MANILA – The Land Bank of the Philippines (Land Bank) has assured the public it will not tolerate fraudulent practices, as it launched an investigation on the alleged illegal profiteering of some bank insiders who act as "go-betweens" or "agents" in loan applications.
The government-owned bank made the statement in response to House Resolution 2543 filed by ACT CIS party-list Rep. Rowena Niña Taduran seeking a congressional inquiry into the loan scheme where these agents promise the fast approval of a loan in exchange for a cut of 10 percent in the loan proceeds.
"The Land Bank of the Philippines is conducting an investigation on the alleged loan scheme raised by the president of the American Boulevard Trading Corporation (American Boulevard)," Land Bank said in a statement on Wednesday.
In her resolution, Taduran cited the case of American Boulevard president Alberto Ching who applied for an initial loan of PHP50 million.
She said a significant part of the said loan amount was not released to Ching despite the receipt by the LBP insiders of their 10-percent cut.
Land Bank, for its part, said it implements stringent vetting processes in granting and implementing loans, based on its existing policies and all other pertinent banking rules and regulations.
It further noted that high ethical standards are maintained in the workplace, hence any violation by its employees would be taken "very seriously".
"The Bank assures the public that it will not tolerate fraudulent practices opposite to its brand of public service for over 58 years, anchored on integrity, transparency, and accountability," it said.
Taduran said Ching's firm defaulted on its payments to suppliers and other creditors, which eventually led to the closure of the business and the loss of livelihood of its employees.
The lawmaker wrote a letter to ask the LBP management to look into Ching's case.
The bank, Taduran said, conducted an internal investigation and terminated the involved employees, and filed cases against them.
However, LBP did not offer any redress to American Boulevard for the "irreparable damage" caused to it, she noted.
She also cited 30 other borrowers who were victimized by this loan scheme of these LBP insiders, with loans amounting to less than PHP100 million and even more than the said amount.
"Considering the huge amounts of the loans, it is highly improbable that low-ranked LBP employees acted without the cooperation/approval of the 'higher-ups'," she said.
Taduran said it is urgent for the House to look into this matter given the magnitude of the loan amounts involved, the involvement of a government-owned financial institution, and the possible effect it could have to erode the public's trust in the banking system.
"Congress is duty-bound to protect the borrowing public as well as the entire banking system from nefarious practices of unscrupulous bank personnel," she said. (PNA)
