MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has shut down the Rural Bank of Caloocan Inc., the fourth bank to be ordered closed this year.
BSP Deputy Governor Chuchi Fonacier said the Monetary Board issued Resolution 783.A last Thursday prohibiting the Rural Bank of Caloocan from doing business pursuant to the provisions of Republic Act 7653 or the New Central Bank Act.
Fonacier said the BSP has designated state-run Philippine Deposit Insurance Corp. (PDIC) as receiver and has been tasked to proceed with the takeover and liquidation of the closed rural bank in accordance with its charter under RA 3591.
PDIC took over the bank’s head office and a branch in Maypajo, Caloocan City as well as its assets, records and affairs last Friday.
Prior to the closure of the Rural Bank of Caloocan, the BSP ordered the closure of Rural Bank of Alimodian (Iloilo) Inc., Palm Tree Bank Inc. based in Cagayan de Oro, and Occidental Mindoro Rural Bank Inc.
Last year, the regulator ordered the closure of Providence Rural Bank, Rural Bank of Tibiao (Antique), De La O Rural Bank, San Fernando Rural Bank, and Cooperative Bank of Aurora.
PDIC paid P124.11 million worth of insurance claims for 7,072 valid deposit accounts maintained in five banks, or 76 percent of the estimated total deposit accounts of 9,305.
BSP Governor Benjamin Diokno earlier announced the launching of the Rural banking Industry Strengthening Program (RBSP) which aims to strengthen the industry in recognition of its critical role in providing financial services in rural and agricultural communities.
“The program is part of the BSP’s broader and continuing efforts to boost the resilience of the rural banking industry, which is a key agent of countryside development as it provides financial services to rural communities, including micro, small and medium enterprises,” Diokno said.
The Inter-Agency Working Group (IAWG) on the RBSP headed by the steering committee chaired by Monetary Board member Bruce Tolentino is set to implement the program.
“The BSP pursues the RBSP as we recognize the vital role that rural banks play in the areas of financial inclusion and inclusive economic growth,” Tolentino said.
The committee, supported by a technical working group (TWG) headed by Fonacier, is mandated to formulate an action plan, including the development of a capacity-building program for rural banks.
The RBSP also benefits from the expertise of senior advisers including Mario Lamberte of the University of the Philippines Public Administration Research and Extension Services Foundation Inc. as well as Gilberto Llanto of the Philippine Institute for Development Studies.
The initial package of proposed policies, programs and reforms is set to be submitted to the Monetary Board by the end of the year.
