BSP shuts down another rural bank

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of Surigao City Evergreen Rural Bank Inc., bringing to eight the number of weak rural banks shuttered by the bank regulator this year.

State-run Philippine Deposit Insurance Corp. (PDIC) was designated by the BSP as the receiver and took over the assets, records and affairs of the closed rural bank last April 15.

The BSP has so far ordered the closure of eight rural banks as part of its efforts to rid the industry of weak players and protect the interest of depositors.

The BSP has also shut down the Rural Bank of Malinao (Aklan) Inc.; the Rural Bank of Bayawan; Lapu-Lapu Rural Bank Inc. based in Carcar City Cebu; the Rural Bank of Villaviciosa (Abra) Inc.; Koronadal Rural Bank Inc.; Rural Bank of Panay Inc.; and Rural Bank of Basay (Negros Oriental) Inc.

Last year, 14 rural banks were ordered closed by the BSP and were placed under the supervision of the PDIC.

BSP Deputy Governor Nestor Espenilla Jr. earlier said the BSP is looking at consolidating the Strengthening Program for Rural Banks (SPRB) Plus and the Comprehensive Program for Rural Banks (CPRB) to entice mergers among smaller banks with the entry of stronger foreign banks into the country.

The SPRB Plus is an enhanced version of the original SPRB launched in 2010 exclusively for rural banks. It expired last December after a one-year extension approved by the BSP and PDIC with certain operational refinements after banking industry associations pushed for the program’s extension.

Last December, the BSP issued the implementing guidelines for the CPRB setting the eligibility requirements for proponent banks, the procedures for application and the related documentary requirements.