THE CENTRAL bank has imposed a P1-billion fine on Rizal Commercial Banking Corp. (RCBC) in connection with the Yuchengco-led bank’s involvement in the $81-million Bangladesh Bank heist.
The policy-making Monetary Board (MB) approved the “supervisory enforcement action” on RCBC following a special examination, the Bangko Sentral ng Pilipinas (BSP) said in a statement.
This is the largest fine ever imposed by the BSP on a financial institution.
“This affirms the BSP’s strong commitment to ensure the stability of the country’s financial system through strong and effective regulation,” the BSP said.
The central bank, however, added that it “recognizes RCBC’s efforts in instituting changes to strengthen its Anti-Money Laundering (AML) and Counter-Terrorist Financing Risk Management System and governance culture.”
Bangladesh Ambassador to Manila John Gomes said the imposition of the P1-billion fine on RCBC was a “positive thing.”
“We are happy with how the Philippines government, especially with the new administration, is handling the issue,” he said in a press conference on Friday.
In February, hackers supposedly stole $81 million from a Bangladesh Bank account at the Federal Reserve Bank of New York City.
The funds were then deposited in accounts opened at RCBC’s Jupiter Street branch in Makati.
Casino junket operator Kim Wong, one of the individuals supposedly involved in the heist, has returned $4.63 million and P488 million in cash to the Anti-Money Laundering Council (AMLC).
This represents the entire amount that Wong and his company, Eastern Hawaii Leisure Ltd., received from the $81 million in laundered funds.
A team from Bangladesh Bank is in the Philippines to discuss with authorities the recovery of some $15 million surrendered to the AMLC by Wong. Another high-level delegation is set to arrive next month.
Bangladeshi officials discussed with the Philippine Amusement and Gaming Corp. (Pagcor) the recovery of $2.38 million frozen at the Solaire casino, Gomes said.
“The Pagcor chairperson and president assured us of their cooperation in this regard. They said that if Solaire receives any court order, they would release the money,” he said.
The Justice department also vowed to assist Bangladeshi officials in the AMLC recovery process, and Senate President Aquilino Pimentel 3rd promised to reopen an investigation into the heist, Gomes added.
RCBC to comply
For its part, the RCBC said it will comply with the BSP order and pay the P1-billion fine in two equal tranches over a one-year period.
RCBC President and Chief Executive Officer Gil Buenaventura said that while the fine involved a large amount, “RCBC believes that this is part of increasing regulatory oversight and restrictions and we will comply with the MB Resolution.”
Buenaventura said with the payment, RCBC was affirming its “continued viability and determination to fulfill its firm commitment against money laundering, terrorism and other transnational crimes to ensure the stability of the banking system.”
“Together with the payment of this amount, RCBC is instituting changes in its AML system and processes, making it among the most prepared in terms of thwarting money laundering attempts in the Philippines and the region,” he added.
He said RCBC’s focus was to move forward and continue a program to put in place more robust processes, systems, and checks and balances.
Buenaventura also said the payment of the amount won’t affect the operations and capital ratios of RCBC.
For the first half of this year, RCBC recorded a net profit of P2.6 billion. Its capital base as of June 2016 stood at P59.9 billion.
“We appreciate the efforts of the Bangko Sentral ng Pilipinas to keep the banking sector prepared and strong. We will continue to cooperate with BSP in this endeavor,” Buenaventura said.