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RCBC suing Bangladesh central bank for defamation.

RIZAL Commercial Banking Corp. announced on Tuesday that it is suing the Bangladesh central bank for allegedly defaming RCBC and its executives with 'baseless allegations' of complicity in the $81-million cyber heist of Bangladesh's central bank in 2016.

In a statement, the bank said the lawsuit was filed with the Regional Trial Court in Makati City on March 6 and was served on Abu Hena Mohammad Razee Hasan, deputy governor and head of Bangladesh Bank Financial Intelligence Unit (BFIU), and the other members of the Bangladesh Bank delegation that arrived in the Philippines this week for meetings with banking officials.

RCBC indicated in the complaint that its reputation has come under the 'vicious and public' attack by Bangladesh Bank since 2016.

'It is public knowledge that Bangladesh Bank has embarked on a massive ploy and scheme to extort money from plaintiff RCBC by resorting to public defamation, harassment and threats geared toward destroying RCBC's good name, reputation and image, all with the intention of getting RCBC to pay Bangladesh Bank money

that RCBC does not have in its custody or possession and which it does not owe to Bangladesh Bank,' RCBC said.

Earlier this year, Bangladesh Bank sued RCBC in the US District Court for the Southern District of New York.

The bank said its defamation suit references Bangladesh's failures to secure its network and disclose those failings on a timely basis. The complaint also refutes Bangladesh Bank's allegation that RCBC played a premeditated role in the cyber theft.

'Bangladesh Bank had lost the $81 million the minute it left defendant Bangladesh Bank's account at the NY Fed and way before it had even reached the Philippines. There is absolutely no act attributable to RCBC that caused the payment instructions to reach the NY Fed and the Correspondent Banks,' the complaint said.

It was in 2016 when a cross-border electronic heist made headlines, as hackers were able to steal $81 million of Bangladesh Bank's funds that were deposited in the Federal Reserve Bank of New York. The stolen money eventually found its way to the Philippines through accounts in RCBC, where much of it was withdrawn and disappeared into the country's casino sector.

In mid-2016, following investigation and processing of the issue, the Bangko Sentral ng Pilipinas sanctioned RCBC with P1 billion in fines-the largest amount ever to be imposed as a fine on a banking institution in the Philippines.

The incident also prompted officials to include the gaming houses in the Anti-Money Laundering Council's coverage. In 2018, President Duterte signed into law Republic Act 10927, effectively designating casinos as covered entities under the Anti-Money Laundering Act of 2001.

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Publication:Business Mirror (Makati City, Philippines)
Geographic Code:9PHIL
Date:Mar 13, 2019
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