THE Regional Trial Court of Isabela has convicted the former director/president and other officers of the closed Rural Bank of Reina Mercedes (Isabela) Inc. (RB Reina Mercedes) for violating the New Central Bank Act.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said the criminal cases that were filed accused the former director/president, general manager, manager/cashier, compliance officer and cashier participated in questionable loans granted by the bank to its directors, officers, stockholders and their related interests (Dosri).
BSP said this violates the Manual of Regulations for Banks (MORB) and Republic Act 8791 (The General Banking Law of 2000 in relation to RA 7653 or The New Central Bank Act).
“Based on the complaint filed by the BSP, the court found all the accused guilty beyond reasonable doubt of violations of the provisions of the law pertaining to loans granted to Dosri and participation in fraudulent transactions,” read the statement by the central bank last Wednesday.
Accordingly, the court sentenced the rural bank’s president, the manager/cashier and the cashier to imprisonment of four years to six years, while the general manager received a prison sentence of three years.
The compliance of BSP-supervised institutions with laws and regulations promotes the soundness of the financial system as well as the welfare of depositors and the general public.
In January, the BSP Regional Trial Court of Burauen, Leyte (RTC-Burauen) convicted a former officer of the now-closed Rural Bank of Burauen (Leyte) Inc. for the same violation.
Section 36 of the MORB provides that whenever a bank or quasi-bank, or whenever any person or entity willfully violates the New Central Bank Act and other pertinent banking laws being enforced or implemented by the BSP or any order, instruction, rule or regulation issued by the Monetary Board, other person or persons would be fined P50,000 to no more than P200,000.
The person or persons responsible may also face imprisonment of not less than two years but not more than 10 years or both at the discretion of the court.
“Whenever a bank or quasi-bank persists in carrying on its business in an unlawful or unsafe manner, the Board may, without prejudice to the penalties provided in the preceding paragraph of this section and the administrative sanctions provided in Section 37 of this Act, take action under Section 30 of this Act,” the law also stated.