BSP shuts down Siquijor bank

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has shut down another ailing rural bank, bringing to eight the number of closed banks this year as the regulator continues to weed out weak players.

The central bank issued MB Resolution 1570.A prohibiting Rural Bank of Larena (Siquijor) Inc. to operate.

The regulator also ordered state-run Philippine Deposit Insurance Corp. (PDIC) to act as receiver to proceed with the takeover and liquidation of the rural bank.

Rural Bank of Larena is a single-unit rural bank located on Bonifacio St., Brgy. North Poblacion, Larena, Siquijor.

Latest available records showed Rural Bank of Larena has 482 deposit accounts with total deposit liabilities of P12.9 million, of which 96.2 percent or P12.4 million are insured deposits.

The state-run deposit insurer assured depositors that all valid deposits and claims shall be paid up to the maximum deposit insurance coverage of P500,000.

This is the eighth bank ordered closed by the BSP. Others ordered closed by the regulator this year include East Coast Rural Bank of Hagonoy, Rural Bank of Guihulngan (Negros Oriental), Rural Bank of Basey (Samar), Valiant Bank, The Palawan Bank (Palawan Development Bank), Rural Bank of Mabitac (Laguna) and Bagong Bangko Rural ng Malabang (Lanao del Sur).

Under Section 13 of Republic Act 3591, as amended, PDIC can accept letters of intent from interested banks and non-bank institutions for possible purchase of assets and assumption of liabilities as a mode of liquidating the closed bank within 60 days from the takeover.

The BSP and PDIC have been pushing mergers and consolidation in the industry through the grant of incentives under the Consolidation Program for Rural Banks to further strengthen the country’s banking industry.

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.