The Bangko Sentral ng Pilipinas (BSP) has blacklisted several officers, directors and individuals of closed rural banks in an effort to rid the industry of staff and higher-ranking officials with doubtful backgrounds.

Sources said former officers and directors of four closed rural banks were the newest names placed on the watch list.

The list of people under suspicion or blackballed are not disclosed but the banks had been identified as Rural Bank of of Tangalan (Aklan) Inc., Merchants Rural Bank Talavera Inc., People’s Rural Bank Binmaley Inc. and G7 Bank, formerly the Rural Bank of Nabua.

The BSP approves all banks management staffing, especially senior bank executives.

Several years ago, Albay Mayor Celso de los Angeles, the owner of the Legacy Group and its affiliated rural banks, was on the BSP’s blacklist but his name was removed because the complainants that originally petitioned for his inclusion in the watch list never followed through on their grievances.

The 12 rural banks closed down by the BSP in December for unsafe and unsound banking practices was part of the Legacy Group. The government through the Philippine Deposit Insurance Corp. will have to pay the banks depositors P14 billion.

In 2007, the BSP reviewed its watch list of “bad bankers” or bank officers and directors – who at one time in their careers failed the fit-and-proper rule.

The central bank has a temporary and permanent list and anyone in it went through review by the Monetary Board, the BSP’s policy-making arm.

Sources said the BSP has 700 of these bank officials that were blacklisted and currently under watch. At the moment, the central bank is reviewing this list to see if they deserve to be there and if not, due process will be given.

The same sources said that a purging may happen because one, the officer or director may have corrected his or her bad record and two, they are unaware they are blacklisted.

The “fit and proper” rule is a provision of General Banking Act of 1949 and the General Banking Law of 2000.

Both laws allow the BSP to prescribe the qualifications and disqualifications of individuals elected or appointed as directors or officers of banks and quasi-banks. Under the BSP's “fit and proper” rule, any person who is charged or is found culpable or guilty of an administrative liability, as may be determined by other government agencies, could be disqualified permanently or temporarily.

Persons permanently disqualified from holding director or officer positions in banks are not only those who have been convicted by final judgment for offense involving dishonesty or breach of trust (such as embezzlement, extortion etc.) but also those convicted by final judgment for bribery, falsification as well as violations of the Anti-Graft and Corrupt Practices Act.