The Regional Trial Court of Isabela has convicted the former director/president and other officers of a closed rural bank for engaging in loans beyond allowable ceilings.
Former Rural Bank of Reina Mercedes (Isabela), Inc. director and president Romeo P. Garcia and top executives of the now defunct rural lender were charged of breaking the Bangko Sentral ng Pilipinas’ (BSP) manual of regulations for banks under The General Banking Law of 2000 in relation to The New Central Bank Act.
Information show that Garcia, general manager Emelita B. Ramirez, manager/cashier Arlene C. Valenzuela, compliance officer Glena S. Valenzuela, and cashier Ofelia C. Manzano were found to have participated in questionable loans granted by RB Reina Mercedes to its own directors, officers, stockholders and their related interests or DOSRI.
They were also charged with other fraudulent or fictitious loans.
DOSRI loans are not illegal but are highly regulated to prevent abuse. Such are limited to no more than 15 percent of a lender’s loan portfolio or 100 percent of net worth, whichever is lower.
In the complaint filed by the BSP, the court found those charged guilty of violations of the provisions of the law pertaining to loans granted to DOSRI and participation in fraudulent transactions.
Accordingly, the court sentenced Garcia, A. Valenzuela, G. Valenzuela, and Manzano to imprisonment of four to six years, while Ramirez received a prison sentence of three years.
