BSP closes Batangas rural bank

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of another rural bank as it directed state-run Philippine Deposit Insurance Corp. (PDIC) to take over Farmers’ Rural Bank Inc. in Batangas.

The BSP’s Monetary Board issued MB Resolution No. 1266.B placing the rural bank owned by the Limjoco family under the supervision of the PDIC last Friday.

The shuttered bank has a lone branch on Rizal St. in Lian, Batangas.  Major shareholders include bank president Bettina Limjoco, Teresa Limjoco, Alexander Limjoco, Juan Miguel Limjoco, Rene Limjoco, and Annadette Blanch.

Farmers’ Rural Bank had 1,689 accounts with total deposit liabilities of P28.7 million as of end June this year. Of the total amount, about 97.4 percent or P27.9 million are covered by insurance.

The state-run deposit insurer said it is now gathering, verifying, and validating all bank records and valid deposits that would be paid up to the maximum deposit insurance coverage of P500,000.

Depositors with valid deposit accounts with balances of P100,000 and below shall be eligible for early payment and need not file deposit insurance claims, except when they have outstanding obligations with Farmers’ Rural Bank or acted as co-makers of these obligations. 

The agency intends to start mailing payments to these depositors at their updated addresses recorded in the bank in the last week of August. It is set to conduct a Depositors-Borrowers Forum on Aug. 26.

On the other hand, PDIC intends to start claims settlement operations for depositors who are required to file deposit insurance claims in the first week of September.

Banks that were placed under the supervision of PDIC this year include Community Bank (Rural Bank of San Alfonso) Inc., Community Rural Bank of Magsaysay (Davao del Sur) Inc., Rural Bank of Labrador (Pangasinan) Inc., Rural Bank of Magsingal (Ilocos Sur) Inc., Rural Bank of Pres. Roxas (North Cotabato) Inc., Rural Bank of Sta. Magdalena (Sorsogon) Inc., Siargao Bank (A Rural Bank) Inc., and Surigaonon Rural Banking Corp.

The BSP’s Monetary Board has further sweetened the incentives as well as the financial package to encourage mergers and consolidations among rural banks through the Consolidation Program for Rural Banks (CPRB).

Under the program, the Countryside Financial Institutions Enhancement Program (CFIEP) has set aside P25 million to support the financial advisory, business process improvement, and capacity-building support services necessary to ensure the attainment of the program’s objectives.

Last December, the BSP and PDIC approved the extension of the Strengthening Program for Rural Banks (SPRB) Plus to end December this year.

Data from the BSP showed there are 512 rural banks operating nationwide.

The BSP and PDIC have approved seven merger or consolidation applications involving 14 banks as of end December last year.