BSP shuts down 6th problematic bank this year

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) ordered the closure of Lucena-based Grand Agri Rural Bank Inc., bringing to six the number of problematic banks shuttered this year.

BSP Deputy Governor Chuchi Fonacier said the Monetary Board has issued a resolution prohibiting the Grand Agri Rural Bank from doing business pursuant to Section 30 of Republic Act 7653 or The New Central Bank Act, as amended.

Fonacier said the regulator also directed the Philippine Deposit Insurance Corp. (PDIC) to take over the closed bank and act as receiver, with a directive to proceed with the takeover and liquidation of the rural bank in accordance with Section 12 (a) of RA 3591 or the PDIC Charter, as amended.

Grand Agri Rural Bank is a one-unit rural bank established in Tayabas City, Quezon in 1996 primarily to carry and engage in the business of extending rural credit to small farmers and tenants, market vendors and deserving rural industries or enterprises.

Guevent Investment Development Corp. (GIDC) acquired Grand Agri Rural Bank from its original stockholders in 2014.

Prior to the closure of the Grand Agri Rural Bank, the regulator had ordered the closure of the Rural Bank of Datu Paglas based in Maguindanao, Rural Bank of Caloocan, 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 launch 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.