Bangko Sentral ng Pilipinas (BSP), the central bank of the country, has shut down operations of two local banks.

The two shuttered banks are AMA Rural Bank of Mandaluyong and Maximum Savings Bank.

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The decision was taken by the Monetary Board (MB), the policy-making body of the BSP, under Section 30 of Republic Act No. 7653 (The New Central Bank Act).

The move is not expected to affect the country’s banking industry in a negative way due to the banks’ small size, BSP noted.

The assets of AMA Rural Bank of Mandaluyong and Maximum Savings Bank were around 0.02% and 0.002%, respectively, of the total Philippine banking assets.

With its main office in Mandaluyong City, AMA Rural Bank of Mandaluyong operated ten branches. Maximum Savings Bank had three branches, including its main office in Batangas City.

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In a statement, BSP said: “The overall Philippine banking system remains sound and stable with ample liquidity and high level of capitalisation as BSP continues to promote good governance among its supervised institutions to ensure the soundness of the banking system and to protect the interest of the banking public.”

It added that the customers of the two-shuttered banks can approach the Philippine Deposit Insurance Corporation (PDIC) for deposit claims.

Last month, BSP was reportedly said to be mulling the option of granting domestic lenders permission to launch Islamic banking units. The move is part of the government’s strategy to encourage Shariah-compliant banking services in the Philippines.