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PDIC charges BMS Rural Bank President, former officers for fictitious loans

Date of Release: November 26, 2019

The Philippine Deposit Insurance Corporation (PDIC) filed before the Department of Justice (DOJ) Task Force on Financial Fraud a criminal complaint against the former President and officers of the closed BMS Rural Bank, Inc. for falsification of commercial documents under the Revised Penal Code and violation of the PDIC Charter.

BMS Bank was ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas and placed under PDIC receivership on 24 May 2010. Upon PDIC’s investigation, it was discovered that the respondents created two fictitious loans totaling P2.06 million.

PDIC investigation further revealed that respondents falsified the bank’s promissory notes, disclosure statements and loan sheets to make it appear that the alleged borrowers obtained loans from BMS Bank. In their affidavits, the alleged borrowers denied obtaining loans from the bank, citing that their signatures on the promissory notes were forged. Two of the alleged borrowers were found to be outside the country when the purported loans were transacted, making it impossible for them to sign off personally on the loan documents.

The filing of cases against erring individuals is in support of PDIC’s efforts to bring to justice parties that engage in anomalous, fraudulent and irregular acts that pose risk to depositors and the Deposit Insurance Fund, PDIC’s main fund source for payout of deposit insurance claims. PDIC continues to pursue legal actions against bank officials and personnel who engage in unsafe or unsound banking practices that threaten the stability of the country’s banking system. PDIC is mandated by its Charter to generate, preserve, maintain faith and confidence in the country’s banking system, and protect it from illegal schemes and machinations.

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The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is PhP500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

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