“We cannot afford to have banks and other financial institutions going berserk and rogue, perform these seemingly unethical and almost predatory practices especially now that the nation is facing an economic crisis.”
There is now a clamor among some members of the House of Representatives to open a congressional inquiry into what some conservative banking observers call a bank’s abhorrent arm-twisting of its client.
Reports exposing a client’s financial standing, which is uncalled for, have been publicized.
Recently, some media outlets have reported that a local bank has started to take steps to foreclose the loan collateral of a businessman-client for allegedly defaulting on his bank payments.
One news item declared it to be the “largest corporate default in Philippine history.”
The quesion is: Is it prudent to drag the media into a client-to-debtor issue that can be properly and ethically addressed through closed-door negotiations?
Pieces of information about the client’s finances are published in both traditional and social media. If the objective is simply to obligate the client to settle his payments, why bring it out to the media? Is the bank eyeing to also embarrass the client in public?
Whatever agenda the bank has behind the expose of its client’s financial standing, resorting to leaking information to the media, the action is outrageous and unthinkable—ironically in line with the institution’s catchy marketing slogan.
So, this is the way to deal with the client’s unpaid debt: exposing him.
Whether bogus or not, the information released to the media should be enough of a cause to trigger a congressional inquiry in aid of legislation. It has set a precedent that puts in danger the confidential nature of bank transactions.
While it may be possible that the news releases were part of a smear drive against the particular client, the continuing defamation by the bank will likely put the integrity of the whole banking community in question.
After all, banking is a public trust. How can we trust banking institutions if they can simply disclose information the minute they deem it comfortable to let loose?
What happens to the bank secrecy law that stipulates non-disclosure of banking transactions and details, such as information on clients’ activation of other banking services like loans and other financial transactions?
We cannot afford to have banks and other financial institutions going berserk and rogue, perform these seemingly unethical and almost predatory practices especially now that the nation is facing an economic crisis.
It is fair and justifiable to remind banks that under the current situation, the stability of the entire banking and financial systems is imperative.
Congress may need to review and amend the General Banking Act. To this, we agree.
About the author: Richard Orsino is a retired executive who worked for three decades in the telecommunications industry.)