GSIS Family Bank not a gov’t bank, says BSP

The conflict between the Puyat family and the Government Service Insurance Corporation (GSIS) has worsened after the Bangko Sentral ng Pilipinas (BSP) ruled that GSIS Family Bank (GSISFB) is not a government bank.

The BSP ruling has cleared the way for the Puyat family to take GSISFB to court over the settlement of a 24-year-old bank loan acquired by the late Sen. Gil Puyat from the former ComSavings Bank.

Puyat’s surviving family has been threatening to sue GSISFB which took over ComSavings in a P1.5-billion bail out by the GSIS in 1999. However, it was not clear whether the GSISFB could be sued before the Ombudsman or the regular courts.

In a letter to the Puyats, the BSP said that it found "insufficient basis to categorize GSISFB as a government bank" simply because it was wholly-owned by the government indirectly through the GSIS.

BSP’s Supervision and Examination Department said in the letter that to be classified as a government bank, GSISFB must also be "vested with functions related to public needs."

SED director Candon Guerrero said that GSISFB "basically functions as an ordinary thrift bank" and from the start, even before it was taken over by the GSIS, the bank was organized as a private stock savings and loan association under the General Corporation law.

The conflict arose when GSISFB moved to foreclose the shares in various companies that the late Senator Puyat used as collateral for some P3-million worth of loans from the defunct ComSavings Bank.

According to the Puyat family’s lead negotiator David So, GSIS president Winston Garcia ordered the GSISFB to terminate negotiations with the Puyat family and foreclose on the shares.

However, GSISFB was unable to find a loan agreement that would have allowed the bank to initiate foreclosure proceedings.

According to So, the law on prescription indicates that GSISFB’s ownership claim on the shares had lapsed since the bank was not able to foreclose within the 10-year period allowed by law. The Puyats have been trying to reacquire the shares since then.

GSISFB is scheduled to hold an emergency meeting today to discuss the allegations made by the Puyat family who, according to sources, have agreed to sit on the negotiating table to discuss possible settlement before the conflict spiraled into the courts.

Sources revealed that the GSISFB was asking the heirs of the late senator to pay at least P30 million for the loan in order to get the shares back.

The Puyat heirs, however, were willing to pay only the principal amount of P3 million.

The shares used by Puyat to secure his loan represented interests in various companies such as Manila Bank Corp. and Seabord Eastern Insurance Co.