MANILA, Philippines – State-run Philippine Deposit Insurance Corp. (PDIC) is extending the processing of insurance deposit claims of the shuttered Bukidnon-based Xavier-Punla Rural Bank Inc. after servicing a little more than half of the deposit accounts.
PDIC said the agency has yet to receive deposit insurance claims for P11 million covering 604 accounts after the deadline for the filing of claims ended last Aug. 24.
In accordance with the provisions of the PDIC Charter, the agency should no longer accept any deposit insurance claim once the deadline lapses.
However, PDIC said it would continue to receive and process deposit insurance claims from depositors of the closed bank as it was only able to settle close to P15 million worth of deposit insurance claims.
The Bangko Sentral ng Pilipinas (BSP) ordered the closure of Xavier-Punla Rural Bank last Aug. 20 and placed it under the supervision of the PDIC.
The shuttered rural bank had P25.8 million in total estimated insured deposits involving 1,303 accounts.
Since the closure, PDIC has paid P12.6 million in insured deposits covering 83 accounts through its onsite claim settlement operations while another P2 million was settled thru postal money orders sent via registered mail to 592 depositors with balances of P100,000 and below.
Aside from Xavier-Punla Rural Bank, the BSP has closed down nine other rural banks this year. These are the 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., Surigaonon Rural Banking Corp., and Farmer’s Rural Bank Inc. in Batangas.
The number of rural and cooperative banks was reduced by 26 to 532 in the first half of the year from 558 in the same period last year amid the consolidation of players as well as the exit of weaker players in the banking system.
The BSP has offered more incentives as well as financial package to encourage mergers and consolidations among rural banks through the Consolidation Program for Rural Banks (CPRB).
The BSP, PDIC, and Land Bank of the Philippines conceptualized the program wherein 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.
The CPRB is different from the Strengthening Program for Rural Banks (SPRB) Plus that is aimed to strengthen the banking system and to minimize bank closures.
The BSP and PDIC approved earlier the extension of the SPRB Plus to December this year from December 2014 with certain operational refinements after banking industry associations pushed for the program’s extension.
The BSP and PDIC have approved seven merger/consolidation applications involving 14 banks as of end-December last year.