By Melissa Luz T. Lopez, Reporter

RCBC settles half of P1-B fine over cyber heist

Posted on August 13, 2016

RIZAL Commercial Banking Corp. (RCBC) has paid half of its P1-billion fine on Friday, a week after the Bangko Sentral ng Pilipinas (BSP) slapped a penalty on the listed lender after it was used by cyber criminals to funnel $81 million stolen from Bangladesh last February.

BSP Deputy Governor Nestor A. Espenilla, Jr. confirmed in a text message that the Yuchengco-led bank has settled P500 million as part of its fine over misdeeds that allowed the transfer of stolen funds from the Bangladesh Bank’s account to four RCBC accounts at its branch on Jupiter Street in Makati on Feb. 5.

“That is just an electronic debit on their DD (demand deposit) account with BSP and transferred to BSP instantly,” Mr. Espenilla said via text when asked how the payment was made.

RCBC external lawyer Thea A. Daep said separately that the next payment will be done “one year after,” in keeping with the bank’s earlier commitment to settle the penalty in two equal tranches within a year.

The central bank on Aug. 5 announced the P1-billion fine imposed on RCBC as administrative sanction relating to the cyber heist. The penalty is biggest ever enforced by the BSP on its supervised financial entities for their failure to comply with banking laws and regulations.

RCBC booked P5.1 billion in net income in 2015. In the first half of this year, the bank raked in a P2.61-billion unaudited consolidated net income.

In an earlier statement, RCBC president and chief executive officer Gil A. Buenaventura said the bank is working to improve its protocols to make it the “most prepared” in fending off dirty money deals.

International debt watchers Fitch Ratings and Moody’s Investors Service both expect RCBC to weather the hefty fine, unlikely weakening the bank’s asset buffers and with the lender seen to remain profitable this year.

Moody’s, however, said the penalty stands “credit negative” for the bank, as it will reduce bank income and points out stark weaknesses in internal controls.

Still unidentified hackers tapped the Bangladesh central bank’s account at the New York Federal Reserve in February and caused the transfer of $81 million to four RCBC accounts which have been discovered as fictitious. The money was then withdrawn and transferred to casinos, a portion of which was through cash deliveries by remittance firm PhilRem Service Corp.

The case is the biggest cross-border money laundering case in the country’s history, and has resulted in the resignations of RCBC President Lorenzo V. Tan, treasurer Raul Victor B. Tan, and the dismissal of bank branch manager Maia Santos-Deguito. The BSP also revoked PhilRem’s license as a remittance agent, while tighter rules against non-bank entities are currently being crafted by the regulator.