DHAKA, Bangladesh (4th UPDATE) – Bangladesh’s central bank chief resigned on Tuesday, March 15, after hackers stole $81 million from the nation’s foreign reserves in one of the biggest bank heists in history, the finance minister said. (READ: How Bangladesh Bank dirty money easily got into PH)
The audacious cyber-theft has embarrassed the government, triggered outrage in the impoverished country, and raised alarm over the security of the country’s foreign exchange reserves of over $27 billion.
On Tuesday the finance minister said Atiur Rahman had stood down at his request, after revealing that the Bangladesh Bank governor failed to inform authorities of the theft for a month.
“He called me yesterday and I’ve asked him to resign. And he has resigned today,” minister A.M.A. Muhith told AFP, adding that the government has ordered a probe into the heist.
On February 5, the hackers stole $81 million from an account that Bangladesh held with the Federal Reserve Bank of New York and transferred the cash electronically to accounts in the Philippines. (WATCH: Philippine Senate hearing on $100-M Bangladesh bank fund heist)
They attempted to steal almost $1 billion and were only prevented from taking more because of a basic typing error, the Bangladesh Bank’s deputy governor told AFP last week.
Before his resignation, an emotional Rahman said he was alarmed by the hack but did not comment on why he took so long to report the missing money.
“This event was almost like a militant attack, almost like an earthquake. I did not realise how it happened, from where it originated and who had done it,” he said, choking back tears.
“When I was informed I was so puzzled. Fearing that it might destroy our economy, I quickly took opinion of the experts. I brought them to the country from abroad and ensured security so that it did not occur again.”
Rahman, a 64-year-old economist and former university professor, was appointed as the governor of the Bangladesh Bank in 2009 and had been due to retire in August.
As details of the scandal emerged last week, he flew to India to attend an International Monetary Fund meeting, leaving junior central bank officials scrambling to explain how the hackers managed to take such large sums.
Some of the funds have been recovered and Filipino authorities have frozen the stolen money following court orders, Bangladesh Bank has said. It suspects the hackers were Chinese.
The thieves, who bombarded the New York bank with dozens of transfer requests, had been attempting to steal a further $850 million, but the bank’s security systems and typing errors in some requests prevented the full theft.
The hack took place on a Friday, when Bangladesh Bank is closed, while the Federal Reserve Bank in New York is closed on Saturday and Sunday.
The US reserve bank, which manages the Bangladesh Bank reserve account, denied its own systems were breached.
The $81 million was transferred to four accounts at the Filipino Rizal Commercial Banking Corporation (RCBC) – and were then transferred to an account belonging to ethnic Chinese businessman William So Go, a Senate inquiry in the Philippines heard.
Go then transferred the money to Filipino casinos, Julia Bacay-Abad from the Philippines’ anti-money laundering council told the hearing on Tuesday.
Go’s lawyer said the businessman’s signatures for his now-frozen RCBC account, which were used to transfer the money, had been forged.
Rahman launched a series of populist policies to take bank services to the doorstep of millions of rural poor in Bangladesh.
But his tenure was marred by a spate of high-profile banking scams in which state-owned banks lost hundreds of millions of dollars in bad loans.
On Tuesday he said authorities were still mystified by the attack as he defended his decision to delay informing the government. He added that making the news public earlier would have risked tipping off the hackers.
“I don’t deny that I took time (to inform the finance minister). It was a cyber attack and even today we don’t know from where it originated,” he said. – Shafiqul Alam, AFP/ Rappler.com