THE COURT of Appeals (CA) Manila 11th Division upheld an administrative indictment against a former Rizal Commercial Banking Corp. (RCBC) Bacolod branch manager for unsound banking practices, the Philippine Deposit Insurance Corp. (PDIC) said.

The court upheld the Bangko Sentral ng Pilipinas’ Monetary Board’s (MB) resolution directing the filing of a formal charge against Andrew A. Jereza.

Mr. Jereza had accepted second-endorsed crossed checks for a deposit to an account other than the payees of those checks, the PDIC said in a statement on Tuesday.

He is charged with conducting banking business in an unsafe or unsound manner under Republic Act No. 7653 or The New Central Bank Act, as well as Republic Act No. 8791 or the General Banking Law of 2000.

The central bank’s policy-making Monetary Board in December 2018 and February 2020 ordered the closure of 13 banking institutions it collectively referred to as “legacy banks.” These banks had a total of 29 units with estimated insured deposits of P14.1 billion.

The PDIC paid the deposit insurance claims of the concerned clients through crossed checks “for payee’s account only.” These payments are drawn against the PDIC’s depository account with the Land Bank of the Philippines.

However, 683 returned cleared checks with a total amount of P98.73 million paid to 86 depositors were deposited into a single account with RCBC Bacolod via a second endorsement.

The court said the deposit of these checks into a single account in a questionable manner serves as a prima facie case against Mr. Jereza for doing business in an unsafe and unsound manner.

The PDIC said it will continue to go after erring bank officials that take advantage of the deposit insurance system for personal gain.

“The corporation’s vigorous legal actions are critical in protecting the interests of the depositors and the Deposit Insurance Fund, PDIC’s funding source for payment of deposit insurance; and in deterring other parties from taking advantage of the deposit insurance system,” the PDIC said. — Jenina P. Ibañez