THE BANGKO Sentral ng Pilipinas (BSP) last week closed down a rural bank in Cebu province.
In a Jan. 28 circular letter, BSP Deputy Governor Nestor A. Espenilla said the BSP’s Monetary Board had decided to prohibit Lapu-Lapu Rural Bank Inc. from doing business.
The rural bank’s assets and affairs were also placed under receivership pursuant to Republic Act No. (RA) 7653 or the New Central Bank Act.
Under RA 7653, a bank is put under receivership if it is unable to pay its liabilities; has insufficient realizable assets to meet liabilities; cannot continue in business without involving probable losses to its depositors or creditors; or has willfully violated a cease and desist order that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution.
The Monetary Board designated state-run Philippine Deposit Insurance Corp. (PDIC) as the bank’s receiver. PDIC is the statutory receiver and liquidator of closed banks in the country.
PDIC also takes over the banks ordered closed by the Monetary Board; administers closed banks’ assets, records and affairs; as well as preserves and disposes such assets.
Last month, the BSP also shuttered Rural Bank of Villaviciosa (Abra) Inc.
Data on PDIC’s website showed that as of end-September last year, it had five rural banks under receivership on top of 364 banks under liquidation.
In a statement, PDIC said Carcar City-based Lapu-Lapu Rural Bank had 1,909 accounts with total deposit liabilities worth P67.6 million as of December last year. Insured deposits reached P60.7 million or 89.8 percent of the total.
PDIC also assured the closed bank’s depositors that all valid deposits will would be paid up to the maximum deposit insurance coverage of P500,000. Ben O. de Vera