BSP orders closure of Rural Bank of Magallon

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of a problematic bank — the 20th this year — as part of efforts to weed out weak players in the industry.

The BSP has issued a resolution prohibiting Community Rural Bank of Magallon (Moises Padilla, Negros Occidental) Inc. from doing business in the Philippines.

State-run Philippine Deposit Insurance Corp. (PDIC) took over the bank last Friday.

PDIC said in a statement Community Rural Bank of Magallon is a single-unit rural bank located at Gomez St., Moises Padilla, Negros Occidental. 

The bank’s latest Bank Information Sheet showed it had 1,315 accounts with total deposit liabilities of P28.5 million as of end-June. Total insured deposits amounted to P24.5 million involving 85.9 percent of total deposit accounts.

PDIC assured depositors that all valid deposits and claims 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 are eligible for early payment and need not file deposit insurance claims.

The state-run deposit insurer urged all depositors and borrowers of the closed bank to attend the Depositors-Borrowers’ forum on Dec. 2. 

Last year, the BSP shut down 14 problematic banks.

 BSP Deputy Governor Nestor Espenilla Jr. earlier said the country’s banking system has evolved over the years with the closure of some players as well as the mergers and consolidation of the others.