Malle Ennmaa is the first person to be convicted under the law that provides a legal basis to curb corrupt business practices.
Prosecuting attorney Kristel Sittam praised the ruling saying it was a step in the right direction for the country that is fighting hard to increase transparency at all levels of negotiations.
"This ruling shows that persons in high positions finally have to become responsible for their actions," she said.
The court also ordered Ennmaa to pay 29.5 million kroons ($1.7 million) to the Rural Life Loan Guarantee Fund which lost most of its money when Maapank went bankrupt two years ago. At the time, the bank was the sixth largest credit institution in Estonia.
Ennmaa's right to work in any managerial position was also revoked by the court's May 24 ruling.
Ennmaa denied any wrongdoing and submitted an appeal to the ruling to the higher circuit court.
"I hoped that the court would make a just decision. I have not taken part in the actions that I am accused of and neither have I worked in my own personal interests," she said after the ruling, according to wire reports.
Claims of more than 1 billion kroons ($58 million) have been submitted against Maapank including 800 million kroons of state money that was lost.
Ennmaa was sentenced for using the money of the rural life fund for increasing the equity capital of Maapank and for maintaining her high salary and top position at the bank.
During the trial, Ennmaa claimed that she used the money in the interests of 200,000 clients and 3,000 shareholders of Maapank. Further, she said that government and central bank officials had given her permission to use the money of the fund.
MP Jaanus Mannik, chairman of the parliamentary committee investigating the Maapank scandal, said the central bank should have prevented the use of the funds in the first place, "which is the basis of the court case."
"The question is, why wasn't this done by the central bank inspectorate?" he said.
Eesti Pank had no comment on the ruling, said central bank spokeswoman Kaja Kell.
During the 1998 bankruptcy proceedings, the central bank inspectorate investigated the circumstances surrounding Maapank's crash and alleged cases of mismanagement and problems in the internal audit reports and credit department.
Mannik said he was in no position to criticize or praise the decision by the lower court - and he believes the circuit court will affirm the ruling - but he hoped the decision would have a positive effect on Estonia's task to stop corruption.
"Every fair decision will hopefully have a positive influence and obstruct criminal activity," he said.
In addition to the Anti-Corruption Law, the State Procurement Act, State Assets Act, Local Government Organization Act and others provide Estonia with the necessary legal structure to prosecute people involved in corruption.
Laws aren't enough, though, say some scholars.
"The issue is that we should not rely just on legal measures," commented Peep Pruks, a law professor at Tartu University's Institute of Public Law. "Law is per se an effective instrument but it is much more important to develop a system in which the mechanism of decision-making is transparent, comprehensible and controllable."
While the Maapank ruling may set a legal precedent, said Pruks, who is also the chairman of the board at the Open Estonia Foundation, societal behavior will ultimately decide the effectiveness of the laws.
"Most important is that combating of corruption should not be confined just to single cases," he said. "Society's desire to satisfy its feeling that the 'justice was done' is understandable in this particular case. But this should not be restricted to single cases. Corruption is a much wider social phenomenon... We need a systematic analysis and evaluation - do the laws work, where are the short- comings, which decision mechanisms should be changed."
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