RCBC Fined P1 Billion
The Bangko Sentral ng Pilipinas (BSP) approved the penalty imposed against Rizal Commercial Banking Corporation (RCBC) on 5 August 2016 after its involvement in the Bangladesh money laudering scam.
The Monetary Board approved the imposition of supervisory enforcement action on RCBC to pay the amount of P1.0 billion, in connection with the special examination conducted by the Bangko Sentral ng Pilipinas relating to the Bangladesh Bank cyber heist.1
In February 2016, the Bangladesh Bank was a target of a cyber-attack to transfer US$951 million to bank accounts around the world. Five bank transfer transactions were granted, US$20 million to Sri Lanka and US$81 million to the Philippines, while thirty more transactions with a total of US$851 million were flagged. The money transferred to the Philippines was deposited in five separate accounts with RCBC which was later determined to be under fictitious identities. The funds were later transferred to a foreign exchange broker for conversion to Philippine pesos, returned to RCBC and consolidated into one account.
The Anti-Money Laundering Council (AMLC) filed on March 15 a money-laundering complaint against RCBC Jupiter-Makati City branch manager Maia Santos-Deguito and others before the justice department. The complaint said, for nine months, Deguito failed to verify the identities of the four respondents who opened bank accounts on 15 May 2015. It also said that Deguito have already known of the stop payment request from Bangladesh Bank and that the funds involved are laundered money, but nevertheless allowed the withdrawal to proceed.
The amount is the biggest fine ever imposed by the BSP as administrative sanction to banks and other supervised financial entities for their failure to comply with banking laws and regulations.
BSP said, “This 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.”1
RCBC, in a statement, accepted the imposed fine and would settle the payment in two equal tranches, the first half will be paid this year and the other half in 2017.
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.” He added, “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.”
The central bank said it, “recognizes RCBC’s efforts in instituting changes to strengthen its Anti-Money Laundering and Counter-Terrorist Financing Risk Management System and governance culture.”
RCBC recorded a net profit of P2.6 billion on the first half of 2016. Its capital base as of June 2016 stood at P59.9 billion.
According to the Asian Journal, Bangladesh Ambassador to the Philippines John Gomes said that President Rodrigo Duterte has given a commitment that the amount stolen would be returned. “We are very hopeful that we will get the total $81 million,” said Ambassador Gomes. “The reason is I got a commitment from the president himself.” Gomes added that Bangladesh’s finance minister might come to the Philippines to meet Duterte to help in the recovering of stolen funds.2
This is the biggest cross-border money laundering case in Philippine history. It also led to the resignation of RCBC’s president and CEO on 6 May 2016 who turned the company in “unprecedented growth”. “Despite having been cleared of any wrongdoing, as President and CEO of RCBC, I take full moral responsibility for this sad incident in the history of the bank,” Tan said in a statement released 6 May 2016. “I am committed to help uncover the truth, not only to clear my name but also to bring justice to the Bangladeshi people,” Tan added. RCBC Treasurer Raul Victor B. Tan also resigned.3 ●