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Philippine central bank imposes sanctions on Metrobank in fraud case

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Philippine central bank imposes sanctions on Metrobank in fraud case

The Philippines central bank imposed sanctions on Metropolitan Bank & Trust Co. in connection with a 1.75 billion pesos internal fraud case.

In a statement, Bangko Sentral ng Pilipinas said it imposed the sanctions after investigating the fraud, which was perpetrated by one of Metrobank's officers. The sanctions ranged from reprimand to the suspension of the bank's directors and officers. The central bank did not disclose names of the directors and officers.

The central bank also required Metrobank to allocate 4.45 billion pesos to cover for "higher operational risk." The requirement is subject to periodic review and would be lifted when the bank is determined to have put in place adequate risk control measures. In addition, the bank is required to commit to improve corporate governance, credit administration, internal controls and audit, risk management, and customer onboarding and monitoring processes, the central bank noted.

In a filing, Metrobank said no customer was affected as a result of the "isolated incident," noting the perpetrator, Ma. Victoria Lopez, former corporate service management head of the bank, has been apprehended and cases against her have been filed.

The central bank's action came after Metrobank in October filed a lawsuit against Lopez for allegedly embezzling US$17.5 million by arranging fake loans. Lopez allegedly diverted loans assigned to a customer account to her husband and daughter, who used the funds to purchase an apartment in New York City, among other U.S. assets.

As of Nov. 27, US$1 was equivalent to 50.30 Philippine pesos.