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October 06, 2022

Bsp shuts down problematic thrift bank in Cebu

The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of Metro-Cebu Public Savings Bank, the first problematic thrift bank shuttered so far this year.

The central bank’s Monetary Board issued Resolution No. 434.E last March 31 prohibiting the Metro-Cebu Public Savings Bank from doing business in the Philippines as mandated under Republic Act 7653 or The Central Bank Act, as amended.

The state-run Philippine Deposit Insurance Corp. (PDIC) has been designated as receiver and has been directed to proceed with the liquidation of the problematic thrift bank in accordance with RA 3591 or the PDIC Charter.

PDIC took over the closed thrift bank and all its branches, assets, and records last April 1. The Metro-Cebu Public Savings Bank has a branch at the Gee Ann Square Mall in Talisay, Cebu and another one in Lapu-Lapu City also in Cebu.

The Metro-Cebu Public Savings Bank is the fifth bank ordered closed by the central bank this year. Other banks shuttered by the regulator include the Rural Bank of Mahaplag (Leyte) Inc. and the Rural Bank of Salcedo (Ilocos Sur) Inc.,

the Rural Bank of San Lorenzo Ruiz (Siniloan) Inc., and the Rural Bank of San Nicolas (Pangasinan) Inc.

Under the PDIC charter, a bank placed under liquidation shall in no case be re-opened and permitted to resume banking business.

Furthermore, the law also expressly provides that banks closed by the Monetary Board shall no longer be rehabilitated.

“Be further informed that upon placement of the bank under liquidation, the powers, functions and duties of the directors, officers and stockholders of the bank are terminated. Accordingly, the directors, officers, and stockholders shall be barred from interfering in any way with the assets, records and affairs of the bank,” PDIC said.

The number of problematic banks ordered closed by the central bank almost tripled to 13 last year from five in 2020 as the country has yet to fully recover from the impact of the COVID-19 pandemic.

To strengthen the sector, the central bank has rolled out of the Rural Bank Strengthening Program (RBSP) to enhance the operations, capacity, and competitiveness of the industry.

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