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Bangladesh Bank to sue Philippine bank over US$81M cyberheist

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Bangladesh Bank to sue Philippine bank over US$81M cyberheist

Bangladesh Bank plans to file a lawsuit against Manila-based lender Rizal Commercial Banking Corp. in "two to three months" for its involvement in an US$81 million cyberheist in 2016, Reuters reported Feb. 7, citing Abu Hena Mohd. Razee Hassan, deputy governor of the Bangladeshi central bank.

The statement confirms an earlier report that the central bank is planning to sue the Philippine lender over the incident. The deputy governor also confirmed that Bangladesh Bank is in talks with the Federal Reserve Bank in New York and the Society for Worldwide Interbank Financial Telecommunication to join the lawsuit. SWIFT's payment system was used in the theft.

The central bank will file the case in New York and will seek damages for the lender's involvement in the incident, where US$81 million was stolen from the central bank's account with the New York Fed and redirected to an RCBC branch in Manila. The money later disappeared into the country's casino industry.

Meanwhile, RCBC said it was considering suing officials of the Bangladesh Central Bank for allegedly maligning the bank in connection with the cyberheist, The Philippine Daily Inquirer reported, citing a press statement. The bank accused Bangladesh's central bank of using RCBC as a "scapegoat."

In its statement, RCBC alleged that official of Bangladesh's central bank "refuse to release their findings to hide from the Bangladeshi public what could very well be the involvement of its own officials who may have helped loot their money deposited with the New York Federal Reserve."

In May 2017, the Philippine central bank fined RCBC 1 billion pesos for its involvement in the case. For its part, RCBC blamed rogue employees for the lapses in internal controls and filed a money laundering charge against a former manager and four people who owned the bank accounts where the funds were sent. The accounts were under fake names.

So far, only US$15 million has been retrieved from the Philippines.

RCBC said it had disclosed what it legally could to the Philippine Senate and central bank, the report noted. The bank added that it would not pay any compensation to Bangladesh Bank and that the latter should take responsibility for negligence.

A spokeswoman for SWIFT declined to comment on the report.

As of Feb. 7, US$1 was equivalent to 51.19 Philippine pesos.