BSP closes 2 more rural banks
Bangko Sentral ng Pilipinas. INQUIRER.net FILE PHOTO
THE BANGKO Sentral ng Pilipinas (BSP) has shuttered two more rural banks for insolvency.
Separately, a ranking BSP official said a number of rural banks in the Visayas have been preparing to merge under the enhanced consolidation program aimed at strengthening small lenders.
In separate circulars last week, the BSP said the Monetary Board—its highest policy-making body—decided to prohibit Koronadal Rural Bank Inc. as well as Rural Bank of Panay Inc. from doing business.
Both rural banks’ affairs and assets were placed under receivership as mandated under Republic Act No. 7653 or the New Central Bank Act.
The BSP designated state-run Philippine Deposit Insurance Corp. (PDIC) as the banks’ receiver.
The closures brought to a total of six the number of rural banks shuttered by the BSP so far this year. The four others were Lapu-Lapu Rural Bank Inc., Rural Bank of Villaviciosa (Abra) Inc., Rural Bank of Bayawan (Negros Oriental) Inc. and Rural Bank of Basay (Negros Oriental) Inc.
In a recent text message, BSP Deputy Governor Nestor Espenilla Jr. said “several deals are under preparation” under the Consolidation Program for Rural Banks (CPRB), although there were no official applications yet.
Last year, Philippine Deposit Insurance Corp. (PDIC) president Cristina Q. Orbeta said five to six rural banks in the Visayas were planning to merge under the CPRB.
Espenilla said these Visayas-based rural banks were still discussing the terms for the merger.
Last week, the PDIC urged rural banks to apply for availments under the program, which will be open until Aug. 25 next year.
The CPRB, jointly shepherded by the BSP, PDIC and the state-owned Land Bank of the Philippines, is a “bank-strengthening program specifically designed for rural banks to help enhance their viability and ability to promote financial inclusion and financial stability in their respective communities,” the PDIC noted in a statement.
Orbeta said rural banks should take advantage of the CPRB, especially in the face of increased competition brought by the integration of financial markets in the Asean region.
