A RURAL BANK in Batangas has been ordered shut by the Bangko Sentral ng Pilipinas (BSP), becoming the second lender to be closed down by regulators this month.
The BSP’s Monetary Board on Thursday shut down the operations of the Empire Rural Bank, Inc., a lender based in Lipa City. The Philippine Deposit Insurance Corp. (PDIC) took over the bank the following day as receiver.
Empire Rural Bank runs one branch along C.M. Recto Avenue in Lipa, and is led by its president Benjamin B. Abendan, according to the BSP’s database.
The bank holds P36.4 million in total deposits spread across 564 accounts as of December 2017, the PDIC said. Of the amount, P31.6 million is covered by deposit insurance.
PDIC’s takeover allows the state-run deposit insurer to acquire the lender’s assets in order to pay outstanding liabilities to depositors.
Bank deposits are insured up to P500,000 per depositor, according to the law. Funds used to settle valid deposit insurance claims are drawn from the Deposit Insurance Fund managed by the PDIC.
Any remaining amount which cannot be supported by the insurance fund will be sourced from the sale of the closed bank’s properties.
Depositors with balances of P100,000 or lower can avail of early payment, provided that they have no outstanding obligations with the bank, the PDIC said.
The Empire Rural Bank follows the fate of the Rural Bank of Loreto, Inc. in Dinagat Islands, which was also closed down by the BSP on Feb. 9.
The central bank ordered the closure of six rural banks and one thrift bank last year. In 2016, the regulator closed 22 lenders. — Melissa Luz T. Lopez