Another rural bank falls

The Philippine Deposit Insurance Corp. (PDIC) has taken over last week The Center Rural Bank as mandatory receiver. This came after the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) ordered the bank closed last Feb. 23.

The single-unit rural bank is located at 10-B Jaysons Bldg., National Road in Muntinlupa City. As of Sept. 30, 2005, the bank had total deposit liabilities of P243.5 million consisting of 2,903 deposit accounts.

PDIC representatives are currently conducting control verification and examination of deposit and other bank records including inventory of its assets in preparation for the servicing of claims for insured deposits.

The duration of the examination will largely depend on the condition of bank records upon PDIC takeover. Depositors and creditors of The Center Rural Bank are can address all concerns and inquiries to the PDIC representatives currently deployed in the bank.

Earlier, the PDIC took over four rural banks closed by the BSP. These are the Urduja Rural Bank of Tayug in Pangasinan, the Rural Bank of Tangalan (Aklan) Inc., Merchants Rural Bank of Talavera (Nueva Ecija) Inc., and the RB of the 21st Century (Balagtas) Inc. of Bulacan.

Most of the closures stem from the institutions inability to meet the minimum capital requirements. Or others could not make the necessary adjustments in capital based on the new international accounting standards.

PDIC officials are urging troubled rural banks to merge with other institutions to avoid the difficult and costly process of receivership and liquidation. "The worst hit are the banking public and the local economies," they added.