THE Monetary Board has ordered a rural bank based in Abra closed and placed under receivership of the state-run deposit insurer.
In a circular released over the weekend, the central bank said the Monetary Board placed the Rural Bank of Villaviciosa Inc. under the receivership of the Philippine Deposit Insurance Corp. (PDIC).
The Monetary Board said that with the closure, the rural bank is now prohibited from doing business in the Philippines and its assets and affairs are now under the control of the PDIC.
Depositors of closed banks under PDIC receivership are entitled to be paid up to the maximum insurance coverage of P500,000.
According to the PDIC, depositors with valid deposit accounts of P100,000 and below shall be eligible for early payment and need not file deposit insurance claims, except when they have outstanding obligations with the closed bank or acted as co-makers of obligations and have incomplete or have not updated their addresses.
The Rural Bank of Villaviciosa Inc. is the first rural bank to be placed under PDIC receivership this year.
In 2015, the Monetary Board closed down and placed 14 banks under PDIC receivership, a slight improvement from the 15 closed banks in 2014.
Earlier, the PDIC said it is optimistic that there will be fewer bank closures this year following implementation of the Consolidation Program for Rural Banks (CPRB).
The CPRB, a two-year program that aims to strengthen the operations of rural banks in the country by encouraging them to consolidate, is gaining interest from small lenders, the central bank earlier said.
Jointly conceptualized by the central bank, the PDIC and the Land Bank of the Philippines, the program seeks to enable rural banks to improve their financial strength, enhance their viability, strengthen management and governance, generate synergies and economies of scale through common infrastructure systems and resources; and expand their market reach.
At present, the state deposit insurer said eight groups of small banks have already expressed their interest to consolidate under the program.