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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 67
TO
: The Monetary Board
Central Bank of the Philippines
In order to facilitate the liquidation of the Philippine National Cooperative Bank (PNCB), the assets of which you have already taken charge preparatory to liquidation under Sec. 29 of Republic Act No. 265, as amended, and to avoid the inconvenience, cost and delay of protracted judicial proceedings and considering that it is the responsibility of the Central Bank to administer the banking system of the Republic:
1.
You are hereby directed to undertake the
liquidation of the PNCB extrajudicially, notwithstanding the provisions
of Section s 95 to 100 of Republic Act No. 2023. In this connection, the
Director, Department of Commercial and Savings Banks, Central Bank of
the Philippines, is hereby appointed as Liquidator of the PNCB, who
shall be under your sole and direct control and supervision.
2. In the
settlement of the claims against the PNCB,
you will give preference to the uninsured deposits of the government
and private depositors, liabilities arising from fund transfers and
other liabilities, excluding the claims of the Philippine Deposit
Insurance Corporation arising from the subrogation to the rights of the
insured depositors. The liquid assets of the PNCB, amounting to P2.336
million shall be applied to satisfy all the above claims, except the
uninsured government deposits.
3. The method
of settlement of uninsured government
deposits with the PNCB described hereunder, which you have recommended,
is hereby approved.
(a)
In cases where the government depositors whose
deposits are not insured, have outstanding obligations with the Central
Bank of the Philippines or the Philippine National Bank, said uninsured
deposits with the PNCB will be assigned/transferred to either the
Central Bank or the PNB and applied as partial payment of the
obligations of said government depositors. Where the uninsured deposits
are assigned to the PNB, it, in turn, will assign the same deposits to
the Central Bank in partial settlement of the former's overdrawing with
the latter.
(b) In cases
where the government depositors whose
deposits are not insured, do not owe the Central Bank or the PNB, the
PNB will grant loans to such depositors in amounts equivalent to their
deposits, with the Central Bank granting advances to the PNB against
the depositors' promissory notes as collaterals. The government
depositors will later on assign their deposits to the PNB in payment of
their loans. The PNB will in turn assign/transfer the same deposits to
the Central Bank in payment of the latter's advances to the PNB.
Done in the City of Manila, this 24th day of March, in the year of Our Lord, nineteen hundred and seventy-three.
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