Manila, Philippines (BBN)-As it continues to come under fire for its alleged link to the $81-million cyber banking heist, Rizal Commercial Banking Corp. (RCBC) said it is willing to return its share of the money to the Bangladesh Bank.
“If we are found liable, yes, I will recommend to the board that we set aside a certain sum of money to give back,” RCBC President (on leave) Lorenzo Tan said during the Senate’s fifth hearing into the heist, reports the CNN.
The money could amount to as much as $46.4 million or P2 billion.
Of the $81 million stolen by hackers from the Bangladesh central bank, about half is said to be recoverable from various sources: businessman Kam Sin Wong, casino operator Solaire Resort and Casino, and remittance firm PhilRem.
Should RCBC shell out P2 billion, it will be a significant chunk of its profits. It booked a net income of P5.1 billion last year, a 15 per cent jump from the P4.4 billion in 2014.
Still, Tan said the bank can take the hit.
“We set aside about P1-2 billion a year for bad loans, bad trades and operation loss.”
Senator Ralph Recto also pointed out that RCBC may benefit as this move could restore its tarnished reputation.
The Yuchengco-led bank maintains that it followed due process when the dirty money was wired to four RCBC accounts last month.
But by the time it received the stop orders from Bangladesh Bank, the money had already been taken out and gambled in casinos.
Nevertheless, RCBC shares have fallen since the issue broke. Share prices hit a 52-week low of P28.75 during the height of the scandal.
Tan notes that the bank’s market capitalization lost “a couple billion pesos” since.
SLAP ON THE WRIST?
RCBC could also be hit by separate penalties by the Bangko Sentral ng Pilipinas (BSP) and the Anti-Money Laundering Council (AMLC) should they be found in violation of regulations.
According to BSP Deputy Governor Nestor Espenilla, Jr., RCBC could face a penalty of up to P500,000 per violation under the Anti-Money Laundering Act (AMLA).
A penalty of P30,000 per day or per transaction could also be levied by the BSP.
On top of that, regulators could also slap the bank with administrative, disciplinary penalties.
Recto contended those penalties might be too light, though, given the scale of the problem.
This is said to be the largest cyber banking heist in history.
“Whether or not RCBC knew where the money came from, if bank protocols were not followed, they have to be given the appropriate penalties,” Recto said during the hearing.
Espenilla agreed, adding that the BSP should even be given the power to push additional penalties against errant banks.
“The economy has grown and the transactions have grown so the flexibility should be there,” he said.
The BSP will submit its recommendations for the proper penalties so the Senate can take it up in its planned amendments to the AMLA and the BSP Charter.
BBN/SK/AD