Bank gets record fine for Bangladesh heist

The Myanmar Times - - International Business -

THE Philip­pines Cen­tral Bank has handed a lo­cal bank a record US$21 mil­lion fine af­ter it was used by hack­ers to chan­nel mil­lions of dol­lars stolen from Bangladesh into lo­cal casi­nos.

In Fe­bru­ary, cy­ber crim­i­nals shifted $81 mil­lion from the Bangladesh cen­tral bank's ac­count with the US Fed­eral Re­serve to a Manila branch of the Rizal Com­mer­cial Bank­ing Corp (RCBC), from where it was fun­nelled into lo­cal casi­nos.

The cen­tral bank said it had ap­proved the record 1 bil­lion pe­sos ($21 mil­lion) fine af­ter a “spe­cial ex­am­i­na­tion” of the bank and its role in the au­da­cious cy­ber heist.

The fine was part of its “su­per­vi­sory en­force­ment ac­tion on RCBC”, the cen­tral bank said in a state­ment.

RCBC said sep­a­rately that it had made pro­vi­sions for the fine and would pay it in two in­stal­ments over a one-year pe­riod.

The to­tal was equiv­a­lent to more than 38 per­cent of the 2.6 bil­lion pe­sos it earned in net prof­its dur­ing the first half of 2016.

But it added, “The pay­ment of the amount will not af­fect the op­er­a­tions of RCBC, and cap­i­tal ra­tios will con­tinue to be strong.”

The brazen cy­ber heist high­lighted how the Philip­pines’ bank­ing loop­holes and anti-money laun­der­ing laws have made the im­pov­er­ished and cor­rup­tion-weary na­tion a dirty money des­ti­na­tion.

Philip­pine law ex­empts casino trans­ac­tions from scru­tiny by the coun­try's anti-money laun­der­ing coun­cil with­out a case filed in court.

Filipino au­thor­i­ties now say they have tracked down all but $21 mil­lion of the loot, but have only re­cov­ered a frac­tion of it.

The Philip­pines’ Anti-Money Laun­der­ing Coun­cil has filed a suit in Manila to gain con­trol of the al­leged stolen funds from RCBC, the casi­nos and a Manila-based Chi­nese casino op­er­a­tor.

But the process is ex­pected to take years, with Bangladesh voic­ing frus­tra­tion at the slow pace of the re­turn of sur­ren­dered funds.

The Bangladesh theft was one of a se­ries of spec­tac­u­lar cy­ber at­tacks against banks this year that have height­ened fears the in­dus­try is be­com­ing an in­creas­ingly at­trac­tive tar­get for hack­ers. –

Photo: EPA

(From left) Joint di­rec­tor of the Bangladesh Fi­nan­cial In­tel­li­gence Unit Mo­ham­mad Ab­dur Rab, Bangladesh am­bas­sador to the Philip­pines John Gomes and deputy gen­eral man­ager of the Ac­count­ing and Bud­get­ing De­part­ment of the Bangladesh Bank Jaker Hos­sain at­tend the money laun­der­ing hear­ing in Manila.

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