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November 28, 2023

BSP shuts down rural bank in Cebu, bringing 2023 closure tally to seven

The Bangko Sentral ng Pilipinas (BSP) has taken action to close the Rural Bank of Talisay (Cebu), Inc., marking the seventh rural bank closure this year. This measure was enforced in compliance with Section 30 of the amended Republic Act No. 7653, also known as the New Central Bank Act, according to a circular letter signed by BSP Assistant Governor Arifa A. Ala. The Rural Bank of Talisay was situated at Cebu South Road, Tabunok, Talisay City, Cebu.

The Philippine Deposit Insurance Corp. (PDIC) has been appointed as the Receiver and has received a directive to proceed with the takeover and liquidation of the aforementioned rural bank, in accordance with Section 12 (a) of RA No. 3591, also known as the PDIC Charter, as amended. It’s worth noting that when a bank is placed under liquidation, it is no longer permitted to resume banking business. Additionally, banks closed by the Monetary Board are no longer eligible for rehabilitation.

Upon placing a bank under liquidation, the powers, functions, and duties of its directors, officers, and stockholders are terminated. These individuals are also prohibited from interfering in any way with the assets, records, and affairs of the bank.

As a result, anyone in possession of any asset and/or records of the closed Rural Bank of Talisay (Cebu), Inc. is advised not to allow or honor any transaction affecting the same without the consent of the Receiver. They are also urged to immediately turn over the said assets and/or records to the designated Deputy Receiver.

Furthermore, all assets of the bank are considered to be in custodia legis (in the custody of the law) in the hands of the Receiver and may not be subject to attachment, garnishment, execution, levy, or any other court processes.

This action against the Rural Bank of Talisay Inc. marks the seventh rural bank closure by the BSP in the current year. Prior to this, the BSP had closed the United Consumers Rural Bank, Bangko Pangasinan – A Rural Bank, Rural Bank of San Juan (Southern Leyte), Binangonan Rural Bank, Rural Bank of San Marcelino, and Rural Bank of San Agustin (Isabela).

Notably, in the previous year, the BSP had closed nine rural lenders, including 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).

These actions highlight a trend of increasing rural bank closures in the Philippines. In 2020, there were five bank closures, but this figure rose to 13 in 2021. According to central bank data, there were 3,527 rural bank head offices and branches registered with the BSP as of August.