The bank, along with its two subsidiaries, declared a voluntary bank holiday for failing to meet withdrawals and was consequently closed by the Bangko Sentral ng Pilipinas and put under the mandatory receivership of the Philippine Deposit Insurance Corporation on April 26, 2000.

After its closure and subsequent merger with Export and Industry Bank, Urban Bank shares were re-listed on the PSE under Exportbank's ticker symbol, EIB.

[citation needed] In 1995 it became the first Philippine bank to issue SEC-registered asset-backed-securities.

[6][7] The judge, Zeus Abrogar, dismissed the charges against two of the defendants, Arsenio Bartolome III and Corazon Bejasa, who had been chairman and company secretary respectively,[8] but found probable cause against the remaining respondents.

[9] On April 18, 2008, the Supreme Court of the Philippines 2nd Division the reinstatement of a PHP 4.5 billion (US$109 million) estafa case against executives of the bank including Nida S. Santos, Milagros Santiago, Rowena Punzalan, Chulla Formanes, Loida O. Payonga and Amalia Ordas.