BSP shuts down Batangas-based Women’s Rural Bank

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of Batangas-based Women’s Rural Bank, bringing to four the number of problematic banks shuttered so far this year.

The BSP’s Monetary Board issued a resolution prohibiting the rural bank from doing business in the Philippines and placing it under the supervision of the state-run Philippine Deposit Insurance Corp. (PDIC).

Women’s Rural Bank is a two-unit rural bank with head office located at 29-A, Carandang St. in Rosario, Batangas. Its lone branch is located in Barangay Bihis, Santa Teresita, Batangas.

Latest available records showed the bank had 4,300 deposit accounts with total deposit liabilities of P82.1 million. Total insured deposits amounted to P81.7 million equivalent to 99.5 percent of total deposits.

PDIC assured depositors that all valid deposits and claims shall be paid up to the maximum deposit insurance coverage of P500,000. Individual depositors with valid deposit accounts with balances of P100,000 and below shall be eligible for early payment and need not file deposit insurance claims, provided they have no outstanding obligations.

The BSP has so far ordered the closure of four rural banks this year. Aside from Women’s Rural Bank, others shut down include Empire Rural Bank Inc. in Lipa City, Batangas as well as the Rural Bank of Loreto (Surigao del Norte) Inc.

BSP Deputy Governor Chuchi Fonacier said the government would continue to provide incentives under the Consolidation Program for Rural Banks (CPRB) to encourage mergers and consolidations among small banks, particularly rural banks, to further strengthen and enhance the viability of the banking system.

Rural banks play an important role in providing essential financial services to the community, particularly in their specialized or niche markets, and in promoting financial inclusion and financial stability.

The CPRB aims to improve financial strength, enhance viability and generate better return to shareholders; strengthen management and governance; generate synergies and economies of scale through common infrastructure, systems and resources; as well as expand the market reach of rural banks.

Last year, the BSP ordered the closure of seven problematic banks compared to 22 banks in 2016 as it continued to weed out weak players in the industry.