RCBC fined P1B over Bangladesh money heist

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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.

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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.

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10 Comments

  1. Eloisa Concepcion on

    RCBC is a reputable bank and has always complied with the law. Their paying the fine is just another proof to that commitment. Looks to me that RCBC should be among the most prepared among local banks because of this experience and because of its positive and constructive approach to the issue.

    Bangladesh Bank on the other hand wants shortcuts and relies on their sob stories and bullying the Philippine government to do as they wish. WHy can’t they follow procedure and sue? Because they have a weak case? Could be the reason why they stopped their own investigation?

    And yet here they are bullying our government, like how Bangladesh Ambassador to the Philippines John Gomes bullies his maids and steals from their salary and has the audacity to call Pinoys thieves and prostitutes.

  2. auto-correct can be tiresome…I meant Deguito, not Digit. “Deguito should get it too for being complicit.”

  3. Not more about the money, but this is a humble man with principle, RCBC President and Chief Executive Officer Gil Buenaventura, He is taking full responsibility of the erring bank officials– thus he regained the dignity, reputation and trust in the Philippine Banking system. I highly appreciated and elated him in his reaction on the decision of the Monetary Board on its resolution to fine RCBC with One Billion Pesos.

  4. It is still whitewash. ( Not enough BSP – open the can of worms.)

    We hope the mentioned new investigation will proceed soonest. But any investigation by the senate is suspect as the Senate (example Osmena, etc) is handling the perpetrators with kid’s glove. Prove or show us otherwise. (Show us that even if the crooks that are your campaign financiers, you are still ready to drop them, in the interest of building our nation.)

    Private business, banking, etc is always about making money, and only in the Philippines businesses can operate without regard for rules and pity to the consumers and public they are strangling.

    • The Senate blue ribbon committee is not qualified to investigate bank fraud.
      Appears they like to see their names in the news as they waste everyone’s time and money.

  5. Because of a single employee RCBC is being dragged in the mud and now they have to pay a huge fine. This isn’t fair at all. It’s not like nakinabang sila sa pera,Deguito and casino junket friends were the ones who benefited here they should pay! And what of Deguito? Where is she, is she even in jail? It seems that we are forgetting that she is the one who committed the crime.

    • Honey, Deguito was not a lone wolf, remember that.The former top official who resigned have full knowledge of the operation and also the husband/wife team courrier who cannot explain where the rest of the money went.
      All these members of the chain group know all along what role do they have to play.

    • sorry…but I think that’s a very naive assessment of that whole situation. That money passed through Treasury twice and there were enough safeguards in place to have caught those unusual amounts. There had to be someone higher up the food chain than Deguito to facilitate all those amounts coming in and out over a period of days. There was also an amazing lack of proper attention, caution as well as vigilance. I think the 1BM is a small amount for them to pay….considering the amounts involved. Digit should get it too so being complicit. By the way, the bank made money from those amounts. They wouldn’t emphasize those details but they did.

  6. Good job diving. That 1 billion can be used for many services like education and healthcare for the people

  7. RCBC steals almost 4 billion and they are fined 1 billion.

    Who says crime doesn’t pay.