BB heist: US$21.2 million fine on RCBC

Philippine banking regulators today imposed the single biggest monetary penalty on an erring financial institution in the country’s history, slapping Rizal Commercial Banking Corp. (RCBC) with a US$21.2-million ( P1-billion) fine in the wake of the cyberheist at Bangladesh Bank.

In a statement issued late Friday, Philippine central bank, the Bangko Sentral ng Pilipinas (BSP), said the penalty represents “the largest amount ever approved as part of its supervisory enforcement actions on a BSP-supervised financial institution.”

 “The Monetary Board approved the imposition of supervisory enforcement action on RCBC to pay the amount of P1 billion (US$21.2 million) in connection with the special examination conducted by the BSP,” the central bank said.

The fine levied on RCBC marks a sharp departure from BSP’s standard practice of imposing a legally mandated fine of P30,000 per violation per day on financial institutions that are found to have violated banking regulations.

 “This affirms the BSP’s strong commitment to ensure the stability of the country’s financial system through strong and effective regulations of BSP-supervised financial institutions,” the central bank said.

RCBC was embroiled in the laundering controversy last February when it was used as a conduit for the funds stolen from the Bangladeshi central bank’s accounts with the US Federal Reserve. A total of $1 billion was stolen by still unidentified hackers, but $870 million in transfers were stopped, while $81 million entered RCBC and was wired out to local casinos.

BSP added, however, that is “recognizes RCBC’s efforts in instituting changes to strengthen its anti-money laundering and counter-terrorist financing risk management system and governance culture.”

For its part, RCBC said it would comply with the fine imposed under Monetary Board resolution No. 1392 by paying the penalty to the BSP.

 “This amount shall be paid in two equal tranches over a one-year period,” the bank said, explaining that the first P500 million would be paid upon approval by the Monetary Board and the balance of P500 million one year after.

 “The special examination has been completed,” the bank said. “This pertains to the administrative proceedings taken by the BSP involving RCBC for noncompliance with the New Central Bank Act, in connection with the incidents following the $81-million Bangladesh Bank cyberheist.”

On Friday, Bangladeshi Ambassador to Manila John Gomes and officials from the Bangladesh Bank held a press conference to renew their call for the return of the stolen funds, about $15 million of which were either turned over by casino junket operator Kim Wong to the Anti-Money Laundering Council or frozen by Solaire Resort and Casino.

Gomes, in particular, pointed to RCBC’s accountability in the scheme for allowing the funds that was wired to it to be withdrawn despite having been sent “stop payment” orders by frantic Bangladeshi officials after they discovered the heist.

The Bangladeshi official said he was encouraged by the enthusiastic response he has received from officials of the administration of President Rodrigo Duterte, and said he has also asked Senate President Aquilino Pimentel III.

Copyright: Philippine Daily Inquirer/ANN