Shuttered AMA Bank to finally pay depositors
After years of waiting, depositors of the shuttered AMA Rural Bank of Mandaluyong Inc. may finally recover their funds, after the lender reached a “compromise” agreement with banking regulators that ends a long-running dispute over the legality of its 2019 closure.
In a statement on Monday, the Bangko Sentral ng Pilipinas (BSP) said it had agreed with AMA Bank to “mutually and amicably” resolve their disputes “fully and comprehensively,” and advised depositors, creditors and other clients to submit their claims for payment and direct all inquiries to the bank.
Under the agreement, AMA Bank, a 13-unit rural bank, will remain under the BSP’s regulatory jurisdiction to ensure its implementation.
Asked to clarify the terms, the central bank declined to disclose the concessions made by either side, citing the confidentiality of the deal.
All valid deposits and claims will be paid up to the maximum deposit insurance coverage of P500,000. The expanded coverage of P1 million per depositor per bank—which applies prospectively from March 15, 2025—will not cover this case.
The state-run Philippine Deposit Insurance Corp. (PDIC), which insures bank deposits, took over AMA Bank in November 2019 after the Monetary Board ordered its closure.
Aguiluz
The lender was the banking arm of the AMA Group of Companies, founded by businessman Amable Aguiluz and was the country’s fifth-largest rural bank by capital at the time.
AMA Computer College Inc. and First Women’s Credit Corp. also held shares in the bank.
Regulators cited a range of violations, including the granting of irregular or questionable loans, transactions that conferred unwarranted benefits on directors, officers and related parties, and accounting entries that resulted in the misstatement of accounts.
But in a March 1, 2023, resolution, the Supreme Court said the Monetary Board’s order to close and liquidate the bank was “unwarranted” and “too harsh,” ruling that it was not based on the grounds provided by law.
The high court, which upheld an earlier Court of Appeals decision halting the closure, also pointed to “the tangible efforts” on the part of AMA Bank to comply with the directives of BSP. The central bank filed a second motion for reconsideration in August 2024, despite the finality of the high court’s decision in May 2024.
The legal dispute, in turn, delayed the recovery of depositors’ funds. As of June 2019, the bank had 8,434 deposit accounts with total deposit liabilities of P1.4 billion, of which 92 percent, or about P1.3 billion, were insured.
“However, we can confirm that as a result of this compromise agreement, AMA Bank will service the claims of depositors, creditors and other clients,” the BSP said.
