Avoid Land Bank

If any of you are planning to open a bank account, I deeply encourage you to avoid opening one at the Land Bank of the Philippines. Specially if you expect to be getting checks.

We (by we I mean my employer) has a project that made it necessary we hire some people from Mindanao. When we were about to deposit their checks in their Land Bank accounts, we were informed that the Land Bank of the Philippines does not allow checks deposits.

So I called the Land Bank office 551-2200 and asked them if this was true and what is behind this bizarre policy. It turned out, it was only partially true, the Land Bank accepts check deposits within a regional network, so If I am in Manila, I can deposit a check to a Land Bank account in Manila. They do not allow check deposits outside of a regional network, so since we were in Manila (well Makati), we are barred by this policy from depositing checks in an account in Malaybalay.

And why do they have this policy? The person I talked to said that they are only protecting themselves, in other words, they do not trust other banks to honor checks they isssued. But that is not all, they also do not trust their own banks' checks because they will also not allow checks issued by their own banks from being deposited outside of the regional network.

So a Land Bank check issued in Manila still cannot be deposited to a Land Bank account based in Malaybalay. How stupid is this policy? In an age of nearly instantaneous communication, you will think that it will be easy to ascertain whether a given check is good. Even if the process may be hard to do in Mindanao, it is easy in Manila.

It seems to me that who the Land Bank does not actually trust is their own employees. They do not trust them not to defraud their own employer. And rather than fixing this problem, they create a policy that actually makes life harder for their customers.

The thing is, they can get away with it because they are the governments bank. National government agencies and local government agencies are required to deposit their funds at the Land Bank. The government's payroll also required to be coursed through them. They know they do not need to compete with other banks to earn profit. This makes them complacent.