Diokno shuts down 13 banks in 2021

The number of problematic banks ordered closed by the Bangko Sentral ng Pilipinas (BSP) almost tripled to 13 last year from five in 2020 as the country has yet to fully recover from the impact of COVID-19.

Ordered closed by the central bank’s Monetary Board last year were Opportunity Kauswagan Bank in Iloilo, Rural Bank of Nabunturan (Compostela Valley), Masantol Rural Bank in Pampanga, Rural Bank of Karomatan (Lanao del Norte), United Peoples Rural Bank, and Kaluyagan Rural Bank.

Rural Bank of Santa Fe in Romblon, Lucena-based Grand Agri Rural Bank, Rural Bank of Datu Paglas based in Maguindanao, Rural Bank of Caloocan, Rural Bank of Alimodian (Iloilo), Palm Tree Bank based in Cagayan de Oro, and Occidental Mindoro Rural Bank were likewise shut down.

The problematic banks were prohibited by the BSP from further doing business in the country pursuant to Section 30 of Republic Act 7653 or The New Central Bank Act.

State-run Philippine Deposit Insurance Corp. (PDIC) took over the closed banks and acted as receiver with a directive to proceed with the takeover and liquidation of the lenders.