—quarrel all the time. But have you ever heard of a bank stepping in the middle of these corporate storms and handing the corporation’s money to the group of directors it “likes”? That would make banks more powerful than courts. And that’s one more thing: when it comes to encroaching on its turf, you don’t want to mess around with courts, believe me. That’s why banks are notorious for never lifting even a finger WITHOUT A COURT ORDER.
So apparently it’s not only MCO’s that have balls the size of cantaloupes. It seems PNB Baguio can give them a run for their money—pun totally intended.
The author is a writer and lawyer based in Baguio City, Philippines. Former editor of the Gold Ore and Baguio City Digest, professor of journalism, political science and law at Baguio Colleges Foundation (BCF). He is a photographer and video documentarist. He has a YouTube channel called “Parables and Reason”