Monetary Board orders closure of another rural lender
THE BANGKO SENTRAL ng Pilipinas (BSP) has closed down one more rural bank in the country, bringing the number of institutions it has shut down this year to four.
The Monetary Board has closed the Rural Bank of San Juan, Inc. located in Southern Leyte, it said in a circular letter signed by BSP Deputy Governor Chuchi G. Fonacier on May 25.
“The Monetary Board, in its Resolution No. 662.B dated 25 May 2023, decided to prohibit the Rural Bank of San Juan (Southern Leyte), Inc., from doing business in the Philippines pursuant to Section 30 of Republic Act (RA) No. 7653 (The New Central Bank Act), as amended,” it said.
The Philippine Deposit Insurance Corp. (PDIC) has been assigned as receiver with a directive to proceed with the takeover and liquidation in accordance with RA 3591 or the PDIC Charter, under which a bank placed under liquidation is no longer permitted to resume banking business. It also provides that banks closed by the Monetary Board shall no longer be rehabilitated.
Upon placement of a bank under liquidation, the powers, functions and duties of the directors, officers and stockholders of the bank are terminated.
The directors, officers, and stockholders will also be prohibited from interfering in any way with the assets, records and affairs of the bank.
Rural Bank of San Juan is the fourth rural bank closed by the BSP this year. The regulator shut down Binangonan Rural Bank, Inc. last month, Rural Bank of San Marcelino, Inc. in March and Rural Bank of San Agustin (Isabela), Inc. in January.
Last year, the BSP closed down nine banks, namely the Rural Bank of Galimuyod (Ilocos Sur) Inc., Rural Bank of Polomolok (South Cotabato), Banco Rural De General Tinio (Nueva Ecija), Farmers Savings and Loan Bank (Bulacan), Metro-Cebu Public Savings Bank, Rural Bank of Mahaplag (Leyte), Rural Bank of Salcedo (Ilocos Sur), Rural Bank of San Lorenzo Ruiz (Siniloan), and Rural Bank of San Nicolas (Pangasinan).
In 2021, the number of banks closed by the BSP climbed to 13 from just five in 2020.
In a separate circular letter, the Monetary Board also revoked the license of Batanes Government Employees Savings and Loan Association, Inc. to operate as a nonstock savings and loan association (NSSLA).
This is in accordance with RA 8367, or the “Revised Non-Stock Savings and Loan Association Act of 1997” and the rules and regulations promulgated thereunder.
Central bank data showed there are currently 194 registered NSSLAs. These associations collect savings from members of certain industries that are used to finance the personal loans of members.
Meanwhile, there are 3,502 rural and cooperative banks registered with the BSP as of April. — K.B. Ta-asan
