Monetary Board orders closure of 2 rural banks
THE BANGKO SENTRAL ng Pilipinas (BSP) has shut down two rural banks last week as the regulator cracks down on more problem lenders.
The policy-setting Monetary Board ordered the closure of the Rural Bank of Sta. Elena, Inc. from Camarines Norte and the Tiaong Rural Bank, Inc. from Sto. Tomas, Batangas during their Aug. 2 meeting.
The Philippine Deposit Insurance Corp. (PDIC) has stepped in as receiver for both lenders effective Friday, it said in a statement.
Rural Bank of Sta. Elena runs one branch and holds P19.6 million of deposits across 744 accounts, according to PDIC data.
Meanwhile, Tiaong Rural Bank operates seven branches, which include two in Laguna, and one each in Cavite and Quezon. Total deposits amount to P891.7 million across 18,471 accounts.
“[U]pon placement of the Bank under liquidation, the powers, functions and duties of the directors, officers and stockholders of the Bank are terminated,” the PDIC said.
PDIC’s takeover paves the way for the state-run insurer to acquire the lender’s assets in order to pay outstanding liabilities to depositors.
Bank deposits are insured up to P500,000 per depositor, according to the law. Funds used to settle valid deposit insurance claims are drawn from the Deposit Insurance Fund managed by the PDIC.
Those with deposits worth P100,000 and below can avail of early payment, provided they do not how unsettled dues with these small lenders.
The state insurer also collects and resolves loans from borrowers and disposes of the bank’s remaining assets through its regular public biddings and negotiated sale, which will be used to settle claims beyond the P500,000 limit.
The latest closure orders bring the number of shuttered banks to seven this year, matching the 2017 tally.
Other lenders which folded this year include Iloilo’s Bangko Buena Consolidated, Inc., Women’s Rural Bank, Inc., the Rural Bank of Initao (Misamis Oriental), Inc., the Empire Rural Bank and the Rural Bank of Loreto, Inc. in Dinagat Islands.
The central bank has been prodding small banks to pursue mergers in order to keep serving their markets while remaining on good financial footing. •