The Bangko Sentral ng Pilipinas (BSP) has padlocked another problematic bank, bringing to seven the number of weak financial institutions ordered closed this year.
BSP Deputy Governor Chuchi Fonacier said the central bank’s Monetary Board issued a Resolution No. 789.A prohibiting the Banco Rural de General Tinio from doing business in the Philippines as mandated under Republic Act 7653 or The Central Bank Act.
State-run Philippine Deposit Insurance Corp. (PDIC) has been designated as receiver and has been directed to proceed with the liquidation of the problematic bank based in Nueva Ecija in accordance with RA 3591 or the PDIC Charter.
The assets of the shuttered financial institution are deemed to be in custodia legis in the hands of the receiver and may not be subject to attachment, garnishment, execution, levy or any other court processes.
Section 13 of the PDIC Charter provides that a bank placed under liquidation shall in no case be re-opened and permitted to resume banking business, while Section 12 provides that banks closed by the Monetary Board shall no longer be rehabilitated.
Once bank are placed under liquidation, the powers, functions and duties of the directors, officers and stockholders of the bank are terminated. The directors, officers, and stockholders shall be barred from interfering in any way with the assets, records and affairs of the bank.
So far, the regulator has closed down Farmers Savings and Loan Bank Inc. based in Bulacan, Metro-Cebu Public Savings Bank, the Rural Bank of Mahaplag (Leyte) Inc., 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).
The number of problematic banks ordered closed by the BSP 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.
The BSP has rolled out of the Rural Bank Strengthening Program (RBSP) to enhance the operations, capacity, and competitiveness of the industry.