Rural bank executive arrested

MANILA, Philippines - The former president of a closed Legacy-related bank was arrested last week in connection with a case for unsafe and unsound banking practices filed by the Philippine Deposit Insurance Corp. (PDIC).

Romualdo I. Lugtu, former president of the closed The Center Rural Bank (The Center RB) and former director and vice president for loans and credit of the closed Banco Parañaque, another Legacy bank, was arrested at the PDIC Ayala Office by operatives of the Makati Police who responded to a call for assistance by PDIC. Lugtu and two other officers of the bank were charged for defrauding the bank through creation of a fictitious loan.

The Center RB was the first of the Legacy-affiliated banks ordered closed by the Monetary Board in 2006 by virtue of MB Resolution No. 237 dated February 23, 2006. PDIC took over the bank on Feb. 24, 2006.