DBPH Admin2 
AFTER three long years, the Supreme Court (SC) ruled to junk the government’s bid to keep AMA Rural Bank of Mandaluyong closed, to the elation of thousands of depositors whose money were frozen.
In a 17-page decision, SC affirmed the Court of Appeals ruling which stopped the Bangko Sentral ng Pilipinas (BSP) order, citing failure to provide legal basis for which the closure was issued.
“Indeed, the totality of circumstances reveals the tangible efforts on the part of AMA Bank to comply with the directives of BSP,” the tribunal said.
“Thus, under the particular facts of this case, coupled with the public interest involved, the closure of AMA Bank is too harsh.”
The Court of Appeals earlier ordered the central bank to restore AMA Bank to fully operational status, saying the BSP abused its discretion in issuing the closure order.
BSP however filed an appeal to the high court citing AMA Bank’s irregular and questionable loans to borrowers, questionable investments using the depositor’s money, among others.
In rendering its decision, the SC said AMA Bank can continue its business without involving probable losses to its depositors and creditors.
Under the law creating the BSP, the Monetary Board can order the closure and liquidation of a local lender if it has suspended payment of its deposit liabilities in the past 60 days, has insufficient realizable assets; cannot continue businesses without involving probable losses to depositors or creditors; and if it has violated a cease-and-desist order.
The tribunal said the central bank failed to establish the existence of the said grounds to warrant the closure of AMA Bank.
“There being no valid grounds that would justify AMA Bank’s closure, the inevitable conclusion is that MB Resolution No. 1705.D. is void,” it said.
