At least four rural banks have gone to the central bank to seek emergency loans after depositors got spooked with the series of closures in December.

Sources from the central bank said the rural banks that sought the emergency loans had blamed ?contagion? for the heavy withdrawals. The central bank declined to identify the banks.

Emergency loan requests of rural banks are not expected to exceed P50 million each because of their small deposits.

The central bank listed 672 rural banks as of end-September last year with combined deposits of P113 billion.

Banks seeking emergency loans from the central bank may borrow as much as half of their deposits provided they have the collateral to back up the request.

The central bank closed 15 rural banks in December. Thirteen of the closed rural banks were allegedly part of the Legacy Group of companies that had offered unsustainably high yields to attract depositors.

Some of the banks under the Legacy Group declared bank holidays in December, prompting the central bank to close and put them under the receivership of Philippine Deposit Insurance Corp. The bank holidays declared caused panic among depositors of other rural banks, resulting in huge withdrawals.

PDIC is in the process of validating deposit insurance claims from the close rural banks.

The Rural Bank of Para?aque was the first in the group closed by the central bank. The bank, closed on Dec. 9 and the flagship unit of the Legacy Group, accounted for some P9 billion of the P15- billion deposits in the group.

On Dec. 11, the central bank closed Rural Bank of Nueva Caceres (Naga City), Pilipino Rural Bank in Cebu, Rural Bank of Bais in Negros Oriental and Rural Bank of San Jose in Batangas.

On Dec. 12, the central bank closed Bank of East Asia (formerly Banco Rural de Bisayas, Minglanilla, Cebu), First Interstate Bank (formerly the Rural Bank of Kananga, Leyte) and Philippine Countryside Rural Bank in Cebu.

On Dec. 16, two more allegedly under the Legacy Group were closed?the Dynamic Bank (formerly the Rural Bank of Calatagan) and the San Pablo City Development Bank. Eileen A. Mencias