BSP closes problematic rural bank, 2nd this year

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of another rural bank as it continues to weed the industry of weak and problematic players.

BSP Deputy Governor Chuchi Fonacier said that the Monetary Board issued Resolutions   210.B on Thursday prohibiting the Rural Bank of San Lorenzo Ruiz (Siniloan) Inc. from doing business in the Philippines pursuant to Section 30 of Republic Act  7653 or The New Central Bank Act, as amended.

Fonacier said the regulator has designated state-run Philippine Deposit Insurance Corp. (PDIC) as receiver with a directive to proceed with the takeover and liquidation of the shuttered rural bank.

The financial institution is located at Barangay P. Burgos in Siniloan, Laguna offering financial accommodations to local farmers, fishermen, businessmen, public and private employees, and students.

This is the second rural bank ordered closed by the central bank this year.

The PDIC assured depositors that all valid deposits and claims would be paid up to the maximum deposit insurance coverage of P500,000 per depositor.

Individual account holders of valid deposits with balances of P100,000 and below, who have no outstanding obligations or have not acted as co-makers of obligations with the closed bank, are not required to file deposit insurance claims.