RCBC pays Bangladesh Bank heist fine in advance

RCBC pays Bangladesh Bank heist fine in advance
The listed bank fully settles its record P1-billion fine for non-compliance with banking laws and regulations in connection with the $81-million Bangladesh Bank money laundering scandal

MANILA, Philippines – Listed Rizal Commercial Banking Corporation (RCBC) settled the balance of its record P1-billion fine with the Bangko Sentral ng Pilipinas (BSP) 3 months ahead of the payment deadline.

Based on its information sheet submitted to the Philippine Stock Exchange (PSE), RCBC paid the balance of P500 million this month ahead of the August deadline.

The BSP’s Monetary Board slapped the P1-billion fine against RCBC on August 5, 2016 for non-compliance with banking laws and regulations in connection with the $81-million Bangladesh Bank money laundering scandal.

RCBC paid the first tranche amounting to P500 million on August 12, 2016. Based on the terms set by the BSP, the deadline for the second and final tranche was August 2017.

In its consolidated statement of income, the listed bank included the P1-billion fine as part of miscellaneous expenses.

“The bank does not expect these penalties to affect its ability to perform its existing obligations or unduly hamper its operations,” RCBC stated in the report.

Hackers tried to steal close to $1 billion from the Bangladesh Bank account with the Federal Reserve Bank of New York in February last year. The US bank was able to stop 30 of the 35 transactions.

However, 5 transactions involving $81 million entered the Philippines via RCBC using several fictitious accounts. The funds were laundered through several casinos as these were not covered by the Anti-Money Laundering Act (AMLA).

The scandal led to the resignation of RCBC president and chief executive officer Lorenzo Tan who was eventually replaced by former Development Bank of the Philippines president Gil Buenaventura.

The bank owned by the late taipan Alfonso Yuchengco launched numerous initiatives to reinforce its anti-money laundering framework.

It embarked on a branch transformation project, aimed at separating the sales and service function of its business centers. This led to the creation of a centralized unit acting as an additional layer to ensure the proper implementation of the Know Your Customer (KYC) policies and monitor proper adherence of bank correspondents to standard operating procedures.

RCBC also centralized the review and disposition of Base60 alerts with the anti-money laundering department and compliance office compared to its previous role as just approvers.

The listed bank invested in additional systems such as the Predator, a real-time fraud and money laundering or terrorist financing transaction monitoring system; and Accuity, a global watchlist screening online solution that can assist the current system applications in preventing the onboarding of prohibited customers.

Furthermore, the bank revamped its training modules and introduced the anti-money laundering Certification Program to ensure that all bank personnel are aware of their roles and responsibilities in the money laundering or terrorist financing framework.

These initiatives, which will run throughout the year, are geared toward minimizing the bank’s exposure to risks and strengthening its commitment to combat money laundering or terrorist financing. – Rappler.com

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