THE BANGKO Sentral ng Pilipinas (BSP) last week shuttered a rural bank in Surigao City, the eighth so far this year.
State-run Philippine Deposit Insurance Corp. (PDIC) said on its website that the Monetary Board—the BSP’s highest policy-making body—last April 14 decided to prohibit Surigao City Evergreen Rural Bank Inc. from doing business.
The bank, located along Borromeo Street in Surigao City, was likewise placed under PDIC receivership.
The PDIC took over the bank’s affairs, assets and records on April 15.
The closure of the Surigao City-based bank brought to eight the number of rural banks closed down this year by monetary authorities.
The BSP earlier shuttered the following: Rural Bank of Malinao (Aklan) Inc., Koronadal Rural Bank Inc., Rural Bank of Panay Inc., 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.
“Many of these banks are small lending institutions and they do not actually lend much and in fact whatever they are lending, they lend to related parties. They are not getting deposits anymore from the public,” BSP Deputy Governor Nestor A. Espenilla Jr. told reporters on the sidelines of the Economic Journalists Association of the Philippines-San Miguel Corp. business journalism seminar last Saturday.
The latest PDIC data showed that as of end-January this year, 348 rural banks were under liquidation, while 295 had approved terminal reports.
The BSP, the PDIC and the Land Bank of the Philippines have been urging consolidations and mergers among rural banks under the Consolidation Program for Rural Banks (CPRB).
The CPRB, which rural banks can avail themselves of until Aug. 25 next year, offers regulatory incentives to proponent banks.
A group of at least five rural banks with head offices or majority of the branches located in the same region or area may qualify under the CPRB, the PDIC earlier said.