Philippines slaps $21.3mn fine on Rizal Bank for heist

Bloomberg

The Philippine central bank has slapped a 1 billion-peso ($21.3 million) penalty on Rizal Commercial Banking Corp. for violations of banking rules in connection with the $81 million theft of Bangladesh Bank reserves.
The amount is the largest fine meted out to a lender by the Bangko Sentral ng Pilipinas, it said, without detailing the violations committed by Rizal Bank. “This affirms the BSP’s strong commitment to ensure the stability of the country’s financial system through strong and effective regulation,” the central bank said.
Rizal Bank, in a separate statement, said it plans to pay the amount in two batches of 500 million pesos each, over a one-year period, upon approval by the central bank’s Monetary Board. The lender had already made provisions for the penalty and is strengthening its systems and processes against money laundering, which should boost profitability, President Gil Buenaventura said. Rizal Bank reported profit of 2.61 billion pesos in the first half.
The Philippines, thrown into the spotlight for what is described as one of the largest bank heists in modern history, is seeking a stronger anti-money laundering law that will expand the coverage to casinos as the central bank reviews its regulations. Bangladesh is seeking to recover the reserves that thieves stole after hacking into its account at the U.S. Federal Reserve, routed the funds to accounts at Rizal Bank before most of the money disappeared through at least two casinos in the Philippines.
“It sends a strong signal to the public that the central bank means business, that there is an established system of checks and balances and that things won’t go unpunished, ” said Rens Cruz, an analyst at Regina Capital Development Corp. “Rizal Bank can absorb the fine and will recover from its impact in two years. The stock will probably be volatile for a day or two but investors will soon realize that this is a good thing that sets a clearer direction for the bank.”
Bangladesh Ambassador John Gomes said Rizal Bank must be held accountable for the heist. “Our quest is to recover the $81 million and we hold RCBC responsible,” he told a press briefing Friday after holding meetings this week with key Philippine officials and lawmakers. Bangladesh Bank lawyer Ajmalul Hossain said there may be no need to sue the lender.
President Rodrigo Duterte had committed to help Bangladesh recover the funds, Gomes said. “We are not a very rich country; $81 million is a lot of money for a country like us,” Gomes said, recounting his June 4 appeal to the Philippine leader. Bangladesh is planning to bring to the Philippines in September a high-level delegation which may include its finance minister and central bank governor.
Bangladesh stands to recover at least $15 million out of the $81 million stolen by the end of September, Gomes said. The Philippine gaming regulator froze $2.5 million that Bangladesh is also trying to get back. “We believe we will get the money. I don’t think it’s going to take a long time,” he said.