MANILA,Philippines — The Bangko Sentral ng Pilipinas (BSP) has shut down another rural bank based in Batangas, bringing the number of closed banks this year to nine as the regulator continued to weed out weak players in the industry.
Last Oct. 31, the Monetary Board issued Resolution 1660, prohibiting the Rural Bank of Lemery Inc. from doing business in the Philippines.
The central bank also ordered state-run Philippine Deposit Insurance Corp. (PDIC) to act as receiver to proceed with the takeover and liquidation of the rural bank.
The PDIC, in a bulletin posted on its website, said it took over the bank and its assets, records and affairs on Nov. 4.
This is the ninth bank ordered closed by the BSP this year.
Other rural banks ordered closed by the BSP this year are: 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), Bagong Bangko Rural ng Malabang (Lanao del Sur), and Rural Bank of Larena (Siquijor) Inc.
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 for mergers and consolidation in the industry.
Previously, the regulators had the Consolidation Program for Rural Banks (CPRB), which granted incentives to encourage mergers and consolidation among major stakeholders in the industry.
The program, which expired last Oct. 26, aimed 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.