• BSP shuts down Iloilo rural bank

The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of another rural bank as part of continued efforts to weed out weak players from the banking sector.

The BSP’s Monetary Board issued a resolution prohibiting Rural Bank of Barotac Viejo (Iloilo) Inc. from doing business in the Philippines.

The rural bank is based in Barotac Viejo in Iloilo City and has two branches in Jaro and Concepcion.

This is the second problematic bank ordered closed by the central bank so far this year after Countryside Cooperative Rural Bank of Batangas last month.

State- run Philippine Deposit Insurance Corp. (PDIC) has been directed to act as receiver and to proceed with the takeover and liquidation of both banks in accordance with Republic Act 3591 or the PDIC Charter as amended by RA 10846.

A bank that has been placed under liquidation should in no case be re- opened and permitted to resume banking business. Furthermore, the law expressly provides that banks closed by the Monetary Board should no longer be rehabilitated.

Upon placement of any bank under liquidation, the powers, functions and duties of the directors, officers and stockholders of the bank are terminated.

Accordingly, the directors, officers, and stockholders are barred from interfering in any way with the assets, records and affairs of closed banks.

The BSP ordered the closure of 22 problematic banks last year, eight more than the 14 banks closed in 2015.

BSP Deputy Governor Nestor Espenilla Jr. earlier said the country’s banking system has evolved over the years with the closure of some players as well as the mergers and consolidation of the others.