The defendants allegedly used "unofficial" company credit cards for luxury purchases, unconnected with their duties as board members.
Prosecutors say about €12m (£10.4m; $13.5m) was spent on hotels, fine clothes, entertainment and travel.
Mr Rato denies wrongdoing. Bankia was rescued in 2012 at huge public expense.
The unofficial credit card purchases were not declared to the tax authorities. The system allegedly started at Caja Madrid bank and was continued by Mr Rato when Bankia was created in 2011.
