BSP shutters two more rural banks

Monetary authorities have shuttered two more rural banks, each headquartered in the provinces of Agusan del Norte and Quezon, due to insolvency.

In a bulletin, state-run Philippine Deposit Insurance Corp. (PDIC) said the Monetary Board—the Bangko Sentral ng Pilipinas’ (BSP) highest policy-making body—on July 28 prohibited Rural Bank of Cabadbaran (Agusan) Inc. from doing business.

Rural Bank of Cabadbaran, whose head office was located in Cabadbaran City, the capital of Agusan del Norte, had three other offices: one branch each in the cities of Butuan and Cagayan de Oro as well as a microbanking office in Gingoog City.

Likewise placed by the Monetary Board under the PDIC’s receivership also on July 28 was Rural Bank of Alabat (Quezon) Inc., whose head office was located in Alabat, Quezon.

Rural Bank of Alabat had two branches in the towns of Atimonan and Mauban in the same provinces.

The PDIC took over the two banks’ affairs, assets, branches as well as records on July 29.

So far this year, the BSP placed 11 other rural banks under PDIC receivership: Rural Bank of Villaviciosa (Abra) Inc., Lapu-Lapu Rural Bank Inc., Rural Bank of Bayawan (Negros Oriental) Inc., Rural Bank of Basay (Negros Oriental) Inc., Rural Bank of Panay Inc., Koronadal Rural Bank Inc., Rural Bank of Malinao (Aklan) Inc., Surigao City Evergreen Rural Bank Inc., Rural Bank of Amadeo (Cavite) Inc., New Rural Bank of Binalbagan, and Rural Bank of Siaton (Siaton, Negros Oriental) Inc.

Including the thrift bank GSIS Family Bank, which the Monetary Board shuttered in May, there were 14 closed banks thus far in 2016.

But GSIS Family Bank may find a new lease of life as “less than 10” firms have expressed interest to rehabilitate the lender previously controlled by state-run pension fund Government Service Insurance System, according to the PDIC.

Rural Bank of Alabat and Rural Bank of Cabadbaran were the second and third banks, respectively, closed since Republic Act No. 10846, which amended the PDIC’s charter, took effect in June.

The PDIC had noted that under RA 10846, “depositors of closed banks may now have quicker access to their insured deposits” as “payment of deposit insurance may now also be based on depositors’ records found to be authentic by PDIC and not just solely on the basis of records maintained by the closed bank.”

“This addresses the inconvenience caused to depositors by the absence of deposit records of closed banks or by irregularities in the recording, documentation and deposit record keeping of a closed bank. Depositors’ evidence of deposits and records include savings passbooks, certificates of deposit, ATM cards, transaction receipts, check books and other bank records,” the PDIC had said.