BSP padlocks Bulacan bank

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of Farmers Savings and Loan Bank Inc. based in Bulacan, bringing to six the number of problematic banks shuttered this year.

BSP Deputy Governor Chuchi Fonacier said the Monetary Board issued a resolution last May 12 prohibiting the Farmers Savings and Loan Bank Inc. from doing business in the Philippines as mandated under Republic Act 7653 or The Central Bank Act.

Fonacier said state-run Philippine Deposit Insurance Corp. (PDIC) has been designated as receiver and has been directed to proceed with the liquidation of the problematic thrift bank in accordance with RA 3591 or the PDIC Charter.

The PDIC took over the closed thrift bank and all its branches, assets, records and affairs on May 13.

Farmers Savings and Loan Bank is an eight-unit thrift bank with a head office in McArthur Hi-way, Brgy. Wakas, Bocaue, Bulacan. Its has seven branches including two in Sta. Maria and one each in Angat, Guiginto, Norzagaray, Pulilan, and Bulacan.

As of end 2021, the closed thrift bank has 4,616 deposit accounts with total deposit liabilities of P442.63 million, of which 72.5 percent or P321 million are insured.

Farmers Savings and Loan Bank is the country’s 38th largest thrift bank in terms of assets with P771.18 million as of end 2021 and 47th in terms of capital with P51.63 million. It ranked 43rd in terms of loans with P120.12 million.

According to the PDIC, all assets of the closed bank are deemed to be in custodia legis in the hands of the receiver and may not be subject to attachment, garnishment, execution, levy or any other court processes.

Section 13 of the PDIC Charter provides that a bank placed under liquidation shall in no case be re-opened and permitted to resume banking business, while Section 12 provides that banks closed by the Monetary Board shall no longer be rehabilitated.

“Be further informed that upon placement of the bank under liquidation, the powers, functions and duties of the directors, officers and stockholders of the bank are terminated,” PDIC said.

The directors, officers, and stockholders shall be barred from interfering in any way with the assets, records and affairs of the bank.

“Therefore, anyone in possession of any asset and/or records of the closed Farmers Savings and Loan Bank is advised not to allow or honor any transaction affecting the same without the consent of the receiver and to immediately turnover the said assets and/or records to the designated deputy receiver,” the PDIC said.

The BSP earlier ordered the closure of the Metro-Cebu Public Savings Bank, the Rural Bank of Mahaplag (Leyte) Inc., the Rural Bank of Salcedo (Ilocos Sur) Inc., the Rural Bank of San Lorenzo Ruiz (Siniloan) Inc., and the Rural Bank of San Nicolas (Pangasinan).

The number of problematic banks ordered closed by the central bank almost tripled to 13 last year from five in 2020 as the country has yet to fully recover from the impact of the COVID-19 pandemic.

To strengthen the sector, the central bank has rolled out of the Rural Bank Strengthening Program (RBSP) to enhance the operations, capacity, and competitiveness of the industry.