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Bank Rehabilitation
Under the BSP Charter

REHABILITATION
of Conservatorship Receivership Liquidation

BANKS & QBs

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Conservatorship
WHENEVER A BANK/QB THE MONETARY BOARD MAY:
IS:
• Appoint a conservator to take charge
In a state of continuing of assets and liabilities

inability or • Reorganize management

unwillingness
• Collect debts
to maintain
Conservatorship a condition of liquidity. • Exercise powers necessary to restore
viability

Attempt to save bank from insolvency

• Revoke previous actions but not
perfected contracts

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How long should the

Conservator conservatorship last?
Competent & knowledgeable in • shall NOT exceed one (1) year
bank operations & management

Monthly salary guaranteed for a

When can MB terminate
year the conservatorship?
After 1 year, MB will decide if:
May be BSP-connected, but no •Institution can operate on its own Terminate and BAU
more salary
•Institution would involve probable loss to its depositors and
creditors Terminate and go to RECEIVERSHIP

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Bank Rehabilitation
Under the BSP Charter

Conservatorship Receivership Liquidation

Receivership
Summary closure to prevent probable loss
to creditors and depositors

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Receivership PDIC
want big impact?
Whenever a bank or quasi-bank: • Statutory
USE BIG IMAGEreceiver and liquidator of closed banks.

• Is unable to pay its liabilities

• PDIC takes over banks ordered closed by the Monetary
• Has insufficient realizable assets Board

• Cannot continue business without involving probable

losses to its depositors or creditors, or • Its assets are liquidated, and distributed to creditors
and uninsured depositors according to Civil Code
• Has willfully violated a cease and desist order provisions on preference and concurrence of credits

MB may close bank and appoint PDIC as Receiver

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PDIC Operations Powers of a Receiver

want big impact?
• As
USE of 31
BIG December 2018, there are 376 banks under
IMAGE
receivership and liquidation •Administer assets and liabilities of the institution as a Trustee

• In 2018, 12 banks were closed, including GSIS Family

Bank, owned by GSIS •Exercise the general powers of a Receiver under Rules of Court
(to preserve, administer and dispose properties in litigation)
• Latest bank to be closed in 2019 is the Rural Bank of
Mabitac in Laguna •Deposit or invest in non-speculative investments

• Determine in ninety (90) days whether the institution should be

rehabilitated or may resume business safely

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In the hands of a receiver, the assets of

the bank cannot be garnished, attached,
levied or executed upon.

When a receiver is appointed,

BOD and Management’s authority to conduct
dealings regarding the bank properties is
SUSPENDED

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3 Levels of Bank Rehabilitation

Powers of a Receiver Under the BSP Charter

• Determine in ninety (90) days whether the institution should be

rehabilitated or may resume business safely
Conservatorship Receivership Liquidation
• If NOT, Receiver shall file petition for liquidation

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Liquidation
Institution CANNOT be rehabilitated or
permitted to resume business
Receiver/Liquidator shall:

• File ex-parte with Regional Trial Court and a

Liquidation
Convert assets to cash, Settle liabilities and
Divide the surplus to those entitled to receive them
petition for assistance in the liquidation of the
institution
•Assist the enforcement of individual liabilities
of stockholders, directors & officers

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Liquidation summary
Conservatorship and Receivership
Winding up of corporate entity

Cannot do business except to convert assets or

collect debt

No obligated to pay interest anymore

not summary
Liquidation
Not summary requires hearings and
presentation of evidence

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Bank Rehabilitation
Under the BSP Charter

Is Conservatorship a pre-requisite for

Receivership and Liquidation? Conservatorship Receivership Liquidation

NO

Receivership Liquidation

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BANCO FILIPINO
Conservatorship - Receivership - Liquidation
1985 1991 1991 to 2004
Final and executory First Closure Ordered reopened by BF and BSP negotiating
SC; because closure was on P25 B loan
illegal; no due process
Cannot be restrained by injunction or
BF countersued for More suits
court order damages

EXCEPT upon petition of stockholders March 2011 April to August 2011 October 2011 - present
2nd Closure
representing majority of the capital
Receivership under PDIC initial payout to SH filed petition to
stock PDIC small depositors suspend liquidation
proceedings
1st - P5,000 and below
“Ponzi scheme” 2nd – P5,001 to P10,000

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Thanks!