BSP fines RCBC P1B over Bangladesh heist

“The Monetary Board (MB) approved the imposition of supervisory enforcement action on RCBC to pay the amount of P1 billion, in connection with the special examination conducted by  the BSP relating to the Bangladesh Bank cyber heist,” the central bank said in a statement on Friday, August 5.

This, it added, is the largest amount ever approved as part of its supervisory enforcement actions on a BSP-supervised financial institution (BSFI).

“This affirms the BSP’s strong commitment to ensure the stability of the country’s financial system through strong and effective regulation of BSFIs,” the BSP said.

Despite the record fine, the central bank did point out that it recognized RCBC’s efforts “in instituting changes to strengthen its Anti-Money Laundering and Counter-Terrorist Financing Risk Management System and governance culture.”

RCBC to pay in 2 tranches

RCBC said it would comply with the fine, officially imposed under MB Resolution No. 1392, by paying the P1 billion to the BSP.

This amount, RCBC said in a statement Friday, “shall be paid in two equal tranches over a one-year period, P500 million upon approval by the Monetary Board and P500 Million one year after.”

RCBC dominated the headlines earlier this year after details came to light that $81 million dollars stolen from the Bangladeshi central bank made its way into the country, laundered through RCBC employees, ending in Philippine casinos.

While the government has managed to trace most of the $81 million, around $17 million is still unaccounted for which has prompted the Bangladeshi ambassador to seek help from President Rodrigo Duterte.

"We are pinning our hopes on the new administration for the recovery of our money," Bangladesh Ambassador to the Philippines John Gomes said in a news briefing on Friday.

He said a high-level Bangladesh government delegation, which he hopes would include the finance minister, is due to arrive in late September in Manila in a bid to fully recover the stolen funds.

The scandal has rocked the Yuchengco-led bank and led to the resignation of RCBC President and CEO Lorenzo Tan as well as RCBC treasurer Raul Victor Tan. The bank also reorganized its board, increasing the number of independent directors to 7 from the previous 4.

While RCBC saw its stock plunge immediately after the scandal came to light, the bank has since recovered, posting a net income increase of P2.61 billion for the first half of the 2016.

No plans to sue 

"This fine and the resignation of RCBC president and treasurer indicate that they are definitely responsible," said Bangladesh Ambassador to the Philippines John Gomes at a press conference held at the Bangladesh embassy also on August 5.  

RCBC played a role as they did not abide by the urgent stop payment request and went on to process the transactions involving the stolen funds last February 9, the Ambassador explained.

"If they have stopped it, then nothing would have happened,” Gomes said, “the Philippines would not be projected as it is now being projected in the world".

Despite this, Bangladesh Supreme Court senior advocate Ajmalul Hossain said there are no plans to sue RCBC.

Hossain explained that there is no need to sue the bank as it is confident that it could recover the entire amount. – Rappler.com