MANILA - (UPDATE) The Monetary Board of the Bangko Sentral ng Pilipinas said Tuesday it sanctioned Metrobank over alleged fraudulent transactions worth P1.75 billion.

Bank officers who were "complacent or remiss" in their duties should face reprimand or suspension, the Monetary Board said in a statement posted on the central bank website.

Metrobank was also required to allocate P4.45 billion of its capital to cover for "higher operational risk," the regulator said.

It was the second time in a year that regulators sanctioned a bank over alleged fraud. In August 2016, RCBC was fined a record P1 billion after a portion of the $81 million that was stolen from Bangladesh's foreign reserves was shifted to one of its branches.

In July this year, Metrobank executive Maria Victoria Lopez, who had worked for the Ty-owned lender for 3 decades, was arrested after she allegedly attempted to shift P2.25 million in interest from unauthorized loans.

The interest payment was for one of 2 borrowings from a P25-billion pool. The bank's client, which was authorized to borrow from the fund, denied executing the 2 loans worth P900 million and P850 million, officials said.

Lopez allegedly directed the issuance of a manager's check, a "red flag" because such checks are issued only to corporate clients, according to the National Bureau of Investigation.

She was later charged with theft and falsification for allegedly forging signatures and breaching protocols to defraud the bank.

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"Together with medium to long term initiatives that will serve to improve governance, controls, and compliance, the MB reaffirms the safety and soundness of MBTC," the Monetary Board said.

Metrobank said the case was "isolated" and that no customer was affected.

"The board and senior management accept accountability and command responsibility for the incident and commits to implementing the directives. MBTC assures the public that bank operations remain business as usual," the bank said.

The bank said it was in a "strong position" to set aside P4.45 billion of capital reserve with its P2 trillion in assets and P210 billion in equity.

Shares of Metrobank closed 2 percent higher to P95.80 on Tuesday, bucking a 0.83 percent decline in the main index.