MADRID • Former IMF chief Rodrigo Rato was handed a jail sentence of four years and six months yesterday, for misusing funds when he was the boss of two Spanish banks.

Spain's National Court, which deals with corruption and financial crime cases, said he was found guilty of embezzlement from his time as head of Caja Madrid and Bankia, when both groups were having difficulties.

Rato, who is also a former economy minister, went on trial along with 64 former executives and board members from the banks.

They were accused of misusing €12 million (S$17.9 million) between 2003 and 2012 - sometimes splashing out at the height of Spain's economic crisis.

They allegedly paid for personal expenses with credit cards put at their disposal by Caja Madrid and Bankia, without ever justifying the expenditure or declaring them to tax authorities.

According to the indictment, Rato maintained the "corrupt system" established by his predecessor Miguel Blesa when he took the reins at Caja Madrid in 2010.

He then replicated the system when he took charge of Bankia, a group born in 2011 out of the merger of Caja Madrid with six other savings banks, prosecutors said.

Blesa was sentenced to six years in jail.

Rato had always denied any wrongdoing.

He said the credit cards were for discretionary spending as part of executives' pay deals.

AGENCE FRANCE-PRESSE