Philippines bank challenges Bangladesh Bank to sue over heist

MANILA (Reuters): A Philippines bank that was used as a conduit by cyber criminals to transfer $ 81 million from the Bangladesh central bank’s account at the Federal Reserve Bank of New York on Friday challenged Bangladesh Bank to take it to court.

The unknown hackers tried to steal nearly $ 1 billion from the Bangladesh Bank account between 4 February and 5 February, and succeeded in transferring $ 81 million to four accounts at Rizal Commercial Banking Corp (RCBC) in Manila.

Bangladesh is seeking to recover about $ 18 million that has been frozen in the Philippines, and Bangladesh Bank officials say errors at RCBC enabled the rest to disappear into the casino industry.

But RCBC told Reuters that the “Philippine side has done its part” and that the transfers were made based on authenticated instructions over payments network SWIFT. The hackers used stolen Bangladesh Bank credentials to issue the instructions.

“Going to court instead of the media and various Philippine government agencies is the proper procedure,” RCBC said in a statement. “We will welcome that complaint as RCBC did not keep any of the funds that were released by the NY Fed and sent via three global banks after authentication by SWIFT.”

The statement added that Bangladesh Bank must follow the “correct legal procedures instead of unduly burdening the Philippine government”.

A source close to Bangladesh Bank, who has direct knowledge of the legal position of the central bank, said it would sue RCBC if ongoing efforts to recover the money fail.

A Bangladesh central bank team is currently in Manila to hasten the recovery process but said they were close to getting back only $ 15 million of the total loot.

Bangladesh Bank spokesman Subhankar Saha could not immediately be reached for comment. 

Philippine bank handed record fine for Bangladesh cyber heist

AFP: The Philippines Central Bank on Friday handed a local bank a record $ 21 million dollar fine after it was used by hackers to channel millions of dollars stolen from Bangladesh into local casinos.

In February, unidentified cyber criminals shifted $81 million from the Bangladesh central bank’s account with the US Federal Reserve to a Manila branch of the Rizal Commercial Banking Corp (RCBC), from where it was funnelled into local casinos.

The central bank said in a statement it had approved the record one billion pesos ($ 21 million) fine after a “special examination” of the bank and its role in the audacious cyber heist.

The fine was part of its “supervisory enforcement action on RCBC”, the central bank said in a statement.

The move shows the central bank’s “strong commitment to ensure the stability of the country’s financial system through strong and effective regulation,” it added.

RCBC said separately that it would pay the fine in two instalments over a one-year period.

The brazen cyber heist highlighted how the Philippines’ banking loopholes and anti-money laundering laws have made the impoverished and corruption-weary Southeast Asian nation a dirty money destination.

Philippine law exempts casino transactions from scrutiny by the country’s anti-money laundering council without a case filed in court.

Filipino authorities now say they have tracked down all but $ 21 million of the loot, but have only recovered a fraction of it.

The Philippines’ Anti-Money Laundering Council has filed a suit to gain control of the alleged stolen funds from RCBC, the casinos, and a Manila-based Chinese casino operator.

But the process is expected to take years, with Bangladesh voicing frustration at the slow pace of the return of surrendered funds.

The Bangladesh theft was one of a series of spectacular cyber attacks against banks this year that have heightened fears the industry is becoming an increasingly attractive target for hackers.