Phongsavanh Bank customers swamp branches to close accounts
Phongsavanh Bank's Samsenthai branch in Chanthabouly district and service units in the capital and some provinces were swamped with customers seeking to close their accounts yesterday.
Customers wait anxiously to find out if they can withdraw their money at Phongsavanh Bank's Samsenthai branch in Chanthabouly district, Vientiane.
The mass closures were in response to unconfirmed reports that Phongsavanh Bank Managing Director, Mr Od Phongsavanh, had been arrested and the bank was on the verge of collapse and would cease to operate.
“I heard a rumour at Khuadin Market that the bank's director had been arrested and people asked me why I didn't withdraw my money,” said Mrs Noi, a customer from Beungkha-nhong village in Sisattanak district, Vientiane, speaking at the Samsenthai branch.
Mrs Noi said she originally heard talk about the matter four days ago before the rumour resurfaced yesterday. She went to the branch to close her account and withdraw savings of over 658 million kip (US$80,000).
“But I changed my mind, because Mr Od is still here, and I talked to him. He told me there was nothing wrong and the bank was still operating properly,” Mrs Noi said.
“I also saw that the bank's Khuntha service unit was very crowded in Sikhottabong district,” her son-in-law added.
Mr Od was apparently not arrested as claimed in the rumour. “I am here, in Vientiane,” he said yesterday at a press conference at the bank's Samsenthai branch.
“Our bank is functioning normally. However, we will allow customers to withdraw their money if they choose. We will also extend the opening times for them to make withdrawals.”
He stressed that his bank was highly stable because it is a registered finance institution and was audited by international organisations and banks, and also the Lao central bank, the Bank of the Lao PDR (BOL).
“This bank is a very important financial institution and the government has monitored its stability,” he said.
“Phongsavanh Bank is covered by insurance under the Lao government for customers' protection. So if we don't have money, the national bank will pay. We also have overseas insurance to protect our customers' savings.”
Director of BOL's Financial Supervision Department, Mr Phoutthaxay Sivilay, said Phongsavanh Bank is a stable financial service provider, but the rumour has caused confidence in the bank to plummet.
“On behalf of the financial supervision department, I want to say that all financial institutions and commercial banking systems in Laos are stable,” Mr Phoutthaxay said, while surrounded by hundreds of customers queuing to close their accounts.
He said Phongsavanh Bank is stable because its assets are much larger than its debt. “So I ask customers to please keep calm and trust the bank. Phongsavanh Bank has enough money to return all deposits to clients if they want.”
“BOL has regulations and laws on the regulation of commercial banks and for their stabilisation. So if a bank has a problem, BOL will know and take steps to help or control the situation first,” Mr Phoutthaxay said.
“We use modern technology systems that link to each bank.”
He added that the current issue does not mean Phongsavanh Bank faces financial problems, saying “It is because the unconfirmed reports have caused public misunderstanding.”
Mr Phoutthaxay said officials were working to discover the source of the rumour. Phongsavanh Bank is a private licensed bank in Laos, providing financial services to individuals, businesses and government agencies. It is part of the Phongsavanh Group and began operating in March 2007.
The group is a multi-sector conglomerate with enterprises in international trading, timber, hospitality, telecommunications, banking, airlines and security products and services, according to the group's website.
this is why laos needs to upgrade our media, so that rumors like this can me squashed and heard all over the country easily through televised broadcasts or radio.
i hope the government realizes this and promotes privitazation in media. this will be a step forward!!!!
you never know rumor could be real or not all customer should be alert , don't let history repeat it seft again i remember in 1992 when thai private investment own the bank , they run away with all customer deposite , including Lao people live in U.S was been rip off , because they sent money to their relative deposite for them due to bank give out high interest like 20% to lure in customer
i have heard about this rumour from my friend in Vientiane too, but i think it's just a rumour. phongsavanh bank has been growing rapidly in a past couple years, and it was doing very good so i don't think that the bank will collapse that easy
this will be a step forward!!!!
don't let history repeat it seft again i remember in 1992 when thai private investment own the bank , they run away with all customer deposite , including Lao people live in U.S was been rip off , because they sent money to their relative deposite for them due to bank give out high interest like 20% to lure in customer 
