In no uncertain terms, the state-controlled Land Bank of the Philippines debunked any irregularities regarding the release of millions of pesos meant to fund flood control projects, which were instead allegedly pocketed by private and public, elected and appointed, individuals.

As a significant period of my journalistic journey concentrated on covering the banking and finance beat, including the financial market, I, just like Senator “Kiko” Francis Pangilinan, too, wonder how such a large amount of money can be withdrawn from a mere bank branch.

It's a normal practice, Mr. Senator.

From what I’ve gathered, the maximum amount of cash a bank branch is allowed to keep in its vault at any given day, as set by the Bangko Sentral ng Pilipinas (BSP), only stands between ₱3.0 and ₱3.5 million.

This policy, though, is on a case-to-case basis, depending on the financial capability of the bank or financial institution to serve its client. In the normal course of business, the bank sets a limit.

Unusually large amounts of withdrawals from a branch will be sent to the head office.

It is true that advance notice, as disclosed by contractor Sally Santos, was given to Land Bank. But, she erred on her explanation that the advice request is needed because the bank has to pool the money from other branches.

To answer Sen. Kiko’s query during the Sept. 26 hearing, I learned that in order to service a client’s large sum of withdrawal, a bank—in this case, LandBank Malolos Highway branch—has to inform its head office of the ₱457 million.

And, this is how it goes – the protocol for withdrawal of large amounts of cash.

Based on the requirement of the branch, the head office makes the withdrawal request to the BSP, and such request must be signed by two bank officers whose names have been submitted to the BSP as the authorized signatories and representatives.

As a rule, the BSP requires banks and other financial institutions to submit the names of four bank officers who will be authorized to withdraw cash – two officers as signatories and another two as the duly representatives of the bank.

The amount to be withdrawn is backed by the bank’s demand deposit account with the BSP. This is where the reserve requirement is lodged. The reserve requirements dictate the amount of cash that banks must hold to meet large withdrawals. In the case of Land Bank, a universal bank, the reserve requirement stands at five percent of its total deposit – in cash or in the vault and/or a combination.

Another essential requirement is insurance coverage. “Because of the unnecessary risk arising from such a large amount of withdrawal, it must be properly covered by insurance,” my muted bank president source explained.

Simply put, the money withdrawn from the BSP will have to be delivered by an armored car for security.

Now, how the money is released. From what I’ve learned is that the Department of Public Works and Highways (DPWH) has already stipulated the list of names of the contractors under its account with Land Bank, and it is the contractor/s that withdraw.

It is the Department of Budget and Management that issues the Notice of Cash Allocation (NCA) and the Special Allotment Release Order (SARO). NCA is the disbursement authority or the green light to the Bureau of Treasury to pay or liquidate the amount due.

On the other hand, a SARO is an obligational authority; a specific authority issued to one or more identified agencies, in this case the DPWH, to incur obligations not exceeding a given amount during a specified period for the purpose indicated.

To sum it all, the protocol of withdrawing large amounts of money is a tedious and risky process!