RCBC to pay fine in 2 tranches

MANILA - (2nd UPDATE) The Bangko Sentral ng Pilipinas' Monetary Board said Friday it asked Rizal Commercial Banking Corp. (RCBC) to pay a record P1 billion fine following an investigation on a $81-million heist on Bangladesh's foreign reserves.

The move of the BSP's policy-making body affirms its "strong commitment to ensure the stability of the country’s financial system through strong and effective regulation" of financial institutions, the regulator said in a statement.

"The BSP recognizes RCBC’s efforts in instituting changes to strengthen its anti-money laundering and counter-terrorist financing risk management system and governance culture," it said.

RCBC will pay the P1 billion in two equal tranches over a one-year period, the bank said in a statement.

Neither the BSP nor RCBC elaborated on the grounds for the fine, the largest ever imposed on an institution.

In February, unidentified hackers shifted $81 million from the Bangladesh central bank's account with the New York Federal Reserve to RCBC's branch in Jupiter, Makati.

Most of the money was converted into pesos before it ended up in casinos, where the trail went cold with only $18 million recovered by Philippine authorities.

The incident highlighted vulnerabilities in the country's banking and money-laundering monitoring systems that have made it a destination for "dirty money."

A team from the impoverished South Asian nation was in Manila this week to press the new government of President Rodrigo Duterte for help in recovering the money.

RCBC RESPONSIBLE

The record fine and the earlier resignation of RCBC president, Lorenzo Tan, indicated that the bank was “definitely responsible” for the disappearance of the money, Bangladesh’s Ambassador to the Philippines John Gomes told reporters.

Gomes also cited revelations during a Senate investigation that RCBC failed to stop the release of the money from four accounts in its Jupiter, Makati branch despite warnings from the New York Federal Reserve.

“If they put the red flag on, then nothing of all this would have happened. I still believe RCBC has to answer,” he said.

“The resignation of the RCBC president, the resignation of the chief of the treasury [of RCBC], obviously these are indicating that they are definitely responsible,” he added.

The lawyer of the Bangladesh central bank, Ajmalul Hossain, said he would not sue RCBC but would press for the return of their money.

“There may not be a need to do that. We know the challenges that they face. We know their weaknesses. We know what (the) red flags were. Bangko Sentral knows, AMLC knows, everyone knows. They will have to face those challenges later on,” Hossain said.