BSP orders closure of Lanao del Sur bank

The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of Bagong Bangko Rural ng Malabang (Lanao del Sur) Inc., the first problematic bank to be shuttered this year.

The central bank’s Monetary Board (MB) issued Resolution 159 last Jan. 24 prohibiting the problematic bank from doing business and placing it under the supervision of state-run Philippine Deposit Insurance Corp. (PDIC).

Bagong Bangko Rural ng Malabang is a single-unit rural bank located at 593 Bayan St., Brgy. China Town (Pob.), Malabang, Lanao del Sur.

Latest available records showed the rural bank had 1,382 deposit accounts with total deposit liabilities of P62.35 million as of end-September.

Total insured deposits amounted to P37.26 million equivalent to 59.7 percent of total deposits.

PDIC said all claims for valid deposits would be processed accordingly and would be paid up to the maximum deposit insurance coverage of P500,000 through the designated servicing branches of Land Bank of the Philippines.

Last year, the regulator closed down 12 problematic banks as part of its efforts to rid the industry of weak players.

BSP Governor Nestor Espenilla Jr. said the regulator would not hesitate to close down banks to protect the public.

“Financial stability is something that we constantly advocate for our economy and to do that we have to impose strong measures. We had imposed a discipline of aligning our standards to global standards and we hesitated not to shut down banks that do not do what they are supposed to do in protecting the public,” he said.